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Senior Partner
Senior Partner, Solicitor
Category: Law
Satisfied Customers: 13326
Experience:  Solicitor with more than 30 years experience
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Hello, my neighbour has lived in her council house in London

Resolved Question:

Hello,
my neighbour has lived in her council house in London for 45 years she does not want to live there any more is there a way that I can purchase the property with her similar to a joint venture investment?
the property is worth around 1 million pounds.
I understand from internet posts that a council tenant can receive a 30% discount plus a further discount of 1% for every year residing at the property so indeed there would be an excellent overall discount.
The question is whether a contract can be legally binding between myself and my neighbour
and if I can in someway secure any payment I make against the property. Whilst I'm sure the council would not be too happy is there a way a purchase can be legally and securely achieved?
Best regards,
Paul
Submitted: 3 years ago.
Category: Law
Expert:  Senior Partner replied 3 years ago.
Hi Paul.
There is nothing to prevent you providing finance to a council tenant on the basis that you participate in the value of the property or to proven you entering into a legally binding agreement that set sour your agreement . However you have to do this within some constraints.
First - only the tenant can become the legal owner of the property on the e purchase
Secondly if the property is transferred within 5 years some of the discount is repayable
Finally you should also be aware that the discount is capped at £102,000 in London so you would not get a 30% discount on a £1m property.
You could not raise a mortgage yourself to do this acquisition because you could not be on the legal title.
If you have access to finance however you could for example take a charge as security and also enter into a binding option ot purchase at the discount price in the future.
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