Shared Equity and Shared Ownership Guide (England and Wales, Northern Ireland and Scotland)

November 2010 Edition

Introduction

This guide constitutes our instructions in relation to shared ownership and shared equity schemes in the United Kingdom. These instructions should be read in conjunction with part 1 and part 2 of the CML handbook, available at www.cml.org.uk. And, for the avoidance of doubt, these instructions do not affect any responsibilities you have to us under the general law or any practice rule, the Solicitors’ Code of Conduct 2007 or any guidance issued by your professional body from time to time. You will also have received a copy of our mortgage offer which may detail any additional specific instructions we may have. If the offer you have been provided with includes an offer for a Mortgage Reserve, or is for an interest only loan, please refer this case to us immediately as we will need to reissue the offer. References to "we", "us" and "our" means Barclays Bank PLC, of which “Woolwich” is a trademark.  The “Property” is the Property as defined in our mortgage offer.  Please note that we have different requirements in different jurisdictions, as detailed below.  General 

We do not require that you provide the scheme documentation to us for approval. Please do not send us any documentation unless we specifically request it from you. Your obligations under the Solicitors’ Code of Conduct 2007 (and equivalent provisions in Scotland and Northern Ireland) require that you review this documentation in line with our instructions below. Provided you are satisfied that it meets the required criteria, or you are satisfied that where it does not meet this criteria there is no additional risk to the bank, we will generally be happy to proceed on this basis. Please read the below sections for our instruction in relation to each of the various scheme types in each jurisdiction. England & Wales

If the offer you have been provided with includes an offer for a Mortgage Reserve, or is for an interest only loan, please refer this case to us immediately as we will need to reissue the offer. Shared Equity Where you act for Barclays in a conveyancing transaction in which there is an element of shared equity you must ensure the following requirements are fulfilled. A shared Equity arrangement will be acceptable provided that you are satisfied of the following:

Barclays’ charge must rank in priority to the charge securing the shared equity advance; There must not be anything contained in the second charge document that would prevent Barclays from exercising any of

its powers under the mortgage terms and conditions; Insurance proceeds paid in respect of the property must not be required to be paid to the second charge holder in

satisfaction of the shared equity advance; and Any restriction to be registered on title in respect of the property must not effect Barclays’ ability to take possession of

the property in the event that is required under the mortgage terms and conditions. Provided you are satisfied of the above there is no requirement to provide the second charge documentation to Barclays. Shared Ownership Where you act for Barclays in a shared ownership conveyancing transaction we require that the shared ownership lease is in the standard form provided by the Homes and Communities Agency (formerly the Housing Corporation). This standard form document is

available at http://cfg.homesandcommunities.co.uk/model-leases-for-housing-association-use-from-april-2010.htm In addition to all of the above we will require that you are satisfied that there is nothing in the shared ownership lease that would;

prevent Barclays from exercising its power under the mortgage terms and conditions; or diminish the resale value of the property.

Provided that the shared ownership lease is in the standard form, and you are satisfied in relation to the above, it will be acceptable to Barclays and there is no requirement for you to provide this document to us. Prior to completion you are required to obtain the written consent of the Landlord to our mortgage terms and conditions. Failure to do so will render the Mortgagee Protection Clause invalid. You are further required to obtain an undertaking from Landlord in the form provided by the Homes and Community Agency..This standard form document is available at http://www.homesandcommunities.co.uk/national_affordable_housing_programme. Click on the "Shared Ownership: Joint Guidance" link and it can be found at the end of this.. You must obtain the consent and undertaking prior to completion. These documents must be returned to Barclays with the deeds. If the shared ownership lease is not in the standard form, but is substantially the same, we may still be able to proceed. In order to do so you must advise us;

that the document is not in the standard form; in what way the document differs from the standard form; for what reason the document differs from the standard form; and whether you believe there is any risk to our security should we consent to the non standard document.

Not withstanding the above the Mortgagee Protection Clause must be the form of the Homes and Communities Agency standard. Alterations to this clause will not be acceptable. Scotland If the offer you have been provided with includes an offer for a Mortgage Reserve, or is for an interest only loan, please refer this case to us immediately as we will need to reissue the offer. Shared Equity Where the shared equity provider is a Registered Social Landlord we require that the ranking agreement is in the form of the Scottish Ministers standard. This standard document is available at http://www.scotland.gov.uk/Home. Where the shared equity provider is not a Registered Social Landlord we require that the ranking agreement is in substantially the same form as the Scottish Ministers standard. This standard document is available at http://www.scotland.gov.uk/Home. Provided that the ranking agreement is in this form it will be acceptable to Barclays, and there is no requirement for you to provide this document to us. In addition to all of the above we will require that you are satisfied of the following:

Barclays’ charge must rank in priority to the charge securing the shared equity advance; There must not be anything contained in the ranking agreement that would prevent Barclays from exercising any of its

powers under the mortgage terms and conditions; Insurance proceeds paid in respect of the property must not be required to be paid to the home stake owner in

satisfaction of the shared equity advance; and

Any restriction to be registered on title in respect of the property must not effect Barclays’ ability to take possession of the property in the event that is required under the mortgage terms and conditions.

If the ranking agreement is not in the prescribed form, but is substantially the same, we may still be able to proceed. In order to do so you must advise us;

that the document is not in the standard form; in what way the document differs from the standard form; for what reason the document differs from the standard form; and whether you believe there is any risk to our security should we consent to the non standard document.

Shared Ownership For shared ownership arrangements in Scotland we require that the landlord is a Registered Social Landlord. If the landlord is not a registered social landlord we will not be able to proceed. We further require that the shared ownership co-operation agreement is in the same form as at Annexure A. The occupancy agreement between the landlord and the borrower should be in the same form as the example document at Annexure B. In addition to all of the above we will require that you are satisfied that there is nothing in the co-operation agreement or occupancy agreement that would;

prevent Barclays from exercising its power under the mortgage terms and conditions; or diminish the resale value of the property.

Provided that the co-operation agreement and occupancy agreement are in the required forms, and you are satisfied in relation to the above, the scheme will be acceptable to Barclays, and there is no requirement for you to provide this document to us. If the co-operation agreement or occupancy agreement are not in the standard form, but are substantially the same, we may still be able to proceed. In order to do so you must advise us;

that the documents are not in the standard form; in what way the documents differ from the standard forms; for what reason the documents differ from the standard forms; and whether you believe there is any risk to our security should we consent to the non standard documents.

Northern Ireland If the offer you have been provided with includes an offer for a Mortgage Reserve, or is for an interest only loan, please refer this case to us immediately as we will need to reissue the offer. Shared Ownership There are two documents we require you to review in a shared ownership arrangement:

master mortgage agreement; and sub lease.

Our requirements for each of the documents are below. Master Mortgage Agreement Where a property in Northern Ireland is being purchased under a shared ownership arrangement we require that the master mortgage agreement is in the same form as the Co-Ownership Housing Northern Ireland standard Master Mortgage Agreement.

It is a requirement of this standard Master Mortgage Agreement that the bank advise the scheme provider with formal notice in writing of the borrowers mortgage account number and an address for service of all notices under the agreement. Please ensure that you notify the scheme provider on the bank’s behalf. The address that is to be provided to the scheme provider is: UKRB Legal Level 24, One Churchill Place London, E14 5HP This notice must be served on the scheme provider within 28 days of completion. It is your responsibility to ensure that this notice is served correctly. Provided that the master mortgage agreement is in this form it will be acceptable to Barclays. In addition to all of the above we will require that you are satisfied that there is nothing in the master mortgage agreement that would;

prevent Barclays from exercising its power under the mortgage terms and conditions; or diminish the resale value of the property.

If the master mortgage agreement is not in the standard form, but is substantially the same, we may still be able to proceed. In order to do so you must advise us;

that the document is not in the standard form; in what way the document differs from the standard form; for what reason the document differs from the standard form; and whether you believe there is any risk to our security should we consent to the non standard document.

Sub Lease We require that the sub lease is in substantially the same form as the Co-Ownership Housing Northern Ireland standard Sub Lease. You are also required to obtain the written consent of the Landlord to our mortgage terms and conditions. Failure to do so will render the Mortgagee Protection Clause invalid. You must be obtain this consent prior to completion and provide it to Barclay’s with the deeds. Provided that the sub lease is in this form it will be acceptable to Barclays, and there is no requirement for you to provide this document to us. In addition to all of the above we will require that you are satisfied that there is nothing in the sub lease that would;

prevent Barclays from exercising its power under the mortgage terms and conditions; or diminish the resale value of the property.

If the sub lease is not in the standard form, but is substantially the same, we may still be able to proceed. In order to do so you must advise us;

that the document is not in the standard form; in what way the document differs from the standard form; for what reason the document differs from the standard form; and whether you believe there is any risk to our security should we consent to the non standard document.

Annexure A – Co-operation Agreement Scotland

SHARED OWNERSHIP CO-OPERATION AGREEMENT

between

[insert name]

and

BARCLAYS BANK plc (lender)

SHARED OWNERSHIP CO-OPERATION AGREEMENT between [insert company name], registered under the Industrial & Provident Societies Act 1965 (Registered Number XXX), being registered with Communities Scotland under the Housing (Scotland) Act 2001 (Registered Number XXX), being a registered Scottish Charity (Charity Number XXX) and having its Registered Office at [insert address] (hereinafter referred to as “the Association”) And Barclays Bank PLC, having their place of business at [insert address] WHEREAS

(A) the association has constructed/is acquiring dwelling houses, continues to do so and will from time to time in the future

construct/acquire further dwelling houses for use in their programme of Shared Ownership (said dwelling houses and

said programme being hereinafter respectively referred to as “the Subjects” and “the Scheme”);

(B) In the terms of the Scheme the Association will sell pro indiviso shares in the dwelling houses comprised in the Subjects

to persons participating in the Scheme (such pro indiviso shares and the persons participating in the Scheme being

hereinafter respectively referred to as “the Sharing Owner’s Share” and “the Sharing Owner”) and the Sharing Owner

will occupy that part of the dwelling house not comprised within the Sharing Owner’s Share under a Minute of Agreement

in a form previously notified to and approved by the Lender and entered into between the Sharing Owner and the

Association (hereinafter referred to as “the Exclusive Occupancy Agreement”);

(C) The Lender intends to make advances to the Sharing Owner to assist the purchase of such pro indiviso shares and such

advances will be secured in each case by a Standard Security to be granted by the Sharing Owner over the Sharing

Owner’s Share (each such Standard Securities being hereinafter referred to as “a Standard Security”); and

(D) It is expedient that the Association and the Lender regulate their respective interest in those dwelling houses comprised

in the Subjects in respect of which the Society is to obtain a Standard Security.

NOW THEREFORE the parties hereto have agreed and do hereby agree as follows:

(One) (a) The Exclusive Occupancy Agreement shall provide that any failure by the Sharing Owner to perform or observe any of

the terms conditions or provisions to be performed or observed by the Sharing Owner in terms of a Standard Security

shall entitle the Association to exercise its rights under the Exclusive Occupancy Agreement.

(b) The Lender shall be entitled at any time to call up a Standard Security in the manner prescribed by Section 19 of the

Conveyancing and Feudal Reform (Scotland) Act 1970.

(c) It shall be a condition of any advance made by the Lender to a Sharing Owner that it be granted a Standard Security

over the entire Sharing Owner’s Share of the dwelling house comprised in the Subjects over which the Lender is to

obtain security from the Sharing Owner (hereinafter referred to as the “relevant dwelling house”).

(d) Where the lender holds a Standard Security and the Association in terms of the Exclusive Occupancy Agreement has

agreed to sell and additional pro indiviso share in the relevant dwelling house to the Sharing Owner the Association

shall so advise the Lender in writing not less than 21 days prior to settlement of said sale.

(Two) The Association and the Lender hereby undertake to collaborate in the exercise of the powers available to them in terms

of the Exclusive Occupancy Agreement and a Standard Security respectively with a view to safeguarding their respective

interests and in particular but without prejudice to the foregoing generality:

(a) The Lender undertakes that if the Sharing Owner is in default of the Standard Security then it shall forthwith advise

the Association of said default;

(b) The Association undertakes that if the Sharing Owner is in default of his obligations to the Lender in terms of a

Standard Security, it shall forthwith exercise its rights under the Exclusive Occupancy Agreement with a view to

joining with the Lender in a sale of the relevant dwelling house; and

(c) The Lender undertakes, in the event that the Association issues a notice to terminate the Occupancy in terms of the

Exclusive Occupancy Agreement, to exercise its rights under its Standard Security (including calling-up) forthwith

with a view to joining with the Association in a sale of the relevant dwelling house.

(Three) Neither party shall consent to the Sharing Owner granting any further Standard Security over the Sharing Owner’s Share

(other than to the Lender) without first obtaining the written approval of the other party.

(Four) The Interest of the Lender shall be endorsed on the Policy of Insurance to be maintained by the Association in terms of the

Exclusive Occupancy Agreement and the Association shall provide such evidence of the amount (which shall be not less

than the extent of reinstatement value) and the nature of cover and the payment of premiums as may be require by the

Lender to comply with the Lender’s Conditions of Loan.

(Five) The Parties consent to registration hereof for preservation: IN WITNESS WHEREOF

Annexure B – Occupancy Agreement Scotland

SHARED OWNERSHIP OCCUPANCY AGREEMENT 

 between 

                            registered  under  the  Industrial and  Provident  Societies  Act  1965  and  a registered  social  landlord  under  the  Housing (Scotland) Act  2001  and having  its Registered Office at   (hereinafter  referred  to as "the Association") OF THE FIRST PART  

and  

 (hereinafter  referred  to  as  "the  Sharing Owner") OF THE SECOND PART 

      

WHEREAS  (A)  The Association  is a Housing Association within the meaning of Section 1 of the Housing Associations Act 1985 ("the 1985 Act")  ,  is a Society registered under the  Industrial and Provident Societies Acts and is registered with Scottish Homes under Section 5 of the 1985 Act and Section 4 (1) of the Housing (Scotland) Act 1988 as amended in the Register maintained under Section 3 (1) of the 1985 Act;  (B)  The Sharing Owner has entered into missives relative to the purchase of a [                   ] percent share pro indiviso in and to the subjects known as [                                        ] all as more particularly described in clause ONE hereof;  (C)  The  Association  and  the  Sharing  Owner  require  to  enter  into  a  formal  agreement regarding their joint ownership  of the said subjects;  NOW THEREFORE THE PARTIES HERETO HAVE AGREED AND DO HEREBY AGREE AS FOLLOWS:‐  ONE    INTERPRETATION  (a)    In  this Agreement where  the context  so admits  the  following expressions  shall have the following meanings:‐  "the Property" means the entire subjects known as [                                               ] being the subjects registered in the Land Register of Scotland under Title Number [                        ];  "the Association's Share" means the pro indiviso share in the Property from time to time within the ownership of the Association;  "the Sharing Owner's Share" means the pro indiviso share in the Property from time to time within the ownership of the Sharing Owner;  "the Schedule" means the Schedule annexed and executed as relative hereto;  "the Date of Entry" means    "the Tenancy" means the tenancy created by clause TWO hereof;  "the Period of the Tenancy" means the period of the Tenancy referred to in Clause TWO (a) hereof;  "the Specified Rent" is defined in Part II of the Schedule;  "the Service Charge" means the amount payable by the Sharing Owner to the Association to meet the  costs  incurred  by  the  Association  in  terms  of  Clause  SIX  (b)  hereof  and  the  Association's reasonable administrative expenses in connection therewith;  "the Services" are defined in Part III of the Schedule;  "the Prescribed Rate" means the rate of three per centum per annum above the base lending rate from time to time of the Bank of Scotland;  "these presents" means this Agreement and the Schedule;  (b)  (i)  words  importing  the  singular number  include  the plural number and vice versa and words importing gender include any other gender;  

(ii)  obligations made or assumed by any  individual shall be binding and enforceable against his executors and personal representatives;  (iii)  where  the  expression  "the  Sharing  Owner"  shall  include more  than  one  person  (a)  all obligations on the part of the Sharing Owner herein contained shall be binding jointly and severally on them and their respective executors and representatives whomsoever without the necessity of discussing  them  in  their order and  (b) on  the death of one of  them  the survivor or survivors will succeed to the Tenancy.  TWO    TENANCY  (a)    Duration  The Association and the Sharing Owner in consideration of the Specified Rent and other prestations hereinafter  specified HEREBY  LET  the Property  to  the Sharing Owner  and  that  for  the period of twenty years from the Date of Entry.  (b)    Rent  The  Sharing  Owner  HEREBY  BINDS  AND  OBLIGES  HIMSELF  to  pay  the  Specified  Rent  to  the Association monthly  in advance by equal  instalments on  the  first day of each  calendar month  in each  year  ("the  payment  dates") without  any  deduction whatsoever with  the  first  payment  of Specified Rent on the Date of Entry being a proportionate payment for the period from the Date of Entry until the next payment date and the next payment on the first payment date occurring after the Date of Entry and so forth monthly, termly and continuously thereafter throughout the Period of the Tenancy with interest on each instalment of Specified Rent or on any sums of money payable by  the Sharing Owner pursuant  to any of  the obligations of  the Sharing Owner  in  terms of  these presents at  the Prescribed Rate calculated  from  the date when  the same shall have become due until payment.  (c)    Rent Review  The Specified Rent payable in terms of the preceding sub‐clause will be subject to annual review in accordance with the provisions of Part II of the Schedule.  (d)    Default  If the Specified Rent or any part thereof shall at any time be  in arrears and unpaid for a period of twenty  one  days  after  the  same  shall  have  become  due  (whether  any  formal  or  legal  demand therefor shall have been made or not) or  if the Sharing Owner shall at any time fail or neglect to perform or observe any of the terms, conditions or provisions contained  in these presents on the part of the Sharing Owner to be performed or observed or if the Sharing Owner shall at any time fail or neglect  to perform or observe any of  the  terms,  conditions or provisions  to be performed or observed by  the Sharing Owner  in  terms of  any  standard  security  that may be  created over  the Property or the Sharing Owner's Share or if the Sharing Owner shall become apparently insolvent or enter into any arrangement or composition for the benefit of his creditors or permit any diligence to be executed on his goods  then and  in any  such case  the Association will be entitled at any  time thereafter but on not less than 28 days prior notice to terminate the Tenancy whereupon all rights of the Sharing Owner to exclusive occupation of the Property shall cease forthwith and the Sharing 

Owner shall remove from the Property on the date specified by the Association  in the said notice but without prejudice to any right of action or remedy of the Association in respect of any previous breach of any of  the undertakings by  the Sharing Owner contained  in  these presents, and  in  the event of failure to remove by the said specified date the Sharing Owner will in addition be liable to pay by way of penalty to the Association a sum equivalent to the Specified Rent which was payable immediately prior to the termination of the Tenancy for each day or part day after such specified date that he remains in occupation of the Property.    (e)    Termination by Default  Upon  termination of  the Tenancy by default under  the preceding sub‐clause,  the Association will have the option either to:  (i)  purchase the Sharing Owner's Share of the Property; or  (ii)  require the Sharing Owner to conjoin with the Association in the joint sale of the Property with vacant possession on the open market for the best price than can reasonably be obtained.  The Association will  require  to  intimate  to  the  Sharing Owner which of  the  foregoing options  it intends to exercise by serving notice on the Sharing Owner within a period of 42 days from the date of termination of the Tenancy and, failing service of such notice, will be deemed to have exercised option (ii).   In either case, the provisions regarding the sale of the Property and the application of the sale proceeds described in Clause  FOUR (b) hereof will apply.  (f)    Prohibition against Recording/Registration  The Sharing Owner hereby undertakes to the Association that he shall not  record these presents in the General Register of Sasines nor  register  them  in  the Land Register and hereby acknowledges that a breach of this undertaking shall ipso facto render the Tenancy no longer valid or binding in a question with the Association.  THREE  STAIRCASING  At any  time after  the  first anniversary of  the Date of Entry during  the Period of  the Tenancy  the Sharing Owner will  (subject  as  aftermentioned)  be  entitled  to  purchase  further  tranches  of  the Association's Share from the Association PROVIDED ALWAYS that:‐  (a)    each such further tranche shall represent either (i) a one quarter or one half share pro indiviso in the Property or (ii) the Association's Share;  (b)    the provisions of Part I of the Schedule shall apply to the purchase by the Sharing Owner of each such further tranche;  (c)    the Sharing Owner shall only be entitled to exercise his right to purchase further tranches  in  terms  of  this  clause  if  he  shall  have  paid  all  Specified  Rent  and  other  sums  due hereunder and otherwise complied with, performed and discharged all the obligations  incumbent upon him in terms of these presents;  and 

 (d)    the Sharing Owner shall not be entitled  to exercise his  right  to purchase  further tranches in terms of this clause more than once in each period of twelve months.    FOUR    SHARING OWNER'S COVENANTS  (a)    Use  The Sharing Owner will use the Property as his sole or main dwellinghouse only and  for no other purpose and will not:‐  (i)  without the consent in writing of the Association (which consent shall not unreasonably be withheld  or  delayed)  assign  his  interest  under  these  presents  and/or  grant  conveyances  of  or securities over his interest in the Property, and  (ii)  without the consent in writing of the Association sublet the Property in whole or in part or otherwise grant any rights of occupancy in it.  (b)    Voluntary Removal  (i)  The Sharing Owner shall,  in the event that he wishes to remove from the Property, serve notice on the Association giving the Association the option at  its discretion either to purchase the Sharing  Owner's  Share  or  to  join  with  the  Sharing  Owner  in  a  sale  of  the  Property  and  the Association, if it wishes to purchase the Sharing Owner's Share, shall within twenty eight days after service  by  the  Sharing Owner  of  the  said  notice  serve  on  the  Sharing Owner  a  counter  notice confirming its intention to purchase.  If the Association fails to serve such counter notice within the said  twenty eight days  the Association  shall be deemed  to have agreed  to  join with  the Sharing Owner in a sale of the property.  (ii)  in the event that the Association serves the said counter notice as aforesaid the following provisions shall apply:‐  (primo)    in  this  sub‐clause  (b)  (ii)  the  expression  "Portioned Percentage"  shall mean  the Sharing Owner's  Share  expressed  as  a percentage of  the property  and  the  expressions  "Market Value"  and  "the  Valuer"  shall  have  the meanings  respectively  ascribed  thereto  in  Part  I  of  the Schedule save  that  the assumptions  (iv) and  (v)  in paragraph  1 of Part  I of  the Schedule shall be disregarded when determining the Market Value for the purposes of this sub‐clause (b)(ii);  (secundo)  the Association shall, within seven days of serving the said counter notice, instruct the Valuer to determine the Market Value as at the date of service of the said counter notice and shall  notify  the  Sharing Owner  of  the  amount  thereof  in writing within  seven  days  of  the  said determination by the Valuer (declaring always that the Valuer shall be deemed to be acting as an expert and not as an arbiter and his decision as to the Market Value shall be final and binding on the parties hereto);  

(tertio)    the Association shall settle the purchase of the Sharing Owner's Share within eight weeks of the said determination by the Valuer (under declaration that time shall be of the essence) and the cost of such determination shall be paid by the Association;  (quarto) the purchase price payable  for  the Sharing Owner's Share  shall be  the  sum equal  to  the Portioned Percentage of the Market Value as determined as aforesaid and in exchange for payment of the said purchase price the Sharing Owner shall give the Association entry to the Property with vacant possession and shall deliver to the Association a  validly executed Disposition of the Sharing Owner's Share  in  favour of  the Association or  its nominee and shall exhibit or deliver such  titles, searches,  reports and/or Land Certificates as shall be appropriate having  regard  to Part  IV of  the Schedule;  and   (quinto)   the Tenancy shall terminate upon settlement of the purchase by the Association of the Sharing Owner's Share.  (iii)  in the event that the Association does not serve the said counter notice as aforesaid the parties shall jointly sell the Property with vacant possession on the open market by private bargain for the best price that can be reasonably obtained and shall participate in the free proceeds of sale in accordance with their respective interests as joint owners in the Property provided always that in a division of  the sale proceeds due  regard shall be had  to  the effect on  the sale price of  (a) any improvements made  to  the  Property  by  the  Sharing Owner  otherwise  than  in  pursuance  of  an obligation incumbent upon him in terms of these presents and (b) any failure of the Sharing Owner to comply with and perform the obligations incumbent upon him in terms of these presents.   FIVE    SHARING OWNER'S OBLIGATIONS  (a)    Maintenance  The Sharing Owner accepts the Property as being in good and tenantable condition and repair and will be solely liable for the cost of keeping it in good tenantable condition and repair.  The Sharing Owner also undertakes  to comply with  the provisions specified  in  the  title deeds  to  the Property and agrees  that  the Association may assume  those  regarding  insurance and  those undertaken by the Association  in terms of Clause SIX (b) hereof.   The Sharing Owner also undertakes to pay the Service  Charge  at  such  times  and  in  such manner  as  the  Association may  at  its  sole  discretion determine from time to time.  (b)    Insurance  The  Association will  at  all  times  during  the  Period  of  the  Tenancy  insure  and  keep  insured  the Property  for  the  full  reinstatement  value  thereof  under  a  comprehensive  policy  and  will  if reasonably required produce to the Sharing Owner a certificate from the  insurers stating for what sum the Property is insured.  (c)    The Sharing Owner will pay and so free and relieve the Association of all premiums necessary  for keeping  in  force  the  insurance specified  in sub‐clause  (b) hereof and will not do or cause, permit or suffer to be done on or bring or cause, permit or suffer to be brought on to the Property any act, matter or thing which may cause the insurance of the Property or any part thereof to become void or voidable. 

 (d)  The Sharing Owner will:‐  (i)  Owner Occupier Obligations  Observe any condition and perform any obligation in respect of the Property lawfully binding on the owner or occupier of the Property whether imposed by virtue of any enactment or otherwise;  (ii)  Ground Burdens, etc.  Make due and punctual payment of all ground burdens, Council Tax and other public burdens and all other payments exigible in respect of the Property;   (iii)  Common Charges  Without prejudice to Clauses 5 (d) (i) and 5 (d) (ii) hereof make payment on demand to or to the relief of the Association of all sums due  in respect of the Property  in terms of Deed of Conditions affecting the Property.  (iv)  Planning  In connection with any matter arising under the Town and Country Planning (Scotland)  legislation (hereinafter referred to as the "Planning Acts"):‐  (1)  notify the Association of any notice or order  issued under the Planning Acts which affects or is likely to affect the Property within fourteen days of receipt of such notice by sending a copy of the notice or the order to the Association;  (2)  take, as soon as practicable, all reasonable or necessary steps to comply with such a notice or order or, as the case may be, timeously object thereto; and   (3)  if so directed by the Association object, or join with the Association in objecting to any such notice or order or in making representations against any proposal therefor.  SIX    THE ASSOCIATION'S OBLIGATIONS  The Association undertakes  (a)  that  in  consideration of  the Sharing Owner  complying with his obligations hereunder he may peaceably and quietly hold and enjoy the Property during the Period of the Tenancy without any interruption by the Association so far as this is reasonably possible   and  (b)  to carry out the Services more particularly described in Part III of the Schedule.  SEVEN  MAINTENANCE  

(a)  In the event of the Sharing Owner failing to maintain or repair the Property in accordance with  the  provisions  of  Clause  FIVE  hereof,  the  Association  may  carry  out  such  repairs  or maintenance and  recover  from  the Sharing Owner  the costs  incurred by  it  in so doing,  (including administrative costs).  (b)  The Association will be entitled to enter the Property during reasonable hours on giving not less than three days notice to the Sharing Owner (except in case of emergency) for the purpose of inspecting its condition and, if necessary, carrying out repairs or maintenance work.  (c)  Unless such repairs or maintenance as may be found to be necessary are urgently required, (in which case the Association may carry out the work  immediately or as soon as practicable) the Association may serve a notice on  the Sharing Owner  requiring him  to carry out  the work within thirty days thereafter, failing compliance with which the Association may carry out such work and recover the cost as provided for in sub‐clause (a) hereof.  EIGHT  ALTERATIONS  The  Sharing  Owner will  not make  any  alteration  or  improvement  to  the  Property without  first obtaining  approval  in  writing  from  the  Association  (which  approval  will  not  be  unreasonably withheld  or  delayed).    Failure  to  comply  with  this  provision  will  entitle  the  Association  at  its discretion  to  require  the  Sharing  Owner  to  effect  reinstatement  of  the  Property  to  its  original condition at the sole expense of the Sharing Owner, failing which the Association will be entitled to effect  such  reinstatement  and  to  hold  the  Sharing Owner  liable  for  the  costs  thereof,  including administrative costs.    NINE    OPTION TO PURCHASE ASSOCIATION'S SHARE ON EXPIRY  (i)  The Sharing Owner will have the right to purchase the Association's Share forthwith upon expiry  of  the  Twentieth  year  of  the  Tenancy  provided  that  the  Sharing  Owner  notifies  the Association in writing to this effect at least three months prior to said expiry.  (ii)  The provisions of Part I of the Schedule (other than paragraph 2 (2) thereof) shall apply to such a purchase under declaration that:‐  (1)  at the expiry of the Twentieth year of the Tenancy the Sharing Owner will be deemed to have served on the Association the Notice referred to in paragraph 2(1) of Part I of the Schedule;  (2)  the Sharing Owner shall settle the purchase of the Association's Share within eight weeks of receiving notification of the Market Value (under declaration that time shall be of the essence);  (3)  the Sharing Owner shall pay interest on the purchase price to the Association:‐  (primo)    at the Prescribed Rate from the date of termination of the Tenancy until the expiry of the eight week period referred to in sub‐clause (ii) (2) hereof; and  (secundo)  at the rate of five per centum per annum above the then current base lending rate of the Bank of Scotland from the expiry of the said eight week period until payment.  TEN    OPTION TO PURCHASE SHARING OWNER'S SHARE ON EXPIRY 

 (i)  If  the  Sharing Owner  does not  exercise his  right  to purchase  the Association's  Share  in terms of Clause NINE,  the Association will upon  the expiry of  the Twentieth year of  the Tenancy have the right to purchase the Sharing Owner's Share PROVIDED that notice to this effect is served by the Association upon the Sharing Owner within two months prior to the date of said expiry.  (ii)  The provisions of Clause FOUR  (b)  (ii) shall apply  to such purchase subject  to  the notice served in terms of the preceding sub‐clause being deemed to be counter notice in terms of Clause FOUR (b)  (i).  ELEVEN SALE OF PROPERTY ON EXPIRY  If neither the Sharing Owner nor the Association exercise their respective rights in terms of Clauses NINE and TEN   hereof the parties shall  jointly sell the Property and the provisions of Clause FOUR (b)(iii) shall apply .  TWELVE ASSIGNATION BY ASSOCIATION  The Association  shall not  assign  its  rights under  these presents  and/or  convey  its  interest  in  the Property to persons other than a housing association (within the meaning of Section 1 of the 1985 Act) duly registered with Scottish Homes.  THIRTEEN  ARBITRATION  Any dispute or difference between the parties as to the  interpretation of this Agreement or as to the fulfilment or otherwise        by either party of their respective obligations hereunder or as to any matters connected therewith (other  than as  to  the valuation of  the property or  the exercise by  the Association of  its  rights  in terms of clauses TWO and NINE hereof) shall, failing agreement be determined by an Arbiter to be nominated failing agreement by the President for the time being of The Law Society of Scotland on the  application of  either party  and  the  awards of  such Arbiter  shall be  final  and binding on  the parties.  FOURTEEN  NOTICES  Any notice required to be given by any party hereto shall be in writing.   Any notice to the Sharing Owner  shall  be  sufficiently  served  if  delivered  by  hand  to  the  Property  or  if  sent  by  first  class recorded delivery addressed to the Sharing Owner at the Property.   Any notice to the Association shall be sufficiently served  if delivered by hand to the Association's Registered Office or  if sent by first  class  recorded delivery  addressed  to  the Association  at  its Registered Office.      The date of service of any notice will be deemed to be the date of delivery if the notice is delivered by hand or two working  days  after  the  date  of  posting  if  the  notice  is  served  by  post  and  in  proving  such service it shall be sufficient to prove that the notice was properly addressed and posted. 

 FIFTEEN These presents shall remain in full force and effect until the Sharing Owner has purchased the Association's Share, the Association has purchased the Sharing Owner's Share or the Property has been sold by the parties whether pursuant to the terms of clauses TWO (e), FOUR (b), NINE, TEN or ELEVEN hereof or otherwise.  SIXTEEN REGISTRATION  The parties  hereto  consent  to  registration  hereof  and of  all memoranda by or on behalf of  the parties hereto for preservation and execution:  These presents typewritten on this and the preceding eleven pages are, together with the Schedule annexed, executed as follows:‐   SEALED with the Common Seal of the Association at on the                  day of 2008 in the presence of:‐   ............................................Witness  ............................................Full Name  ............................................Address                                                                                                                                   SIGNED by the said Sharing Owner at on the                   day of                 2008 in the presence of this witness:    ............................................Witness  ............................................Full Name  ............................................Address 

THIS  IS  THE  SCHEDULE  REFERRED  TO  IN  THE  FOREGOING  SHARED  OWNERSHIP  OCCUPANCY AGREEMENT BETWEEN                 HOUSING ASSOCIATION LIMITED AND [                                 ] IN RESPECT OF    PART I  PURCHASE OF ADDITIONAL TRANCHES (STAIRCASING PROVISIONS)   1.  In this Part of the Schedule the following expressions shall have the following meanings:‐  "Market Value" means at the date hereof [                       ] and at any subsequent date means the then open market value of the Property upon the following assumptions:‐  (i)  that the Tenancy had not been granted;  (ii)  that vacant possession of the Property is available;  (iii)  that neither the Sharing Owner nor a member of his family residing with him wishes or has any right to purchase the Property;  (iv)  that  the  Sharing  Owner  has  duly  complied  with,  performed  and  discharged  all  the obligations incumbent upon him in terms of these presents;   and  (v)  that any  improvements made  to  the Property by  the Sharing Owner at his expense and otherwise than in pursuance of an obligation incumbent upon him in terms of these presents shall be ignored and any value attributable thereto disregarded.  "the  Initial  Percentage"  means  the  Sharing  Owner's  Share  as  at  the  date  of  these  presents expressed as a percentage of the Property.  "a relevant Tranche" means at any relevant time such tranche as is referred to in clause THREE (a) of these presents as the Sharing Owner elects to purchase pursuant to paragraph 2(2) hereof.  "the Proportioned Percentage" means at any  relevant  time such portion of  the Property being a relevant Tranche expressed as a percentage of the Property.  "the Valuer" means either (a) the District Valuer of the Inland Revenue for the district in which the Property is situated or such other professionally qualified valuer as the Association and the Sharing Owner may agree or (b) such other person approved of in writing by Scottish Homes.  2.  (1)  The Sharing Owner shall serve on the Association a notice in writing requiring the Association to instruct the Valuer to determine the Market Value as at the date of service of the said notice and the Association shall notify the Sharing Owner of the amount thereof  in writing within seven days of the said determination by the Valuer.  

(2)  Provided settlement is effected within three months of such notification by the Association the  Sharing  Owner  may  purchase  a  relevant  Tranche  subject  to  and  in  accordance  with  the provisions of Paragraph 3 hereof.  (3)  The costs of any such determination by the Valuer shall be paid on demand by the Sharing Owner to the Association.  (4)  The Valuer shall be deemed to be acting as an expert and not as an arbiter and his decision as to the Market Value shall be final and binding on the parties hereto.  3.  The purchase price payable for the relevant Tranche shall be a sum equal to the Portioned Percentage  of  the Market  Value  as  determined  as  aforesaid  by  the  Valuer  and  in  exchange  for payment  of  said  purchase  price  and  any  other  sum  due  in  terms  of  Paragraph  5  hereof  the Association shall deliver to the Sharing Owner a validly executed Disposition of the relevant Tranche in favour of the Sharing Owner and shall exhibit or deliver such titles, searches, reports and/or Land Certificates as shall be appropriate having regard to part IV of the Schedule.  4.  The Specified Rent payable with effect from the first day of the month following payment of the purchase price to the Association shall be calculated as specified  in Part  II of the Schedule with the Association's Share reduced to reflect the Sharing Owner's purchase.  5.  At  settlement  of  the  purchase  of  a  relevant  Tranche  the  Sharing  Owner  shall  pay  any arrears of rent and any other sums due in terms of these presents to the Association.  6.  Upon  settlement  of  the  purchase  of  a  relevant  Tranche  (other  than  a  relevant  Tranche which  represents  the Association's Share)  the Sharing Owner and  the Association shall  forthwith execute a Memorandum detailing the Specified Rent. 

SCHEDULE 

 PART II 

 CALCULATION OF THE SPECIFIED RENT 

  

         1.  The Specified Rent payable by the Sharing Owner comprises:‐  (a)  a Basic Rent calculated  in accordance with the Association's rent policy, multiplied by the Association's Share;  (b)  a Management Charge, approved by Scottish Homes;  and  (c)  a  Service  Charge  in  respect  of  the  maintenance  and  other  services  provided  by  the Association  and is made up as follows:‐  BASIC RENT                        =  £ MANAGEMENT FEE/INSURANCE CHARGE          +  £   SERVICE CHARGE                                            + £                                                                                                      SPECIFIED RENT PER MONTH                             =£                                                                                         ===  2.  The Specified Rent is subject to review at First April  each year.  3.  The  Association  will  give  the  Sharing  Owner  not  less  than  four  weeks'  notice  of  any proposed change in the Specified Rent, in the form shown in the Appendix hereto.  4.  Where  a  Service  Charge  is  payable,  the  Association  will  issue  a  written  statement  of projected costs for the coming year,   duly certified by  its authorised officer, to the Sharing Owner along with the rent review notice.  5.  If  the  Sharing Owner wishes  to  contest  the  Specified Rent  chargeable,  he may  serve  a written notice on the Association of intention to appeal not more than four weeks after the date of service of the rent review notice.  6.  If the Association and the Sharing Owner cannot agree on the Specified Rent chargeable within four weeks of the date of service of the Sharing Owner's notice of intention to appeal, either party may for the purpose of having the Specified Rent fixed apply to an independent valuer being (a) a Chartered Surveyor nominated by the Chairman for the time being of the Scottish Branch of the Royal Institution of Chartered Surveyors (b) Rent Registration Service or (c) such other person as may be approved by Scottish Homes.   The decision of such independent valuer will be final and binding.     The expenses of the appeal will be allocated between the parties by such  independent valuer  as  he  deems  equitable  as  part  of  his  determination  and  such  allocation will  be  final  and binding upon the parties. 

 7.  If the Sharing Owner does not serve a notice of intention to appeal within the time limit, he will be deemed to have agreed the Specified Rent shown in the rent review notice.  8.  If  the Sharing Owner serves a notice of  intention  to appeal within  the  time  limit he shall nevertheless be liable for payment of the Specified Rent shown in the rent review notice from First April in the relevant year until another Specified Rent has been agreed between the Association and the Sharing Owner, or until the appeal is decided, as the case may be.  9.  The date of service of any notice served under this Schedule will be deemed to be the date of delivery  if the notice  is delivered by hand, or two working days after the date of posting  if the notice is sent by post.  APPENDIX  RENT REVIEW NOTICE  This  is an  important notice.      If  you  take no action  you will be deemed  to have agreed  the  rent payable.  Date:  To:  (name and address of the Sharing Owner)  From:   (name and address of Association)   Re:  (address of property)  We hereby give you notice that with effect from               next, the Specified Rent payable will be (£                 Specified Rent), made up as follows:‐  BASIC RENT x ASSOCIATION'S SHARE £                     =£ MANAGEMENT FEE/INSURANCE CHARGE                    +£ SERVICE CHARGE                                                      +£                                                                                                          SPECIFIED RENT                                                        =£                                                                                            =====  APPEAL  1.  If you wish to appeal the Specified Rent chargeable, you have four weeks from the date of service of this notice within which to serve a written notice on the Association of your intention to appeal. 2.  If agreement cannot be reached between us on the Specified Rent chargeable, within four weeks of  the date of  service of your notice of  intention  to appeal either you or we may  for  the purpose of having  the Specified Rent  fixed apply  to an  independent valuer being  (a) a Chartered Surveyor  nominated  by  the  Chairman  for  the  time  being  of  the  Scottish  Branch  of  the  Royal Institution of Chartered Surveyors (b) the Rent Registration Service or (c) such other person as may 

be approved by Scottish Homes.   The decision of such independent valuer will be final and binding.   The expenses of the appeal will be allocated between the parties by such independent valuer as he deems equitable as part of his determination and such allocation will be final and binding upon the parties.  3.  The Specified Rent shown in this notice will be payable unless and until you and we agree another Specified Rent, or another Specified Rent is fixed as the case may be.  NOTES  1.  If you do not serve written notice of  intention to appeal within the time  limit, you will be liable for payment of the Specified Rent as shown in this notice.  2.  The date of service of any notice will be deemed to be the date of delivery if the notice is delivered by hand, or two working days after the date of posting if the notice is sent by post.                                   ...........................................Signature                                 .............................................                                 ..............................................                                 On behalf of                 Housing Association Limited 

SCHEDULE 

 PART III 

 SERVICES 

   The Association will provide the following services:‐  Provision  of  buildings  insurance  subject  to  such  excesses,  exclusions  or  limitations  as  the Association or their insurers may impose [                          ]  The Association may add to, withdraw or change the services after consultation with the Sharing Owners, on giving not less than four weeks' notice of any material change. 

SCHEDULE 

 PART IV 

 TITLE PROVISIONS 

   

 Provisions regulating the passing of title pursuant to Clause FOUR (b) (ii) (quarto) of the foregoing Agreement (hereinafter in this Part of the Schedule referred to as "Clause FOUR") and Paragraph 3 of Part I of the Schedule (hereinafter in this Part of the Schedule referred to as "Paragraph 3").  1.  In this Part of the Schedule the following expressions shall have the following meanings:‐  "Subjects  of  Sale"  in  the  context  of  Clause  FOUR means  the  Sharing Owner's  Share  and  in  the context of Paragraph 3 means a relevant Tranche;  "the 1979 Act" means the Land Registration (Scotland) Act 1979;  "the  Seller"  in  the  context  of  Clause  FOUR  means  the  Sharing  Owner  and  in  the  context  of Paragraph 3 means the Association and  "the  Purchaser"  in  the  context  of  Clause  FOUR  means  the  Association  and  in  the  context  of Paragraph 3 means the Sharing Owner.  2.  If the title to the Subjects of Sale has not been registered in accordance with the provisions of the 1979 Act the Seller will exhibit or deliver a valid and marketable title together with either:‐  (a)  if at the date of settlement the provisions of Section 2 (1) and Section 3(3) of the 1979 Act do not apply to the transfer of the Seller's interest clear Searches in the Property Register for forty years and in the Personal Register for the prescriptive period;  or  (b)  if the provisions of the said sections do so apply a Form 10 Report brought down to a date as  near  as practicable  to  the  date of  settlement  and  showing  no  entries  adverse  to  the  Seller's interest  (the cost  (if any) of said  report being  the  responsibility of the Seller) and  in addition  the Seller will furnish to the Purchaser such documents and evidence,  including a plan, as the Keeper may  require  to  enable  the  Keeper  to  issue  a  Land  Certificate  in  name  of  the  Purchaser  as  the registered proprietor of the Subjects of Sale and containing no exclusion of  indemnity  in terms of Section  12(2)  of  the  1979  Act;   which  Land  Certificate will  disclose  no  entry,  deed  or  diligence prejudicial to the Purchaser's interest other than such as are created by or against the Purchaser or have been disclosed to and accepted by the Purchaser prior to the date of settlement.  Declaring  always  that  where  alternative  (b)  applies  then  notwithstanding  the  delivery  of  the Disposition  referred  to  in  Clause  FOUR  or  Paragraph  3  as  the  case may  be  this  paragraph  shall remain in full force and effect and may be founded upon.  3.  If the title to the Subjects of Sale has been registered in accordance with the provisions of the 1979 Act, then:‐ 

 (a)  the Seller warrants that there are no outstanding charges, no unduly onerous burdens and no over‐riding interests which adversely affect the Subjects of Sale;  and  (b)  there will  be  exhibited  or  delivered  to  the  Purchaser  a  Land  Certificate  (containing  no exclusion of indemnity under Section 12(2) of the 1979 Act), all necessary links in title evidencing the Seller's exclusive ownership of the Subjects of Sale and a Form 12 Report brought down as near as practicable to the date of settlement and showing no entries adverse to the Seller's  interest (the cost (if any) of said Report being the responsibility of the Seller).   In addition the Seller will furnish to the Purchaser such documents and evidence as the Keeper may require to enable the interest of the Purchaser to be registered in the Land Register without exclusion of indemnity under Section 12 (2) of the 1979 Act.   The Land Certificate to be issued to the Purchaser will disclose no entry, deed or diligence prejudicial to the Purchaser's interest other than such as are created by or against the Purchaser or have been disclosed to and accepted by the Purchaser prior to the date of settlement.    Notwithstanding delivery of the Disposition referred to  in Clause FOUR or Paragraph 3 as the case may be this paragraph shall remain in full force and effect and may be founded upon.  4.  Where  the Seller  is  the Sharing Owner,  there  shall be delivered at or before  the date of settlement (unless the Sharing Owner is a married couple) an Affidavit granted by the Seller to the effect that there  is no non‐entitled spouse of the Seller, the consent of the entitled spouse of the Seller or a renunciation from the entitled spouse of the Seller, all in terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 as amended. 

        

SHARED OWNERSHIP OCCUPANCY AGREEMENT 

 between 

                    * HOUSING ASSOCIATION LIMITED                 

 and  *