house buying

[averil]

i am financing the purchase of a council house for my friend who has a 70 per cent discount. i have to pay �15.600 and we will keep the house for three years and receive �320 per cal month in rental. the value of the house is �52000.i am taking on full responsibilty for all repairs and management of the house for the next three years and financing the purchase with a loan. what i want to know is how we divide it all up after the house is resold?

[Ethel]

Where is this property? I am sure a proportion of the discount will have to be repaid if the property is sold on within five years

Will the title be in your name? Is that allowed?

Anyway - how you divide it is entirely up to the two of you. Where is your friend going to live when the property is resold? Whatever you decide must be in writing before entering the transaction, in case of death of either of you or a falling out between you. You must both protect your interests.

[averil]

we have confirmed that we only need to hold onto the property for three years. We are in Scotland and that is the required time for this council. He is moving away because of his job but has rented the flat for 17 years and gets the max discount. I do agree that this needs to be ironed out before any money exchanges hands.Any idea how we do this?

[bednobs]

see a solicitor. Isn't the whole idea of right to buy so that the tennant can own their own home, not so their friends can get rich quick by abusing their discount though?

[averil]

Yes get your point and in some way i agree but my friend has had a few really rough years and as the law allows it "why not". He is now currently renting elsewhere after finding a good job and if it was not for my help he wont have this opportunity. I admit i will make a nice profit too but i will be taking all the risks. Council housing was introduced as adequate housing for the less better off and as we he now has the right to buy he should take the benefit after all he has paid rent for the past seventeen years. I have loaned him loads of money in the past and he has given me the opportunity of this investment in order to repay me for my help. I posted this question to get advice as i am aware that some people may think i try to rip him off and that is not what i intend. He is also seeking advice in order to keep himself correct and we will be consulting a solicitor too. Just wanted to know what others would do?

[scoobydooby]

But you still haven't explained how you are going to have the property in your name - I don't think you'll be able to as it's your friends right to buy, not yours.

You may have to 'loan' him the money to buy the property in his name and then have the deeds transferred (although I don't even know if this would be possible but I think I remember reading something about time scales). That's a huge risk though - what if something happened to him whilst the property was in his name?

I'm surprised that this all appears to be easy for you. There should be no way possible for you to buy a property from the council in these circumstances. Affordable houses to rent are much harder to come by these days and 'first time buyers' are mortgaging at levels higher than ever before. I understand it's a good opportunity for you and I suspect most people would jump at the same chance. However, I think there should be much stricter rules to prevent this from happening. Personally, if I knew you I would be telling the council of your plan - so beware of who knows about this.....I'm just a normal person who really just wants a quiet life - so If this can annoy me a little it is going to seriously p155 most people off.