When affordable housing units were constructed and sold by the developer as part of a low-cost market housing scheme in Milton Keynes, a Deed of Covenant was required to be entered into between: (1) the Developer (2) the initial Buyer and (3) the Council which obliged all future owners not to enter into a contract for the sale of the property without first completing a supplemental Deed of Covenant with the Council that the property may not be sold for more than a specified maximum percentage of the full open market value, to an Approved Disponee (who meets the relevant eligibility criteria for the purchase of low-cost housing); and this applies to all subsequent sales. A Restriction is required to be entered on the registered title to the property, requiring certification that any future disposal complies with the provisions of the Low-Cost Housing Scheme.

The Low-Cost Housing Scheme Disposal Approval Process is as follows:

The Seller must:

• not enter into a contract to sell the property without notifying the Council in writing of its intention to dispose of the property (by completing the “Availability Notice” see below;
• obtain independent valuations from not less than two reputable local estate agents (with knowledge of the local housing market) to demonstrate that the proposed sale price of the property does not exceed the maximum percentage amount (as defined in the Deed of Covenant) of the full open market value of the property, as at the date of the Availability Notice;
• only enter into a contract to dispose of the property to an Approved Disponee who meets the relevant eligibility criteria for the purchase of low-cost housing (the Buyer must complete the attached “Eligibility Criteria” form for approval by the Council);
• not dispose of the property without first procuring that the Approved Disponee enters into a supplemental Deed of Covenant with the Council (as set out in the original Deed of Covenant) to observe the low-cost housing covenants and also consents to the Restriction on the registered title to the property ensuring that any future disposal complies with the provisions of the Low-Cost Housing Scheme.
• pay the Council’s reasonable costs for reviewing the title documentation and eligibility of the Buyer, considering the independent property valuations and prior deeds of covenant and for providing a Certificate of Compliance to HM Land Registry that the disposal complies with the provisions of the Low-Cost Housing Scheme (such costs being not less than £407.44) 

The Council will require sight of the original sale document and office copies of the title registers plus the Memorandum of Sale and these should be sent as soon as possible.

Once completion of the sale has taken place and the Council has received a scanned certified copy of the supplemental Deed of Covenant, along with a copy of the Transfer Deed and payment of the Council’s fees, a Certificate of Compliance will be provided for the Buyer to register the disposal.