Housing (Financial Provisions) (Scotland) Act 1972

PART I — Housing Subsidies

Introduction of new housing subsidies

Introduction of new housing subsidies

1

• (1) The subsidies set out in subsection (2) below shall be payable to local authorities in the circumstances, and subject to the conditions, set out in this Part of this Act.

• (2) The said subsidies are—

• Subsidies to be credited to the housing revenue account. The residual subsidy. The housing expenditure subsidy. The high cost subsidy.

• Subsidies to be credited to other accounts. The rent rebate subsidy. The rent allowance subsidy. The slum clearance subsidy.

• (3) The subsidies set out in this subsection shall be payable to development corporations and the Scottish Special Housing Association in the circumstances, and subject to the conditions, set out in this Part of this Act.

The said subsidies are—

• (4) None of the subsidies set out in subsections (2) and (3) above shall be payable, whether to a local authority, a development corporation or the Scottish Special Housing Association, for the year 1971-72 or for any earlier year, except that, in the circumstances, and subject to the conditions, set out in this Part of this Act, the slum clearance subsidy shall be payable to a local authority in respect of expenditure incurred in the year 1971-72.

• (5) The subsidies so receivable by housing authorities shall be paid by the Secretary of State out of money provided by Parliament.

Housing subsidies payable to local authorities

The residual subsidy

2

• (1) This section has effect as to the circumstances in which residual subsidy is payable to a local authority.

• (2) For the purpose of determining the amount of residual subsidy payable to a local authority for the year 1972-73 and subsequent years, a calculation shall be made of the residual entitlement of the local authority as defined in subsection (3) below.

• (3) Subject to subsections (4) and (5) below, the residual entitlement of a local authority shall consist of—

• (a) the amount of exchequer contributions to which they are entitled in respect of property to which the housing revenue account relates for the year 1971-72 under the enactments described in Part I of Schedule 1 to this Act, as finally determined by the Secretary of State under paragraph 5 of Schedule 8 to this Act, and

• (b) the further amount of such exchequer contributions to which they would be entitled for the year 1971-72 if houses, in respect of which proposals for their provision were submitted to the Secretary of State in a form acceptable to him before 1st December 1971 for his approval but which were not completed in that year, had been completed in that year ; and accordingly the provisions of Part I of the Act of 1968 relating to the calculation of exchequer contributions payable thereunder shall apply for the purpose of calculating the amount referred to in this paragraph as if such houses had been so completed, and

• (c) the amount of any contribution which they are entitled to receive for the year 1971-72 from another local authority under section 9(4)(b) of the Housing and Town Development (Scotland) Act 1957 in pursuance of an overspill agreement.

• (4) The residual entitlement shall not include any amount which was paid to the local authority under any enactment and on receipt of which they were required to make a payment of the same or a greater amount to any other person.

• (5) The residual entitlement shall not include any amount referred to in subsection (3)(b) above in so far as it exceeds any amount carried to the credit of the housing revenue account under paragraph 1(4) of Schedule 7 to the Act of 1968 for the year 1971-72.

• (6) The residual entitlement shall be expressed as a sum per house for the year 1971-72.

• (7) Subject to subsections (8) and (10) below, the amount of residual subsidy payable to a local authority for the year 1972-73 shall be—

• (a) an amount per house which is £9 less than the residual entitlement as expressed in subsection (6) above, plus

• (b) where the residual entitlement is limited by subsection (5) above, an amount equal to the amount which is not included in the residual entitlement by virtue of that subsection.

• (8) The amount referred to in subsection (7)(b) above shall be payable only if the local authority comply with the conditions set out in paragraph 1 of Schedule 10 to this Act.

• (9) The amount of residual subsidy payable to a local authority for the year 1973-74 shall be an amount per house which is £10 less than the amount per house payable to them for the year 1972-73 under subsection (7)(a) above; and in each subsequent year the amount per house of residual subsidy payable to a local authority shall be £10 less than the amount per house payable for the immediately preceding year, and so on until the amount becomes zero.

• (10) Where any houses of a local authority referred to in subsection (3)(b) above have not been completed by the end of the year 1974-75, then any residual subsidy which has been paid to the local authority on the basis that those houses had been completed shall, if the Secretary of State so requires, be repaid to him on such terms as he may determine.

• (11) Any question as to the residual entitlement and as to the number of houses to which the housing revenue account relates shall be determined by the Secretary of State.

The housing expenditure subsidy and associated rate fund contribution

3

• (1) This section has effect as to the circumstances in which—

• (a) housing expenditure subsidy is payable to a local authority, and

• (b) a contribution out of the general rate fund associated with the housing expenditure subsidy is to be made by the local authority.

• (2) Subject to the provisions of this section, a local authority shall be entitled to housing expenditure subsidy if for the year 1972-73 or any subsequent year there is an increase in the local authority's expenditure per house which exceeds £6 or such other sum as the Secretary of State may by order from time to time determine.

• (3) In this section " qualifying amount" means, in relation to the year 1972-73 and subsequent years, the excess mentioned in subsection (2) above multiplied by the number of houses to which the housing revenue account relates for that year.

• (4) If there is a qualifying amount for any year (in this section called, in relation to the qualifying amount, " the base year ") then for the base year and for each subsequent year—

• (a) housing expenditure subsidy shall be payable to the local authority of an amount equal to the percentage of the qualifying amount specified in relation to the base year in column 2 of the Table below, and

• (b) the local authority shall make an associated contribution out of the general rate fund of an amount equal to the percentage of the qualifying amount specified in relation to that base year in column 3 of the said Table,

and accordingly, housing expenditure subsidy, and the associated contribution out of the general rate fund for any year (later than 1972-73) may comprise elements by reference to qualifying amounts for two or more different base years.

Base year for which the local authority has a qualifying amount	Amount of housing expenditure subsidy by reference to base year to be the following percentage of the qualifying amount	Amount of associated contribution out of the general rate fund by reference to base year to be the following percentage of the qualifying amount
1	2	3
1972-73	90 per cent	10 per cent
1973-74	85 per cent	15 per cent
1974-75	80 per cent	20 per cent
1975-76 and subsequent years	75 per cent	25 per cent

• (5) Housing expenditure subsidy for which the base year is any of the years 1972-73 to 1977-78 shall not be payable for the year 1982-83 or any subsequent year, and housing expenditure subsidy for which the base year is 1978-79 or any subsequent year shall not be payable for more than five years (including the base year).

• (6) Where by virtue of subsection (5) above housing expenditure subsidy based on any year is not to be payable, the associated contribution out of the general rate fund based on that year shall not be made.

• (7) For the purposes of this section, there is an increase in a local authority's expenditure per house if—

• (a) the local authority's expenditure for the year divided by the number of the local authority's houses to which the housing revenue account relates for that year exceeds

• (b) such expenditure for the immediately preceding year divided by the number of the local authority's houses to which the housing revenue account relates for that year,

and the excess is the amount of the increase per house.

• (8) Subject to subsections (9) and (10) below and paragraphs 2(6) and 3(5) of Schedule 10 to this Act, for the purposes of this section, references to a local authority's expenditure for any year are references to the total expenditure required to be debited to the local authority's housing revenue account for that year in so far as approved by the Secretary of State, but in the case of expenditure incurred as mentioned in sub-paragraphs (b), (c), (d) and (g) of paragraph 2 of Schedule 4 to this Act they are references to such amount of expenditure as the Secretary of State deems to be so incurred.

• (9) There shall not be included in the local authority's expenditure for a year—

• (a) (notwithstanding paragraph 2(a)(iv) of Schedule 7 to the Act of 1968) any expenditure in connection with houses approved under section 19 of that Act (unfit houses retained for temporary accommodation);

• (b) (notwithstanding paragraph 2(a)(iii) and (v) of Schedule 4 to this Act) any expenditure relating to the provision or improvement of dwellings in accordance with improvement proposals approved by the Secretary of State under section 2 of the Housing (Scotland) Act 1949 or under section 105 of the Housing (Scotland) Act 1950 or under section 13 of the Act of 1968, or expenditure incurred by the local authority under section 58 of the Act of 1969 (powers of local authority in respect of improvement of amenities of residential areas) on land to which the housing revenue account relates, in so far as such expenditure is met in that year by a contribution to the local authority under the said section 2, 105 or 13 or, as the case may be, under section 59 of the Act of 1969;

• (c) any amount repaid to the general rate fund under paragraph 1(5) of the said Schedule 4;

• (d) any amount referred to in paragraph 5 of that Schedule.

• (10) (Notwithstanding paragraph 2(e) of Schedule 4 to this Act) any payment made by an exporting authority to a receiving authority in pursuance of an overspill agreement towards expenditure of the receiving authority which is included in the calculation of the receiving authority's entitlement to any subsidy under Part I of this Act, shall be included in the exporting authority's expenditure to the extent of 25 per cent. of that payment only.

• (11) Section 14 of this Act shall apply to an order under subsection (2) above.

The high cost subsidy and associated rate fund contribution

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• (1) This section has effect as to the circumstances in which—

• (a) high cost subsidy is payable to a local authority, and

• (b) a contribution out of the general rate fund associated with the high cost subsidy is to be made by the local authority.

• (2) Subject to the provisions of this section, a local authority shall be entitled to high cost subsidy for any year if—

• (a) the amount of income per house which would have been receivable by them for the year from standard rents if no high cost subsidy or associated contribution out of the general rate fund had been payable for that year or any previous year (in this section referred to as " the local authority rent income") exceeds the amount of income per house receivable by all the local authorities in Scotland for that year from standard rents (in this section referred to as " the Scottish rent income ") by more than £39; and

• (b) the amount of expenditure per house falling on the housing revenue account of the local authority for that year in so far as approved by the Secretary of State exceeds the amount of expenditure per house falling on the housing revenue accounts of all the local authorities in Scotland for that year (in this section referred to as " the Scottish average expenditure ") by more than £39.

• (3) In this section " the qualifying amount" means the amount, if any (multiplied by the number of houses to which the housing revenue account relates for the year in question), required to be deducted from the local authority rent income to make that income equal to the Scottish rent income plus the sum referred to in subsection (2)(a) above or, as the case may be, that sum as varied by an order under subsection (7) below.

• (4) If, under subsection (2) above, a local authority are entitled to high cost subsidy for any year, then—

• (a) high cost subsidy shall be payable to the local authority of an amount equal to 75 per cent. of the qualifying amount, and

• (b) the local authority shall make an associated contribution out of the general rate fund of an amount equal to 25 per cent. of the qualifying amount together with an amount equal to the amount which would have been carried to the credit of the housing revenue account under paragraph 1(5) of Schedule 4 to this Act for that year if no high cost subsidy had been payable to the authority for that year or any previous year.

• (5) For the purposes of this section, the local authority rent income shall be determined under section 28 or 29 of this Act as if the expenditure specified in Schedule 4 to this Act had been such expenditure in so far as approved by the Secretary of State.

• (6) For the purposes of this section, the Secretary of State may for any year by order determine the Scottish rent income and the Scottish average expenditure.

An order under this subsection may be varied or revoked by a subsequent order under this subsection and shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

• (7) The Secretary of State may from time to time by order vary the sums referred to in subsection (2) above and section 14 of this Act shall apply to any such order.

The rent rebate subsidy

5

• (1) This section has effect as to the circumstances in which rent rebate subsidy is payable to a local authority.

• (2) Subject to subsection (3) below, the amount of rent rebate subsidy payable to a local authority for any year shall be the percentage specified in column 2 of the following Table of the local authority's standard amount of rent rebates for the year as defined for the purposes of Part II of this Act.

1	2
Year for which subsidy is payable	Percentage of standard amount of rent rebates for the year to be met by rent rebate subsidy
1972-73	90 per cent.
1973-74	85 per cent.
1974-75	80 per cent.
1975-76 and subsequent years	75 per cent.

• (3) For the purposes of this section, a local authority may add to their standard amount of rent rebates for the year 1972-73 such expenditure as the Secretary of State may approve as being incurred by the local authority in granting rent rebates under section 151(4) of the Act of 1966 between the beginning of that year and 30th September 1972.

The rent allowance subsidy

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• (1) This section has effect as to the circumstances in which rent allowance subsidy is payable to a local authority.

• (2) Subject to subsection (4) below, the amount of rent allowance subsidy payable to a local authority for any year shall be the percentage specified in column 2 of the following Table of the following amounts added together—

• (a) the local authority's standard amount of rent allowances for the year as defined for the purposes of Part II of this Act, and

• (b) the amount of the local authority's costs of administering the allowance scheme for the year.

1	2
Year for which subsidy is payable	Percentage of amount in paragraphs (a) and (b) of this subsection for the year to be met by rent allowance subsidy
1972-73	90 per cent.
1973-74	85 per cent.
1974-75	80 per cent.
1975-76 and subsequent years	75 per cent.

• (3) A local authority's costs of administering the allowance scheme for any year shall be arrived at by the local authority in accordance with such formula as the Secretary of State may from time to time determine.

Before making any such determination the Secretary of State shall consult with such associations of local authorities as appear to him to be concerned, and with any local authority with whom consultation appears to him to be desirable.

• (4) For the purposes of this section, a local authority may add to their standard amount of rent allowances for the year 1972-73 such expenditure as the Secretary of State may approve as being incurred by the local authority in granting rent allowances under Part II of this Act between the date when this Act comes into force and 31st December 1972.

The slum clearance subsidy

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• (1) This section has effect as to the circumstances in which slum clearance subsidy is payable to a local authority.

• (2) Subject to the provisions of this section, a local authority shall be entitled to slum clearance subsidy in respect of such expenditure incurred by them as may be approved by the Secretary of State which falls within any of the following categories—

• (a) any expenses in demolishing a building in pursuance of any provision of Part II or Part III of the Act of 1966 or Part I of the Act of 1969 less any such expenses which the local authority have recovered from the owner of the building under any such provision and any amount realised by the local authority in the sale of materials of the building ;

• (b) any expenses in the clearance of the site of any such building as is referred to in paragraph (a) above;

• (c) any payment under section 18 of the Act of 1969 (payments to certain owner-occupiers and others in respect of houses not meeting tolerable standard which are purchased or demolished) other than any such payment in respect of an interest in a house which has been purchased by the local authority for the purpose of bringing that house or another house up to the tolerable standard;

• (d) any payment under section 25 or 49 of the Act of 1966 or section 11 of the Act of 1969 (payments in respect of well-maintained houses) other than any such payment in respect of an interest in a house which has been purchased by the local authority for the purpose of bringing that house or another house up to the tolerable standard;

• (e) any expenditure incurred under section 52 of the Act of 1966 or section 15 of the Act of 1969 (provisions as to apparatus of public undertakers);

• (f) such part of the compensation paid to an owner of trade or business premises purchased by the local authority under Part III of the Act of 1966 or Part I of the Act of 1969 as is applicable to disturbance or to such other matters not directly relating to the value of the land purchased as may be determined by the Secretary of State;

• (g) the cost of any works carried out by the local authority under section 20(8) of the Act of 1966 (local authority may acquire and repair a house or building liable to closing or demolition order) or section 40 of the Act of 1966 or section 8 of the Act of 1969 (power of local authority to retain houses subject to demolition for temporary occupation);

• (h) any payment under section 160 of the Act of 1966 (payment of removal and other allowances to persons displaced) other than a payment under—

• (i) subsection (1)(a)(i) of that section in respect of any person displaced from a house or building under Part VII of that Act, or

• (ii) subsection (1)(a)(v), or (1)(b) where the recipient of the payment is also in receipt of compensation from the local authority in respect of property which he owned;

• (i) such other expenditure as the Secretary of State may direct.

• (3) A local authority shall not be entitled to slum clearance subsidy in respect of expenditure incurred by them—

• (a) before the beginning of the year 1971-72, or

• (b) after the beginning of the year 1971-72 and before the beginning of the year 1975-76, if it is expenditure in relation to land, being land expenditure in respect of which an exchequer contribution has been paid under Part I of the Act of 1968 or land which would be included for the purposes of residual entitlement under section 2(3)(b) of this Act.

• (4) If, under the foregoing provisions of this section, a local authority are entitled to slum clearance subsidy, then slum clearance subsidy shall be payable to the local authority of an amount equal to 75 per cent. of the annual loan charges referable to the amount of expenditure incurred by them in a year which falls within any of the categories set out in subsection (2) above, payable annually for the period of twenty years beginning with the year immediately following the year in which the expenditure was incurred.

• (5) For the purposes of subsection (4) above the annual loan charges referable to the amount of expenditure incurred by the local authority shall be the annual sum which, in the opinion of the Secretary of State, would fall to be provided by the local authority for the payment of interest on, and the repayment of, a loan of that amount repayable over a period of twenty years.

Housing subsidies payable to development corporations and the Scottish Special Housing Association

The residual subsidy

8

• (1) This section has effect as to the circumstances in which residual subsidy is payable to a development corporation and the Scottish Special Housing Association.

• (2) For the purpose of determining the amount of residual subsidy payable to a development corporation for the year 1972-73 and subsequent years, a calculation shall be made of the residual entitlement of the development corporation as defined in subsection (3) below.

• (3) The residual entitlement of a development corporation shall consist of—

• (a) the amount of exchequer contributions to which they are entitled for the year 1971-72 under the enactments described in Part II of Schedule 1 to this Act, as finally determined by the Secretary of State under paragraph 5 of Schedule 8 to this Act, and

• (b) the further amount of such exchequer contributions to which they would be entitled for the year 1971-72 if houses, in respect of which proposals for their provision were submitted to the Secretary of State in a form acceptable to him before 1st December 1971 for his approval but which were not completed in that year, had been completed in that year; and accordingly the provisions of Part I of the Act of 1968 relating to the calculation of exchequer contributions payable thereunder shall apply for the purpose of calculating the amount referred to in this paragraph as if such houses had been so completed, and

• (c) the amount of any contribution which they are entitled to receive for the year 1971-72 from a local authority under section 9(4)(b) of the Housing and Town Development (Scotland) Act 1957 in pursuance of an overspill agreement.

• (4) The residual entitlement shall be expressed as a sum per house for the year 1971-72.

• (5) Subject to subsection (6) below, the amount of residual subsidy payable to a development corporation for the year 1972-73 shall be an amount per house which is £18 less than the residual entitlement as expressed in subsection (4) above; and in each subsequent year the amount per house of residual subsidy payable to a development corporation shall be £20 less than the amount per house payable for the immediately preceding year, and so on until the amount becomes zero.

• (6) Where any houses of a development corporation referred to in subsection (3)(b) above have not been completed by the end of the year 1974-75, then any residual subsidy which has been paid to the development corporation on the basis that those houses had been completed shall, if the Secretary of State so requires, be repaid to him on such terms as he may determine.

• (7) Any question as to the residual entitlement and as to the number of development corporation houses shall be determined by the Secretary of State.

• (8) Subsections (2) to (7) of this section shall apply to the Scottish Special Housing Association as they apply to a development corporation, except that—

• (a) in subsection (3)(a) for the reference to Part II of Schedule 1 to this Act there shall be substituted a reference to Parts III and IV of that Schedule,

• (b) subsection (3)(c) shall be omitted,

• (c) in subsection (7) for the reference to development corporation houses there shall be substituted a reference to Scottish Special Housing Association houses.

The housing expenditure subsidy

9

• (1) This section has effect as to the circumstances in which housing expenditure subsidy is payable to a development corporation and the Scottish Special Housing Association.

• (2) Subject to the provisions of this section, a development corporation shall be entitled to housing expenditure subsidy if for the year 1972-73 or any subsequent year there is an increase in the development corporation's expenditure per house which exceeds £6 or such other sum as the Secretary of State may by order from time to time determine.

• (3) In this section " the qualifying amount" means, in relation to the year 1972-73 and subsequent years, the excess mentioned in subsection (2) above multiplied by the number of development corporation houses.

• (4) If there is such a qualifying amount for any year (in this section called, in relation to the qualifying amount, " the base year") then for the base year and for each subsequent year housing expenditure subsidy shall be payable to the development corporation of an amount equal to the qualifying amount; and accordingly, housing expenditure subsidy for any year (later than 1972-73) may comprise elements by reference to qualifying amounts for two or more different base years.

• (5) Housing expenditure subsidy for which the base year is any of the years 1972-73 to 1977-78 shall not be payable for the year 1982-83 or any subsequent year, and housing expenditure subsidy for which the base year is 1978-79 or any subsequent year shall not be payable for more than five years (including the base year).

• (6) For the purposes of this section, there is an increase in a development corporation's expenditure per house if—

• (a) the development corporation's expenditure for the year as determined by the Secretary of State divided by the number of development corporation houses for that year exceeds

• (b) such expenditure for the immediately preceding year divided by the number of development corporation houses for that year,

and the excess is the amount of the increase per house.

• (7) Section 14 of this Act shall apply to an order under subsection (2) above.

• (8) Subsections (2) to (7) of this section shall apply to the Scottish Special Housing Association as they apply to a development corporation except that in subsection (6) for the reference to development corporation houses there shall be substituted a reference to Scottish Special Housing Association houses.

The high cost subsidy

10

• (1) This section has effect as to the circumstances in which high cost subsidy is payable to a development corporation and the Scottish Special Housing Association.

• (2) Subject to the provisions of this section, a development corporation shall be entitled to high cost subsidy for any year if—

• (a) the amount of income per house which would have been receivable by them for the year from standard rents if no high cost subsidy had been payable for that year or any previous year (in this section referred to as " the development corporation rent income") exceeds the Scottish rent income for that year by more than such amount as the Secretary of State may from time to time determine; and

• (b) the amount of expenditure per house of the development corporation for that year as determined by the Secretary of State exceeds the Scottish average expenditure for that year by more than such amount as the Secretary of State may from time to time determine.

• (3) In this section " the qualifying amount " means the amount, if any, (multiplied by the number of development corporation houses for the year in question), required to be deducted from the development corporation rent income to make that income equal to the Scottish rent income plus the amount determined by the Secretary of State under subsection (2)(a) above.

• (4) If, under subsection (2) above, a development corporation are entitled to high cost subsidy, then high cost subsidy shall be payable to the development corporation of an amount equal to the qualifying amount.

• (5) In this section, " the Scottish rent income " and " the Scottish average expenditure " have the same meanings respectively as they have in subsection (2)(a) and (b) of section 4 of this Act, and subsection (6) of that section shall apply for the purposes of this section as it applies for the purposes of that section.

• (6) This section shall apply to the Scottish Special Housing Association as it applies to a development corporation except that—

• (a) for any reference to development corporation houses and the development corporation rent income there shall be substituted respectively references to Scottish Special Housing Association houses and the Scottish Special Housing Association rent income ;

• (b) in paragraphs (a) and (b) of subsection (2) for the words " such amount as the Secretary of State may from time to time determine " there shall be substituted the words " more than £39 ";

• (c) in subsection (3) for the words from " amount deter mined " to the end there shall be substituted the words " sum referred to in subsection (2)(a) above or, as the case may be, that sum as varied by an order under subsection (5A) below ";

• (d) after subsection (5) there shall be inserted the following subsection—

(5A) The Secretary of State may from time to time by order vary the sums referred to in subsection (2) above and section 14 of this Act shall apply to any such order.

The rent rebate subsidy

11

• (1) Subject to subsection (2) below, rent rebate subsidy shall be payable to a development corporation for any year of an amount equal to the standard amount of rent rebates of the development corporation for the year as defined for the purposes of Part II of this Act.

• (2) For the purposes of this section, a development corporation may add to their standard amount of rent rebates for the year 1972-73 such expenditure as the Secretary of State may approve as being incurred by the development corporation in granting rent rebates between the beginning of that year and 30th September 1972.

• (3) This section shall apply to the Scottish Special Housing Association as it applies to a development corporation.

Additional payment towards certain deficits of the Scottish Special Housing Association

12

Where the Secretary of State is satisfied that the total net annual expenditure (as calculated in accordance with rules made by the Secretary of State) necessarily incurred in the year 1972-73 or in any subsequent year by the Scottish Special Housing Association, acting otherwise than as agents,—

• (a) in providing new houses ; and

• (b) In improving housing accommodation, whether by the provision of dwellings by means of the conversion of houses or other buildings or by the improvement of dwellings; and

• (c) in providing housing accommodation, being accommodation acquired by the Association from any such body as is mentioned in section 25(1)(e) of the Act of 1968 ; and

• (d) in improving the amenities of a predominantly residential area in accordance with arrangements made between the Association and a local authority ;

is greater than the sum of—

• (i) the subsidies paid to them under this Part of this Act for the year in question, and

• (ii) any exchequer contributions made to them for the year in question under section 16 of the Act of 1968, and

• (iii) any grant paid to the Association for the year in question under section 59(7)(b) of the Act of 1969,

the Secretary of State may, with the approval of the Treasury, make such further payment to the Association in respect of the excess as he may determine.

Supplemental

Payment of subsidies and accounting provisions

13

• (1) Any subsidy to be paid by the Secretary of State under this Part of this Act shall be payable at such times and in such manner as the Treasury may direct and subject to such conditions as to records, certificates, audit or otherwise, as the Secretary of State may, with the approval of the Treasury, impose.

• (2) Without prejudice to the generality of subsection (1) above, the making of any such payment shall be subject to the making of a claim for the payment in such form, and containing such particulars, as the Secretary of State may from time to time determine.

• (3) The aggregate amount of any one subsidy payable under this Part of this Act to a housing authority for any year shall be calculated to the nearest pound, by disregarding an odd amount of 50 new pence, or less, and by treating an odd amount exceeding 50 new pence as a whole pound.

Provisions as to certain orders

14

• (1) This section has effect as respects orders to which this section is applied by any provision of this Part of this Act.

• (2) An order under any such provision may be varied or revoked by a subsequent order made under that provision.

• (3) An order made under any such provision—

• (a) shall be made by the Secretary of State with the concurrence of the Treasury,

• (b) shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

• (4) Any such order may be made to apply to any description of local authorities or development corporations specified in the order or to a specified local authority or development corporation.

• (5) Before making an order under any such provision the Secretary of State shall consult with such associations of local authorities as appear to him to be concerned and with any local authority with whom consultation appears to him to be desirable.

PART II — Rent Rebates and Rent Allowances

Rent rebates

15

• (1) It shall be the duty of every local authority to bring into operation not later than 1st October 1972 a scheme for granting to persons who occupy as their homes houses to which the local authority's housing revenue account relates and which are let to them by the local authority rebates from rent, calculated in accordance with the provisions of the scheme by reference to their needs and their resources.

• (2) A scheme under this section is referred to in this Act as a " rebate scheme ".

• (3) No rebate from the rent of a house shall be granted by virtue of this section to any person if a substantial proportion of the charges in respect of the house is attributable to the use of furniture.

• (4) This section shall apply to a development corporation or the Scottish Special Housing Association as it applies to a local authority, except that in subsection (1) for the reference to houses to which the local authority's housing revenue account relates there shall be substituted a reference to development corporation houses or, as the case may be, Scottish Special Housing Association houses.

Rent allowances

16

• (1) It shall be the duty of every local authority to bring into operation not later than 1st January 1973 a scheme for granting to private tenants who occupy as their homes houses in the authority's district allowances, calculated in accordance with the provisions of the scheme by reference to their needs and their resources, towards the rent payable under their tenancies.

• (2) A scheme under this section is referred to in this Act as an " allowance scheme ".

• (3) In this Part of this Act " private tenant" means a person who is a protected tenant or a statutory tenant for the purposes of the Act of 1971 (including a person who is a tenant of accommodation which is deemed to be a dwelling-house let on a protected tenancy or subject to a statutory tenancy under section 119(1) of that Act).

• (4) A person is also a private tenant if he occupies a house let to him by—

• (a) a joint board or joint committee as respectively defined by the Local Government (Scotland) Act 1947, or the common good of a burgh or any trust under the control of a local authority as defined in that Act,

• (b) the Housing Corporation,

• (c) a housing association,

• (d) a housing trust within the meaning of section 5 of the Act of 1971 or any authorised society within the meaning of the Housing Act 1914,

under a tenancy which would be a protected tenancy but for the said section 5.

• (5) A person is also a private tenant if he occupies a house let to him by the Crown Estate Commissioners and his tenancy would be a protected tenancy but for section 4 of the Act of 1971.

• (6) A local authority shall treat as if he were a private tenant any person who occupies a house let by them other than a house to which the housing revenue account relates and who would be entitled to a rebate if he occupied a house to which the housing revenue account relates.

The model schemes

17

• (1) Subject to the provisions of this Act, every rebate scheme and every allowance scheme shall conform with the provisions of Schedule 2 and Schedule 3 to this Act.

• (2) Regulations made by the Secretary of State with the consent of the Treasury may from time to time vary the provisions of Schedule 2 and Schedule 3 to this Act.

• (3) Before making regulations under subsection (2) above the Secretary of State shall consult with such associations of local authorities as appear to him to be concerned and with any local authority with whom consultation appears to him to be desirable.

• (4) Regulations under subsection (2) above shall be made by statutory instrument and shall be subject to annulment in pursuance of a resolution of either House of Parliament.

• (5) In this Act, the " model scheme" of an authority means a rebate scheme, or, as the case may be, an allowance scheme containing such provisions, and only such provisions, as the authority are for the time being required by this section to include in their scheme:

Provided that if and so long as the authority's scheme contains any provision included in pursuance of paragraph 16 of Schedule 2 to this Act, the model scheme shall be assumed to include that provision.

• (6) In this Act an authority's "standard amount of rent rebates " for any period beginning on or after 1 October 1972, or " standard amount of rent allowances" for any period beginning on or after 1 January 1973, means—

• (a) if the authority have been operating the model scheme for that period, the amount of rebates or, as the case may be, allowances which they have granted for that period otherwise than under subsection (1) or (2) of section 18 of this Act;

• (b) if the authority have not been operating the model scheme for that period, the amount of rebates or, as the case may be, allowances, which they would have granted for that period otherwise than under subsection (1) or (2) of section 18 of this Act if they had been operating it.

• (7) The said standard amount shall be calculated or estimated by reference to the rebates or allowances actually granted by following such methods and principles as the Secretary of State may direct, either generally or in any particular case.

Extent to which authorities may depart from model schemes

18

• (1) A housing authority may grant to a person to whom their rebate scheme applies a rebate of a greater amount than they would otherwise grant if they consider that his personal or domestic circumstances are exceptional.

• (2) A local authority may grant to a person to whom their allowance scheme applies an allowance of a greater amount than they would otherwise grant if they consider that his personal or domestic circumstances are exceptional.

• (3) A housing authority may, subject to the consent of the Secretary of State, vary the provisions of Schedule 2 to this Act as they apply in relation to their rebate scheme, but no variation under this subsection shall be such that a person to whom the scheme applies receives less rebate than he would have received under the model scheme, and if a variation is made in a rebate scheme by a local authority, they shall make a variation in their allowance scheme which appears to them to correspond to it.

• (4) A local authority may, subject to the consent of the Secretary of State, vary the provisions of Schedule 2 to this Act as they apply in relation to their allowance scheme, but no variation under this subsection shall be such that a person to whom the scheme applies receives a smaller allowance than he would have received under the model scheme, and if a variation is made in an allowance scheme the authority making it shall make a variation in their rebate scheme which appears to them to correspond to it.

• (5) Without prejudice to the generality of subsections (3) and (4) above, an authority may, subject to the consent of the Secretary of State, vary the provisions of Schedule 2 to this Act so that in ascertaining the weekly income of the tenant and his spouse there is a total disregard of war disablement pension and special widow's pension.

• (6) The powers conferred by this section shall not be exercised by any authority in such a way that, on the best estimate which they can make, they are likely as a result to grant a greater amount of rebates or allowances than 110 per cent. of the authority's standard amount of rent rebates or, as the case may be, their standard amount of rent allowances for any year or part of a year.

• (7) The Secretary of State may give his consent under subsection (3) or (4) above either generally or in any particular case subject to such conditions as he may require.

Duty of housing authorities to publicise schemes

19

• (1) It shall be the duty of every housing authority to give such publicity to their rebate scheme as the Secretary of State may direct, either generally or in any particular case.

• (2) It shall be the duty of every local authority to give such publicity to their allowance scheme as the Secretary of State may direct, either generally or in any particular case, and to furnish to a private tenant of a house in their district or to a landlord of such a tenant, free of charge, on an application made by the tenant or landlord, such information about their allowance scheme and in such form as the Secretary of State may direct.

Duty of landlord to inform tenant of particulars of allowance scheme

20

• (1) It shall be the duty of a landlord of a house let to a private tenant—

• (a) to apply to the local authority in whose district the house is situated for information about the allowance scheme made by them, and

• (b) on receipt of that information, to furnish it to the tenant.

• (2) The duty imposed on a landlord by subsection (1) above shall be performed in accordance with regulations made by statutory instrument by the Secretary of State, which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

• (3) Any landlord who refuses or wilfully neglects to perform a duty imposed on him by subsection (1) above shall be guilty of an offence and liable on summary conviction to a fine not exceeding £50.

• (4) Where an offence under subsection (3) above which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any negligence on the part of, any director, manager, secretary or other officer of the body corporate, he as well as the body corporate shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Where the affairs of a body corporate are managed by its members this subsection shall apply in relation to the acts or defaults of a member in connection with his functions of management as if be were a director of the body corporate.

• (5) Subsections (3) and (4) above do not apply to the Housing Corporation.

Certain items included in rent to be excluded in calculating allowance

21

• (1) Where a private tenant's rent includes amounts payable—

• (a) in respect of rates, or

• (b) for the use of furniture or for services (not being such a service as would fall within a direction made by the Secretary of State under section 32(1)(b) of this Act applying to the local authority's district in which the private tenant resides, if the service were provided under the terms of the tenancy of a house to which a local authority's housing revenue account relates), or

• (c) for the use of part of the premises comprised in a dwelling-house as a shop or office or for business, trade or professional purposes,

then none of those amounts shall be treated for the purposes of this Part of this Act as rent.

• (2) Any question whether a private tenant's rent includes any sum payable in respect of or for any of the items referred to in paragraphs (a), (b) and (c) of subsection (1) above, or as to the amount so payable, shall, subject to paragraph 14 of Schedule 3 to this Act, be determined for the purposes of an allowance scheme by the authority who made the scheme.

• (3) In this section " rates" means any charge payable in respect of a rate as defined in the Local Government (Scotland) Act 1947.

Interpretation of Part II

22

• (1) In this Part of this Act, unless the context otherwise requires—

• " allowance " means an allowance under an allowance scheme;

• " allowance period " means a period for which an allowance is or may be granted ;

• " allowance scheme " has the meaning assigned to it by section 16 of this Act;

• " authority " means, in relation to a rebate scheme, a housing authority, and in relation to an allowance scheme, a local authority ;

• " landlord " includes any person from time to time deriving title under the original landlord and also includes, in relation to any house, any person other than the tenant who is, or but for Part II of the Act of 1971 would be, entitled to possession of the house;

• " pensionable age " has the meaning assigned to it by section 114(1) of the National Insurance Act 1965;

• " private tenant " has the meaning assigned to it by section 16 of this Act;

• " rebate " means a rebate under a rebate scheme ;

• " rebate period " means a period for which a rebate is or may be granted;

• " rebate scheme " has the meaning assigned to it by section 15 of this Act;

• " rent " means, in relation to a private tenant, the rent payable under his tenancy less any rent receivable from sub-letting any part of the house and, in relation to a tenant of a housing authority, means standard rent less any rent receivable from sub-letting any part of the house;

• " supplementary benefit " means benefit under Part II of the Ministry of Social Security Act 1966 except that it does not include benefit under section 6 (benefit to meet medical and similar requirements) or section 7 (benefit to meet exceptional requirements) of that Act;

• " tenant " means, in relation to a rebate scheme, a person who occupies a house as mentioned in section 15 of this Act and, in relation to an allowance scheme, a person who is a private tenant, or who is treated as a private tenant under section 16 of this Act, and includes a joint-tenant and a sub-tenant, and " tenancy " shall be construed accordingly.

• (2) In construing any reference in this Part of this Act to the amount of rebates or allowances granted by an authority account shall be taken of sub-paragraphs (5) and (6) of paragraph 18 of Schedule 3 to this Act.

PART III — Housing Accounts of Local Authorities

The housing revenue account

23

• (1) Subject to the provisions of this section and of Schedule 4 to this Act, every local authority shall for the year 1972-73 and subsequent years keep an account (to be called " the housing revenue account") of the income and expenditure of the authority in respect of—

• (a) all houses and other buildings which have been provided after 12th February 1919 for the purpose of—

• (i) Part III of the Housing (Scotland) Act 1925, or

• (ii) any enactment relating to the provision of housing accommodation for the working classes repealed by that Act, or

• (iii) Part V of the Housing (Scotland) Act 1950, or

• (iv) Part VII of the Act of 1966 ;

• (b) all land which after the said date has been acquired or appropriated for the purposes of any of the enactments mentioned or referred to in paragraph (a) above including—

• (i) all land which is deemed to have been acquired under Part III of the said Act of 1925 by virtue of section 15(4) of the Housing (Scotland) Act 1935, and

• (ii) any structures on such land which were made available to a local authority under section 1 of the Housing (Temporary Accommodation) Act 1944;

• (c) all dwellings in respect of which the Secretary of State has undertaken to make an exchequer contribution to the local authority under section 35 of the said Act of 1935;

• (d) all dwellings provided or improved by the local authority in accordance with improvement proposals approved by the Secretary of State under—

• (i) section 2 of the Housing (Scotland) Act 1949, or

• (ii) section 105 of the said Act of 1950, or

• (iii) section 13 of the Act of 1968,

and all land acquired or appropriated by the authority for the purpose of carrying out such proposals ;

• (e) all houses in a housing treatment area which have been purchased by the local authority under section 5 of the Act of 1969 for the purpose of bringing them or another house up to the tolerable standard.

• (2) Where a house is for the time being vested in a local authority by reason of the default of any person in carrying out the terms of any arrangements under which assistance in respect of the provision, reconstruction or improvement of the house has been given under any enactment relating to housing, the house shall be deemed for the purposes of subsection (1) above to be a house which has been provided by the authority under Part VII of the Act of 1966..

• (3) There shall not be included among the houses, buildings or land in respect of which the local authority are required by subsection (1) above to keep a housing revenue account—

• (a) a building provided or converted for use as a hostel or as part of a hostel and approved by the Secretary of State for the purposes of section 27(1) of the Housing (Scotland) Act 1949 or section 89(1) of the Housing (Scotland) Act 1950 or section 21(1) of the Act of 1968 except in the case of a building which the Secretary of State is satisfied has ceased to be used as a hostel or part of a hostel;

• (b) any house or land which the local authority have provided expressly for sale.

• (4) A local authority may, with the consent of the Secretary of State, include in or exclude from the housing revenue account any individual house or other property or categories of houses or other properties.

• (5) The Secretary of State may make a direction either generally or in relation to specified properties that any category of house or other property shall be included in or excluded from the housing revenue account of a local authority.

• (6) The houses and other property to which a local authority's housing revenue account relates shall include any property brought within the account before the commencement of this Act—

• (a) with the consent of the Secretary of State given under section 60(1)(f) of the Act of 1968, or

• (b) by virtue of subsection (2) of the said section 60 (houses vesting in local authority on default of another person).

• (7) The provisions of Schedule 4 to this Act shall have effect as respects the keeping of the housing revenue account.

The rent rebate account

24

• (1) Every local authority shall for the year 1972-73 and subsequent years keep an account (to be called " the rent rebate account ") and shall in each year—

• (a) carry to the credit of that account the amount of rent rebate subsidy payable to them under section 5 of this Act;

• (b) debit to that account—

• (i) the local authority's amount of rent rebates for the year, and

• (ii) the local authority's costs of administering their rent rebates for the year.

• (2) Where for any year a deficit is shown in the account, the local authority shall carry to the credit of the account in respect of that year an amount equal to the amount of the deficit.

The rent allowance account

25

• (1) Every local authority shall for the year 1972-73 and subsequent years keep an account (to be called " the rent allowance account") and shall in each year—

• (a) carry to the credit of that account the amount of rent allowance subsidy payable to them under section 6 of this Act;

• (b) debit to that account—

• (i) the local authority's amount of rent allowances for the year, and

• (ii) the local authority's costs of administering their rent allowances for the year.

• (2) Where for any year a deficit is shown in the account, the local authority shall carry to the credit of the account in respect of that year an amount equal to the amount of the deficit.

The slum clearance revenue account

26

• (1) Every local authority shall for the year 1972-73 and subsequent years keep an account (to be called " the slum clearance revenue account ")—

• (a) of the income and expenditure of the authority in respect of houses and other property acquired by them under, or appropriated, whether before or after this Act comes into force, for the purposes of Part II or Part III of the Act of 1966 or Part I of the Act of 1969, other than a house acquired under the said Part I for the purpose of bringing it or another house up to the tolerable standard; and

• (b) of any expenditure of the authority referred to in section 7(2) of this Act in respect of houses and other property which is not included in paragraph (a) above together with any income related to that expenditure.

• (2) The provisions of Schedule 5 to this Act shall have effect as respects the keeping of the slum clearance revenue account.

PART IV — Determination of Rents and other Charges

General provisions as to charges in respect of local authority houses

27

• (1) Subject to the provisions of this Part of this Act a local authority, in respect of the tenancy or occupation of—

• (a) houses to which the housing revenue account relates, and

• (b) houses provided by them but to which the housing revenue account does not relate,

may make such reasonable charges as they may determine and shall from time to time review such charges and make such changes either of the charges generally or of particular charges as circumstances may require.

• (2) In determining the standard rent of any house referred to in subsection (1)(a) above, a local authority shall, subject to section 33 of this Act, take no account of the personal circumstances of the tenant of the house.

Rents to be charged so as to balance housing revenue account

28

• (1) Subject to the provisions of this section and the next following section, a local authority shall for any year charge standard rents in such a way that the income receivable from standard rents together with all the other income specified as to be credited to the housing revenue account under Schedule 4 to this Act, except any amount carried to the credit of the housing revenue account under paragraph 1(5) of that Schedule and which is receivable by the local authority equals the amount of expenditure specified as to be debited to that account under that Schedule and which is payable by them.

• (2) A local authority shall increase or reduce standard rents in such a way that the provisions of subsection (1) above are complied with or, if they will so comply without making any alteration in standard rents, they shall make no such alteration:

Provided that, where, in order to comply with those provisions, the local authority would need to make an increase in standard rents by more than the maximum average rent increase they shall make only the maximum average rent increase.

• (3) Any increase in standard rents after 1st October 1972 shall be made on the date occurring 12 months after the previous increase except—

• (a) where, for the year immediately preceding the year in which the increase is made, the authority have complied with the provisions of section 28(1), or have acted in accordance with section 29(2), of this Act, and

• (b) where no residual subsidy has been payable to the authority for the year in which the increase is made.

• (4) In this section and in sections 29 and 31 of this Act, " maximum average rent increase " means an increase in standard rents sufficient to produce income receivable for the period of 12 months following the date of the increase which, divided by the number of houses for that period, is £26 greater than the income which would have been so receivable for the period where so divided if no alteration in standard rents had been made.

Provisions as to rents in 1972-73 and 1973-74

29

• (1) Subject to subsection (2) below, a local authority shall charge standard rents in the year 1972-73 and 1973-74 in accordance with the following provisions of this subsection—

• (a) they shall make such increase or increases in standard rents on or before 1st October 1972 that the amount of income per house (for the year 1972-73) receivable by them from standard rents for the period from 1st October 1971 to the end of the year 1972-73 exceeds by not less than £24 the amount of income per house (for the year 1972-73) which would have been so receivable if no alteration in standard rents had been made on or after 1st October 1971;

• (b) the amount of income per house (for the year 1973-74) receivable by them from standard rents for the year 1973-74 shall exceed by not less than £50 the amount of income per house which would be so receivable for that year if no alteration in standard rents had been made on or after 1st October 1971 ;

• (c) in 1973-74 they shall increase standard rents by the maximum average rent increase.

• (2) Where a local authority would comply with the provisions of section 28(1) of this Act in the year 1972-73 or 1973-74—

• (a) by increasing standard rents in that year by a lesser amount than the amount by which they are needed to increase standard rents in that year under subsection (1) above, or

• (b) by reducing standard rents in that year,

they shall make such alteration in standard rents in that year as is necessary in order to comply with those provisions, and where they would so comply without making any alteration in standard rents in that year, they shall make no such alteration.

Increases in rent of individual houses of housing authorities

30

• (1) Subject to subsection (2) below, a local authority shall not increase the income receivable from the standard rent of any house by more than £39 in any period of 12 months, except that any such increase made on or before 1st October 1972 shall not exceed, for the year 1972-73, £32 plus, where the amount of income for the year 1972-73 per house produced by the increase or increases in standard rents which the authority are required to make under section 29(1) of this Act exceeds £24, an amount equal to that excess.

• (2) The restrictions on any increase imposed by subsection (1) above shall not apply where a lease is granted to a new tenant of the house or where an improvement has been made in the house.

• (3) In subsection (2) above " improvement" includes structural alteration, extension or addition and the provision of additional fixtures or fittings, but does not include anything done by way of decoration or repair.

• (4) This section shall apply to a development corporation or the Scottish Special Housing Association as it applies to a local authority except that in subsection (1) the words from " plus " to the end shall be omitted.

Average standard rents of development corporation and Scottish Special Housing Association houses

31

• (1) A development corporation or the Scottish Special Housing Association shall not increase standard rents by more than the maximum average rent increase, and shall not make that increase or any other increase in standard rents at less than 12 monthly intervals, except where in the year immediately preceding the year in which any such increase is made they did not make the maximum average rent increase.

• (2) If high cost subsidy is payable to a development corporation or the Scottish Special Housing Association for any year, then the standard rents which they charge for that year shall not exceed an amount which, together with the high cost subsidy payable to them for that year, produces income which is equal to the development corporation rent income or, as the case may be, the Scottish Special Housing Association rent income as respectively defined in section 10 of this Act.

Service charges

32

• (1) A local authority shall be required to make a charge for the year 1972-73 and subsequent years in respect of the following items to which the housing revenue account relates—

• (a) any garage, car-port or other car parking facilities provided by them, whether before the year 1972-73 or not, in so far as not included within the terms of the tenancy of a house ;

• (b) any service provided by them under the terms of the tenancy of a house, except any such service as the Secretary of State may, after consultation with such associations of local authorities as appear to him to be concerned and with any local authority with whom consultation appears to him to be desirable, otherwise direct either generally or in a particular case.

• (2) Where a local authority made a charge for the year 1971-72 in respect of anything to which the housing revenue account relates—

• (a) provided by them under section 139 or 141 of the Act of 1966 (other than anything referred to in subsection (1)(a) or (b) above), or

• (b) supplied by them under section 140 of the Act of 1966,

and such a thing continues to be made available or supplied by them after that year, they shall continue to impose such a charge.

• (3) Any charge referred to in this section (in this Act called "a service charge") shall be of such amount as the local authority consider reasonable in all the circumstances.

Phasing out of supplementary charges

33

• (1) No local authority shall make a supplementary charge on the tenant of a house to which the housing revenue account relates for the year 1976-77 and subsequent years.

• (2) A local authority shall reduce and terminate any supplementary charge imposed by them before the year 1976-77, subject to the approval of the Secretary of State, in whatever manner they think fit.

• (3) In this Act, " supplementary charge " means, in relation to the tenant of a house, a charge payable under his tenancy supplementary to standard rent which is related to the financial circumstances of the tenant or his household.

PART V — Controlled and Regulated Tenancies

Conversion of controlled tenancies: general decontrol

34

• (1) Subject to section 35 of this Act, where, on the date applicable to the dwelling-house under the following provisions of this section, a dwelling-house is let on a protected tenancy or subject to a statutory tenancy which, in either case, is a controlled tenancy, the protected or statutory tenancy shall on that date cease to be a controlled tenancy and shall become a regulated tenancy.

• (2) Subject to the provisions of this section—

• (a) 1st January 1973 is the date applicable to a dwelling-house of a value of £50 or more,

• (b) 1st January 1974 is the date applicable to a dwelling-house of a value of less than £50 but not less than £25, and

• (c) 1st January 1975 is the date applicable to a dwelling-house of a value of less than £25.

• (3) The Secretary of State may by order substitute as the date applicable to a dwelling-house of such value as may be specified in the order a date earlier or later than that which would be applicable to it under subsection (2) above.

• (4) An order under this section—

• (a) may make different provision with respect to different registration areas,

• (b) may be varied or revoked by a subsequent order under this section, and

• (c) shall be made by statutory instrument.

• (5) In subsection (2) above " value " means the rateable value on the date on which this Act comes into force and subsections (1) and (2) of section 6 of the Act of 1971 shall apply for the purpose of ascertaining the rateable value on that date as they apply for the purpose of ascertaining the rateable value of a dwelling-house for the purposes of that Act:

Provided that any question arising under the said section 6 as applied by this subsection as to the proper apportionment of any value may be determined by the landlord and the tenant by agreement in writing.

• (6) If part of the premises comprised in a dwelling-house is used as a shop or office or for business, trade or professional purposes and is let on or subject to a controlled tenancy, then nothing in section 9 of the Act of 1971 shall prevent that tenancy becoming a regulated tenancy on the date applicable to the dwelling-house nor prevent any new tenancy granted to the tenant under that regulated tenancy or to any person who might succeed him as a statutory tenant from being a regulated tenancy.

Houses excluded from general decontrol

35

• (1) Subject to subsection (2) below, section 34 of this Act shall not apply to a dwelling-house let on or subject to a controlled tenancy if, on the date applicable to the dwelling-house under that section—

• (a) a closing order under section 15 or 18 of the Act of 1966, or a demolition order under the said section 15, has been made and served in accordance with that section (and not determined) with respect to the dwelling-house, or

• (b) an order under paragraph 1(2) of Schedule 2 to the Land Compensation (Scotland) Act 1963 declaring that the dwelling-house does not meet the tolerable standard has been made and a notice stating the effect of the order has been served in accordance with paragraph 1(3) of that Schedule.

• (2) The said section 34 shall apply to a dwelling-house excluded by subsection (1) above if—

• (a) in the case of a dwelling-house excluded by virtue of paragraph (a) of that subsection, the closing order or the demolition order is quashed by the sheriff on appeal or determined by the local authority, or

• (b) in the case of a dwelling-house excluded by virtue of paragraph (b) of that subsection, the order in question is not confirmed or is reduced by a court,

and the date applicable to the dwelling-house for the purposes of the said section 34 shall be the date of occurrence of the event upon which that section applied to the dwelling-house by virtue of this subsection.

Conversion of controlled tenancies: general provisions

36

• (1) In this Part of this Act " converted tenancy " means a tenancy which is or becomes a regulated tenancy by virtue of—

• (a) section 34 of this Act,

• (b) Part VI of the Act of 1971, or

• (c) paragraph 5 of Schedule 2 to the Act of 1971 (conversion on death of first successor),

and " the conversion" means the time when the tenancy became a regulated tenancy.

• (2) Section 24(1) of the Act of 1971 (increase of rent for improvements) shall not apply to any improvement completed before the conversion, but if the rent recoverable for the last rental period beginning before the conversion was less than it would have been if the landlord had served a notice of increase under section 58 of that Act in respect of an increase of rent by virtue of paragraph 1(3)(a) or that paragraph as applied by paragraph 2(3) of Schedule 8 to that Act, the rent recoverable under section 21(1) of that Act, as modified by subsection (3) below, shall be increased by the amount of that difference:

Provided that that increase shall not take effect except in pursuance of a notice of increase served by the landlord on the tenant specifying the increase and the date, which may be any date after the service of the notice, from which it is to take effect.

Section 25 of the Act of 1971 shall apply to a notice of increase under this proviso as it applies to a notice of increase described in that section.

• (3) In relation to any rental period beginning after the conversion, sections 21 to 23 of the Act of 1971 (rent limit and adjustments) shall have effect as if references therein to the last contractual period were references to the last rental period beginning before the conversion.

• (4) Section 2(1)(a) of the Act of 1971 (exclusion of tenancies where rent is less than two thirds of the rateable value) shall not apply to a converted tenancy after the conversion.

• (5) Section 42 of the Act of 1971 (determination of fair rent) shall apply in relation to the converted tenancy as if the references in subsection (3) of the said section 42 to the tenant under the regulated tenancy included references to the tenant under the tenancy before the conversion.

• (6) The enactments mentioned in subsection (1) above shall not be taken as affecting any court proceedings which are pending under the Act of 1971 at the time of the conversion, and a decision on which may affect the recoverable rent for any period before that time, or the rent under the regulated tenancy after the conversion so far as that depends on the recoverable rent before conversion.