Housing Act 1980

Part I

CHAPTER I — The Right to Buy

Right to acquire freehold or long lease

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Exceptions to right to buy

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• (1) The right to buy does not arise if the landlord is a housing trust which is a charity within the meaning of the Charities Act 1960.

• (2) The right to buy does not arise if the landlord is a housing association which either—

• (a) is a charity (within the meaning of the Charities Act 1960); or

• (b) falls within paragraph (d) of section 15(3) of the 1977 Act (certain societies registered under the Industrial and Provident Societies Act 1965); or

• (c) has at no time received a grant under section 119(3) of the 1957 Act, section 29, 31, 32 or 33 of the 1974 Act or under any enactment mentioned in paragraph 2 of Schedule 2 to that Act.

• (3) The right to buy does not arise unless the landlord owns the freehold.

• (4) Subject to subsection (5) below, the right to buy—

• (a) does not arise in any of the circumstances mentioned in Part I of Schedule 1 to this Act, and

• (b) cannot be exercised in any of the circumstances mentioned in Part II of that Schedule.

• (5) The Secretary of State may by order enable the right to buy to be exercised in relation to dwelling-houses held by local authorities otherwise than under Part V of the 1957 Act or such descriptions of such dwelling-houses as may be specified in the order; and any such order may contain such supplementary provisions, including provisions modifying the following provisions of this Chapter, as appear to the Secretary of State necessary or expedient

Meaning of "house", "flat", "dwelling-house" and " relevant time "

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• (1) The following provisions apply to the interpretation of "house", "flat", "dwelling-house" and "relevant time" when used in this Chapter.

• (2) A dwelling-house is a house if, and only if, it (or so much of it as does not consist of land included by virtue of section 50(2) of this Act) is a structure reasonably so called; so that—

• (a) where a building is divided horizontally, the flats or other units into which it is divided are not houses; and

• (b) where a building is divided vertically, the units into which it is divided may be houses; and

• (c) where a building is not structurally detached it is not a house if a material part of it lies above or below the remainder of the structure.

• (3) Any dwelling-house which is not a house is a flat.

• (4) There shall be treated as included in the dwelling-house any land used for the purposes of the dwelling-house which the landlord and the tenant agree to include.

• (5) The relevant time is the date on which the tenant's notice claiming to exercise the right to buy is served; except that, if that notice is served within six months of the commencement of this Chapter, the relevant time is the date on which this Act is passed.

Joint tenants and members of family occupying dwelling-house otherwise than as joint tenants

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• (1) Where a secure tenancy is a joint tenancy then, whether or not each of the joint tenants occupies the dwelling-house as his only or principal home, the right to buy and the right to a mortgage belong jointly to all of them or to such one or more of them as may be validly agreed between them; and the agreement is not valid unless the person or at least one of the persons to whom the right to buy is to belong occupies the dwelling-house as his only or principal home.

• (2) A secure tenant may, in his notice under section 5 claiming to exercise the right to buy, require that not more than three members of his family who are not joint tenants but occupy the dwelling-house as their only or principal home should share the right to buy with him ; but he may validly do so in the case of any such member only if—

• (a) that member is his spouse or has been residing with him throughout the period of twelve months ending with the giving of the notice; or

• (b) the landlord consents.

• (3) Where by such a notice any members of the tenant's family are validly required to share the right to buy with the tenant, both the right to buy and the right to a mortgage belong to the tenant and those members jointly and he and they shall be treated for the purposes of this Chapter as joint tenants.

Notice claiming exercise of right to buy

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• (1) Where a secure tenant serves on the landlord a written notice claiming to exercise the right to buy, the landlord shall (unless the notice is withdrawn) serve on the tenant, within four weeks, or in a case falling within subsection (2) below, eight weeks, either—

• (a) a written notice admitting the tenant's right; or

• (b) a written notice denying the tenant's right and stating the reasons why, in the opinion of the landlord, the tenant does not have the right to buy.

• (2) A case falls within this subsection if the periods counting towards the three years required by section 1(3) above include a period during which the landlord was not the landlord on which the tenant's notice under subsection (1) above is served.

• (3) A tenant's notice under subsection (1) above may be withdrawn at any time by notice in writing served on the landlord.

Purchase price

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• (1) The price payable for a dwelling-house on a conveyance or grant in pursuance of this Chapter is—

• (a) the amount which, under this section, is to be taken as its value at the relevant time; less

• (b) the discount to which the purchaser is entitled under this Chapter.

• (2) The value of a dwelling-house at the relevant time shall be taken to be the price which, at that time, it would realise if sold on the open market by a willing vendor on the assumptions stated, for a conveyance, in subsection (3) below and, for a grant, in subsection (4) below, and disregarding any improvements made by any of the persons specified in subsection (5) below and any failure by any of those persons to keep the dwelling-house in good internal repair.

• (3) For a conveyance the assumptions are that—

• (a) the vendor was selling for an estate in fee simple with vacant possession;

• (b) neither the tenant nor a member of his family residing with him wanted to buy; and

• (c) the dwelling-house was to be conveyed with the same rights and subject to the same burdens as it would be in pursuance of this Chapter.

• (4) For the grant of a lease the assumptions are that—

• (a) the vendor was granting a lease for 125 years with vacant possession (subject to paragraph 11(2) of Schedule 2 to this Act);

• (b) neither the tenant nor a member of his family residing with him wanted to take the lease ;

• (c) the ground rent would not exceed £10 per annum ; and

• (d) the grant was to be made with the same rights and subject to the same burdens as it would be in pursuance of this Chapter.

• (5) The persons mentioned in subsection (2) above are—

• (a) the secure tenant;

• (b) any person who under the same tenancy was a secure tenant before him ; and

• (c) any member of his family who, immediately before the secure tenancy was granted, was a secure tenant of the same dwelling-house under another tenancy.

Discount

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• (1) A person exercising the right to buy is entitled to a discount equal, subject to the following provisions of this section, to the following percentage of the price before discount, that is to say—

• (a) if the period to be taken into account under subsection (5) below is less than four years, 33 per cent.; and

• (b) if that period is four years or more, 33 per cent, plus one per cent, for each complete year by which that period exceeds three years, but not together exceeding 50 per cent.

• (2) The discount shall not reduce the price below the amount which, in accordance with any determination made by the Secretary of State, is to be taken as representing so much of the costs incurred in respect of the dwelling-house as, in accordance with the determination, is to be treated as incurred after 31st March 1974 and as relevant for the purposes of this subsection ; and if the price before discount is below that amount, there shall be no discount.

• (3) A determination under subsection (2) above may make different provision for different cases or descriptions of case, including different provision for different areas, and may provide for exceptions from the requirements of that subsection.

• (4) The discount shall not in any case reduce the price by more than such sum as the Secretary of State may by order prescribe.

• (5) The period to be taken into account for the purposes of the discount is, subject to the following provisions of this section, the aggregate of the periods during which, before the service of the notice claiming to exercise the right to buy.—

• (a) the secure tenant or his spouse or deceased spouse was either a secure tenant or the spouse of a secure tenant; or

• (b) the secure tenant occupied accommodation provided for him as a member of the regular armed forces of the Crown or the secure tenant's spouse occupied accommodation so provided for the secure tenant's spouse.

• (6) A period shall be taken into account under subsection (5)(a) above whether or not the dwelling-house or the landlord was the same as at the time of the service of the notice claiming to exercise the right to buy, unless the landlord was then a body specified in subsection (1) or (2) of section 2 of this Act; but—

• (a) no period during which the tenant's spouse was a secure tenant or the spouse of a secure tenant shall be so taken into account unless both the secure tenant and his spouse occupied the dwelling-house as their only or principal home at the time of the service of the notice; and

• (b) no period during which the tenant's deceased spouse was a secure tenant or the spouse of a secure tenant shall be so taken into account unless the tenant became the secure tenant on the death of his spouse and at the time of the death both occupied the dwelling-house as their only or principal home; and

• (c) a period during which either the tenant or his spouse or deceased spouse was the spouse of a secure tenant shall be taken into account only if during that period the spouses occupied the same dwelling-house as their only or principal home; and

• (d) subsection (5)(b) above applies only if the secure tenant or, as the case may be, his spouse was a member of the regular armed forces of the Crown on or after 21st December 1979.

• (7) For the purposes of subsections (5) and (6) above a person who, as a joint tenant under a secure tenancy, occupied a dwelling-house as his only or principal home shall be treated as the secure tenant under that tenancy; and where the right to buy is exercised by joint tenants those subsections shall be construed as if for the secure tenant there were substituted that one of the joint tenants whose substitution will produce the largest discount.

• (8) Where the person or one of the persons exercising the right to buy, or the spouse or deceased spouse of that person or of any of those persons, is or was a previous purchaser, a period shall be taken into account as a period during which the previous purchaser was, or was the spouse of, a secure tenant or during which he or his spouse occupied accommodation provided for him or his spouse as a member of the regular armed forces of the Crown, only if it falls after the completion of the previous purchase or, if more than one, the last of them.

• (9) Subsections (5) to (8) above shall have effect as if—

• (a) the references to a secure tenancy included a tenancy which either was a secure tenancy within the meaning of the Tenants' Rights, Etc. (Scotland) Act 1980 or would have been such a tenancy if Part II of that Act had been in force and the bodies mentioned in section 10(2) of that Act had included the predecessor of any such body; and

• (b) the references to a secure tenant included the tenant under such a tenancy as is mentioned in paragraph (a) above, except when the landlord was a body specified in paragraph (e) or (g) of section 10(2) of the Act of 1980, and also included a tenant of the Northern Ireland Housing Executive or of a predecessor of that Executive.

• (10) In subsection (8) above " previous purchaser " and " previous purchase " have the same meaning as in section 1(6) above,

• (11) In this section " regular armed forces of the Crown " has the same meaning as in section 1 of the House of Commons Disqualification Act 1975.

Repayment of discount on early disposal of freehold or lease

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• (1) A conveyance of the freehold or grant of a lease in pursuance of this Chapter shall (unless there is no discount) contain a covenant binding on the secure tenant and his successors in title to pay to the landlord on demand the amount specified in subsection (2) below if, within a period of five years, there is a disposal falling within subsection (3) below; but if there is more than one such disposal, then only on the first of them.

• (2) The amount payable under the covenant is an amount equal to the discount to which the secure tenant was entitled, but reduced by 20 per cent, of that discount for each complete year which elapses after the conveyance or grant and before the disposal.

• (3) A disposal falls within this subsection if it is—

• (a) a further conveyance of the freehold or an assignment of the lease; or

• (b) the grant of a lease or sub-lease for a term of more than twenty-one years otherwise than at a rack rent;

whether the disposal is of the whole or part of the dwelling-house ; but a disposal in pursuance of an order under section 24 of the Matrimonial Causes Act 1973 or under section 2 of the Inheritance (Provision for Family and Dependants) Act 1975 or a vesting in a person taking under a will or on an intestacy is not a disposal falling within this subsection.

• (4) The liability that may arise under the covenant required by subsection (1) above shall be a charge on the dwelling-house—

• (a) taking effect as if it had been created by deed expressed to be by way of legal mortgage ; and

• (b) having priority immediately after any legal charge securing any amount left outstanding by the tenant in exercising the right to buy or advanced to him by a body specified in subsection (5) below for the purpose of enabling him to exercise it or further advanced to him by that body.

• (5) The bodies referred to in subsection (4)(b) above are—

• (a) the Housing Corporation;

• (b) any building society ; and

• (c) any of the bodies specified in paragraph 6, 7 or 8 of the Schedule to the Home Purchase Assistance and Housing Corporation Guarantee Act 1978.

• (6) A charge taking effect by virtue of subsection (4) above shall, notwithstanding subsection (5) of section 59 of the Land Registration Act 1925, be a land charge for the purposes of that section, and subsection (2) of that section shall apply accordingly with respect to its protection and realisation.

• (7) The reference in subsection (3) above to a lease or sublease does not include a mortgage term.

• (8) In this section " building society " means a building society within the meaning of the Building Societies Act 1962 or the Building Societies Act (Northern Ireland) 1967; and for the purposes of this section the grant of an option enabling a person to call for a disposal falling within subsection (3) above shall be treated as such a disposal.

Right to a mortgage-amount to be secured

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• (1) The amount which a secure tenant exercising the right to a mortgage is entitled to leave outstanding, or have advanced to him, on the security of the dwelling-house is, subject to the limit imposed by this section, the aggregate of—

• (a) the purchase price;

• (b) so much of the costs incurred by the landlord or the Housing Corporation as is chargeable to the tenant under section 21 ; and

• (c) any costs incurred by the tenant and defrayed on his behalf by the landlord or the Housing Corporation.

• (2) The amount mentioned in subsection (1) above is subject to the limit that it does not exceed the amount to be taken into account, in accordance with regulations under this section, as the tenant's available annual income multiplied by such factor as, under the regulations, is appropriate to it.

• (3) Where the right to a mortgage belongs to more than one person the limit is the aggregate of the amounts to be taken into account in accordance with the regulations as the available annual income of each of them, after multiplying each of those amounts by the factor appropriate to it under the regulations.

• (4) The Secretary of State may by regulations make provision for calculating the amount which is to be taken into account under this section as a person's available annual income and for specifying a factor appropriate to it; and the regulations —

• (a) may provide for arriving at a person's available annual income by deducting from the sums taken into account as his annual income sums related to his needs and commitments, and may exclude sums from those to be taken into account as a person's annual income; and

• (b) may (without prejudice to the generality of section 151(3) of this Act) specify different amounts and different factors for different circumstances.

• (5) Where the amount which a secure tenant is entitled to leave outstanding on the security of the dwelling-house is reduced by the limit imposed by this section, the landlord may, if it thinks fit and the tenant agrees, treat him as entitled to leave outstanding on that security such amount exceeding the limit but not exceeding the aggregate mentioned in subsection (1) above as the landlord may determine.

Notice of purchase price and right to a mortgage

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• (1) Where a secure tenant has claimed to exercise the right to buy and that right has been established (whether by the landlord's admission or otherwise) the landlord shall, as soon as practicable, serve on the tenant a notice describing the dwelling-house and stating—

• (a) the price at which, in the opinion of the landlord, the tenant is entitled to have the freehold conveyed or, as the case may be, the long lease granted to him; and

• (b) the provisions which, in the opinion of the landlord, should be contained in the conveyance or grant.

• (2) The notice shall, for the purpose of showing how the price has been arrived at, state—