Housing Act 1980

• (a) the interest of the landlord under an assured tenancy has ceased to belong to an approved body, for any reason other than that mentioned in subsection (1) above; and

• (b) but for this subsection the tenancy would thereby have become a housing association tenancy (within the meaning of section 86 of the 1977 Act) or a protected tenancy;

then so much of that period as does not exceed 3 months shall be disregarded in determining whether the condition in section 56(3)(a) above is satisfied in relation to that tenancy.

Application of Landlord and Tenant Act 1954

58

• (1) Part II of the Landlord and Tenant Act 1954 (renewal and continuation of tenancies) applies to assured tenancies as it applies to certain business and other tenancies by virtue of section 23 of that Act, but subject to the exceptions and modifications mentioned in Schedule 5 to this Act.

• (2) Part IV of that Act (miscellaneous and supplementary provisions) applies to assured tenancies subject to the exceptions and modifications mentioned in Schedule 5.

Rents

Rent officers and applications for registration of rent

59

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In section 67 of the 1977 Act (application for registration of rent) for subsection (2) there is substituted the following subsection—

(2) Any such application must be in the prescribed form and must— (a) specify the rent which it is sought to register ; (b) where the rent includes any sum payable by the tenant to the landlord for services and the application is made by the landlord, specify that sum and be accompanied by details of the expenditure incurred by the landlord in providing those services ; and (c) contain such other particulars as may be prescribed.

• (3) Schedule 6 to this Act has effect, in relation to applications made after the commencement of this subsection, for the purpose of amending the procedure provided for by the 1977 Act in relation to applications for the registration of rent.

Applications for new registered rents and phasing of increases

60

Effect of registration of rent etc.

61

• (1) For section 72 of the 1977 Act (effect of registration of rent) there is substituted the following section—

(72) (1) The registration of a rent for a dwelling-house takes effect— (a) if the rent is determined by the rent officer, from the date when it is registered, and (b) if the rent is determined by a rent assessment committee, from the date when the committee make their decision. (2) If the rent for the time being registered is confirmed, the confirmation takes effect— (a) if it is made by the rent officer, from the date when it is noted in the register, and (b) if it is made by a rent assessment committee, from the date when the committee make their decision. (3) If (by virtue of section 67(4) of this Act) an application for registration of a rent is made before the expiry of the period mentioned in section 67(3) and the resulting registration of a rent for the dwelling-house, or confirmation of the rent for the time being registered, would, but for this subsection, take effect before the expiry of that period it shall take effect on the expiry of that period. (4) The date from which the registration or confirmation of a rent takes effect shall be entered in the register. (5) As from the date on which the registration of a rent takes effect any previous registration of a rent for the dwelling-house ceases to have effect. (6) Where a valid notice of increase under any provision of Part III of this Act has been served on a tenant and, in consequence of the registration of a rent, part but not the whole of the increase specified in the notice becomes irrecoverable from the tenant, the registration shall not invalidate the notice, but the notice shall, as from the date from which the registration takes effect, have effect as if it specified such part only of the increase as has not become irrecoverable.

.

• (2) For subsections (4) to (6) of section 13 of the Rent (Agriculture) Act 1976 (efrect of registration of rent) there are substituted the following subsections—

(4) The registration of a rent in the said part of the register takes effect— (a) if the rent is determined by the rent officer, from the date when it is registered, and (b) if the rent is determined by a rent assessment committee, from the date when the committee make, their decision. (5) If the rent for the time being registered in the said part of the register is confirmed, the confirmation takes effect— (a) if it is made by the rent officer, from the date when it is noted in the register, and (b) if it is made by a rent assessment committee, from the date when the committee make their decision. (6) If (by virtue of section 67(4) of the Rent Act 1977, as applied by subsection (2) above) an application for registration of a rent is made before the expiry of the period mentioned in section 67(3) and the resulting registration of a rent for the dwelling-house, or confirmation of the rent for the time being registered, would, but for this subsection, take effect before the expiry of that period it shall take effect on the expiry of that period. (6A) The date from which the registration or confirmation of a rent takes effect shall be entered in the said part of the register. (6B) As from the date on which the registration of a rent takes effect any previous registration of a rent for the dwelling-house ceases to have effect.

• (3) In Part VI of the 1977 Act (rent limit for dwellings let by housing associations, housing trusts and the Housing Corporation)

• (a) in section 87 (registration of rent), in subsection (2)(a) for the words “and 70” there are substituted the words “70 and 72” and subsections (3) to (5) are hereby repealed ; and

• (b) subsections (1) and (2) of section 96 (effect of determination by rent assessment committee) are hereby repealed.

• (4) In section 45 of the 1977 Act (limit of rent during statutory periods) in subsection (3) for the words “on which the rent was registered” there are substituted the words “from which the registration of the rent took effect”.

• (5) In section 67 of the 1977 Act, for subsection (5) (meaning of “relevant date” in relation to applications for registration of rent) there is substituted the following subsection—

(5) In this section and sections 68 and 69 of this Act “relevant date”, in relation to a rent which has been registered under this Part of this Act, means the date from which the registration took effect or, in the case of a registered rent which has been confirmed, the date from which the confirmation (or, where there have been two or more successive confirmations, the last of them) took effect.

.

• (6) In Schedule 6 to the Rent (Agriculture) Act 1976 and in Schedule 8 to the 1977 Act (phasing of rent increases)—

• (a) in paragraph 1(1)—

• (i) in the definition of “period of delay” for the words from “means” to the end there are substituted the words

means— (a) if the registered rent has been confirmed by a rent assessment committee, a period beginning with the date from which the registration of the rent took effect and ending one year after the date on which the committee took their decision; and (b) in any other case, a period of one year beginning with the date from which the registration took effect.

.

• (ii) in the definition of “previous rent limit” for the words “at the date of registration” there are substituted the words “immediately before the relevant date” ; and

• (iii) before the definition of “service element” there is inserted the following definition—

“relevant date” means, in relation to a registered rent—

• (a) if the rent was determined by the rent officer (and whether or not it was confirmed by a rent assessment committee), the date on which the rent was registered by the rent officer; and

• (b) if the rent was determined by a rent assessment committee, the date on which the rent officer registered the rent determined by him or, as the case may be, noted in the register his confirmation of the rent for the time being registered.;

• (b) for paragraph 4 there is substituted the following paragraph—

(4) Where the registration of a rent takes effect in a period of delay which began by reference to an earlier registration, then— (a) from the date on which the later registration takes effect the limitation under that period of delay shall cease to apply; and (b) a fresh period of delay shall begin by reference to the later registration

; and

• (c) paragraphs 7 (in Schedule 6) and 8 (in Schedule 8) are hereby repealed.

• (7) In Schedule 11 to the 1977 Act (procedure on application for registration of rent), in paragraph 9(2) for the word “accordingly” there are substituted the words “of their decision and of the date on which it was made”.

• (8) Subsections (1) to (5) above do not apply in any case where, on the determination or confirmation of a rent by the rent officer, the rent determined by him is registered, or his confirmation is noted in the register, before the commencement of this section.

Cancellation of registration of rent

62

• (1) Section 73 of the 1977 Act is amended as follows.

• (2) After subsection (1) there is inserted the following subsection: —

(1A) Such an application may also be made where— (a) not less than two years have elapsed since the relevant date (as defined in section 67(5) of this Act); and (b) the dwelling-house is not for the time being subject to a regulated tenancy; and (c) the application is made by the person who would be the landlord if the dwelling-house were let on such a tenancy.

• (3) For subsection (3) there is substituted the following subsection—

(3) An application under this section must— (a) be in the form prescribed for the application concerned and contain the prescribed particulars; and (b) be accompanied, in the case of an application under subsection (1) above, by a copy of the rent agreement.

.

• (4) In subsection (4)—

• (a) after the word “If” there are inserted the words “the application is made under subsection (1) above and”; and

• (b) at the end there are inserted the words “and he shall also cancel the registration if the application is made under subsection (1A) above”.

• (5) In subsection (5) after the word “Where” there are inserted the words “the application is made under subsection (1) above and”.

• (6) In subsection (6) for the words “The cancellation” there are substituted the words “A cancellation made in pursuance of an application under subsection (1) above”.

Repeal of sections 48 and 50 of Rent Act 1977

63

Section 48 of the 1977 Act (increase, on account of improvements, of recoverable rent for statutory periods before registration) and section 50 of that Act (private street works to count as improvements) are hereby repealed.

Conversion of controlled tenancies

Conversion of controlled tenancies into regulated tenancies

64

• (1) At the commencement of this section every controlled tenancy shall cease to be a controlled tenancy and become a regulated tenancy, except in the case mentioned in subsection (2) below.

• (2) If the controlled tenancy is one to which Part II of the Landlord and Tenant Act 1954 would apply, apart from section 24(2) of the 1977 Act, or would so apply if it were a tenancy within the meaning of the Act of 1954, it shall, when it ceases to be a controlled tenancy, be treated as a tenancy continuing by virtue of section 24 of the Act of 1954 after the expiry of a term of years certain.

Regulated tenancies

Resident landlords

65

• (1) In section 12(1) of the 1977 Act (certain tenancies granted by resident landlords not to be protected tenancies) for paragraphs (a) to (c) there are substituted the following paragraphs—

(a) the dwelling-house forms part only of a building and, except in a case where the dwelling-house also forms part of a flat, the building is not a purpose-built block of flats; and (b) the tenancy was granted by a person who, at the time when he granted it, occupied as his residence another dwelling-house which— (i) in the case mentioned in paragraph (a) above, also forms part of the flat; or (ii) in any other case, also forms part of the building; and (c) subject to paragraph 1 of Schedule 2 to this Act, at all times since the tenancy was granted the interest of the landlord under the tenancy has belonged to a person who, at the time he owned that interest, occupied as his residence another dwelling-house which— (i) in the case mentioned in paragraph (a) above, also formed part of the flat; or (ii) in any other case, also formed part of the building.

• (2) Schedule 2 to the 1977 Act (provisions for determining application of section 12) is amended as follows.

• (3) In paragraph 1—

• (a) in sub-paragraph (a) for the words “14 days” there are substituted the words “28 days” and after the the word “building” there are inserted the words “or, as the case may be, flat”;

• (b) in sub-paragraph (b) for the words “such dwelling-house as is referred to in that paragraph” there are substituted the words “dwelling-house in the building or, as the case may be, flat concerned”; and

• (c) in sub-paragraph (c) for the words “12 months” there are substituted the words “2 years” and paragraph (i) is hereby repealed.

• (4) In paragraph 2(b) after the word “ building” there are inserted the words “or, as the case may be, flat”.

• (5) After paragraph 2 there is inserted the following paragraph—

(2A) (1) The tenancy referred to in section 12(1) falls within this paragraph if the interest of the landlord under the tenancy becomes vested in the personal representatives of a deceased person acting in that capacity. (2) If the tenancy falls within this paragraph, the condition in section 12(1)(c) shall be deemed to be fulfilled for any period, beginning with the date on which the interest becomes vested in the personal representatives and not exceeding two years, during which the interest of the landlord remains so vested.

• (6) Subject to subsection (7) below, this section, except subsection (1), applies to tenancies granted before as well as those granted after the commencement of this section.

• (7) In any case where the interest of the landlord under a tenancy vested in the personal representatives (acting in that capacity) of a person who died before the commencement of this section, Schedule 2 to the 1977 Act applies as if paragraph 2A had not been inserted and paragraph 1(c)(i) had not been repealed.

Amendment of Cases 11 and 12 of Schedule 15 to Rent Act 1977

66

• (1) In Case 11 in Schedule 15 to the 1977 Act (dwelling-house required by a person who was owner occupier at time of letting) for paragraph (c) there is substituted the following paragraph—

(c) the court is of the opinion that of the conditions set out in Part V of this Schedule one of those in paragraphs (a) and (c) to (f) is satisfied.

• (2) In Case 12 in Schedule 15 (dwelling-house required for use by owner on his retirement) for paragraph (c) there is substituted the following paragraph—

(c) the court is of the opinion that of the conditions set out in Part V of this Schedule one of those in paragraphs (b) to (e) is satisfied.

• (3) There are inserted in Schedule 15, as a new Part V, the provisions set out in Schedule 7 to this Act; and in section 98 of the 1977 Act (which, among other things, introduces Schedule 15) there is added, at the end, the following subsection—

(5) Part V of Schedule 15 shall have effect for the purpose of setting out conditions which are relevant to Cases 11 and 12 of that Schedule.

• (4) In Case 12 for the words from the beginning to “employment let” there are substituted the words “Where the landlord (in this Case referred to as “the owner”) intends to occupy the dwelling-house as his residence at such time as he might retire from regular employment and has let”.

• (5) Subject to subsection (6) below, Cases 11 and 12, as amended by this section, apply to tenancies granted before, as well as those granted after, the commencement of this section; and nothing in this section invalidates a notice that possession might be recovered under Case 11 or Case 12 which was duly given to a tenant before then.

• (6) Paragraphs (c) and (d) of Part V of Schedule 15 do not apply to Case 11 if the tenancy was granted, and the owner died, before the commencement of this section; and paragraph (d) does not apply to Case 12 in any such case.

Lettings by servicemen

67

The following Case shall be added to the Cases in Part II of Schedule 15 to the 1977 Act (mandatory orders for possession) after the Case inserted in Part II by section 55 of this Act—

Where the dwelling-house was let by a person (in this Case referred to as “the owner”) at any time after the commencement of section 67 of the Housing Act 1980 and— (a) at the time when the owner acquired the dwelling-house he was a member of the regular armed forces of the Crown; (b) at the relevant date the owner was a member of the regular armed forces of the Crown; (c) not later than the relevant date the owner gave notice in writing to the tenant that possession might be recovered under this Case; (d) the dwelling-house has not, since the commencement of section 67 of the Act of 1980 been let by the owner on a protected tenancy with respect to which the condition mentioned in paragraph (c) above was not satisfied; and (e) the court is of the opinion that— (i) the dwelling-house is required as a residence for the owner; or (ii) of the conditions set out in Part V of this Schedule one of those in paragraphs (c) to (f) is satisfied. If the court is of the opinion that, notwithstanding that the condition in paragraph (c) or (d) above is not complied with, it is just and equitable to make an order for possesion of the dwelling-house, the court may dispense with the requirements of either or both of these paragraphs, as the case may require. For the purposes of this Case “regular armed forces of the Crown” has the same meaning as in section 1 of the House of Commons Disqualification Act 1975.

Rent agreements

Rent agreements with tenants having security of tenure

68

• (1) In section 51(4) of the 1977 Act (requirements to be observed in rent agreements with tenants having security of tenure), in paragraph (b) the following sub-paragraph is inserted after sub-paragraph (i)—

(ia) that if the agreement were not made but instead a rent were registered under Part IV of this Act, then part only of any increase over the rent previously recoverable by the landlord would be payable by the tenant during the first year; and

• (2) For section 52 of the 1977 Act (which makes special provision, in the case of converted tenancies, in relation to rent agreements with tenants having security of tenure) there is substituted the following section—

(52) (1) This section applies to an agreement with a tenant having security of tenure which is entered into after the commencement of section 68(2) of the Housing Act 1980 if the tenancy has become or, as the case may be, the previous tenancy became a regulated tenancy by conversion. (2) Any such agreement which purports to increase the rent payable under a protected tenancy shall, if entered into at a time when no rent is registered for the dwelling-house under Part IV of this Act, be void. (3) If any such agreement constitutes a grant of a regulated tenancy and is made at a time when no rent is so regitered, any excess of the rent payable under the tenancy so granted (for any contractual or statutory period of the tenancy) over the rent limit applicable to the previous tenancy, shall be irrecoverable from the tenant ; but this subsection ceases to apply if a rent is subsequently so registered. (4) For the purposes of this section a tenancy is a regulated tenancy by conversion if it has become a regulated tenancy by virtue of— (a) Part VIII of this Act, section 43 of the Housing Act 1969 or Part III or IV of the Housing Finance Act 1972 (conversion of controlled tenancies into regulated tenancies); or (b) section 18(3) of this Act or paragraph 5 of Schedule 2 to the Rent Act 1968 (conversion on death of first successor); or (c) section 64 of the Housing Act 1980 (conversion of all remaining controlled tenancies). (5) This section does not apply to any to any agreement where the tenant is neither the person who, at the time of the conversion, was the tenant nor a person who might succeed the tenant at that time as a statutory tenant. (6) Where a rent is registered for the dwelling-house and the registration is subsequently cancelled, this section shall not apply to the agreement submitted to the rent officer in connection with the cancellation nor to any agreement made so as to take effect after the cancellation.

• (3) In section 57 of the 1977 Act (recovery from landlord of sums paid in excess of recoverable rent, etc.) for subsection (3) there is substituted the following subsection—

(3) No amount which a tenant is entitled to recover under subsection (1) above shall be recoverable at any time after the expiry of— (a) one year, in the case of an amount which is irrecoverable by virtue of section 54 of this Act; or (b) two years, in any other case.

Restricted contracts

Restricted contracts: security of tenure

69

• (1) In section 3 of the Protection from Eviction Act 1977 (prohibition of eviction without due process of law), after subsection (2) there is inserted the following subsection—

(2A) Subsections (1) and (2) above apply in relation to any restricted contract (within the meaning of the Rent Act 1977) which— (a) creates a licence; and (b) is entered into after the commencement of section 69 of the Housing Act 1980; as they apply in relation to a restricted contract which creates a tenancy.

• (2) After section 106 of the 1977 Act there is inserted the following section:—

(106A) (1) This section applies to any dwelling house which is the subject of a restricted contract entered into after the commencement of section 69 of the Housing Act 1980. (2) On the making of an order for possession of such a dwelling-house, or at any time the execution of such an order, the court may— (a) stay or suspend execution of the order, or (b) postpone the date of possession, for such period or periods as, subject to subsection (3) below, the court thinks fit. (3) Where a court makes an order for possession of such a dwelling-house, the giving up of possession shall not be postponed (whether by the order or any variation, suspension or stay of execution) to a date later than 3 months after the making of the order. (4) On any such stay, suspension or postponement as is referred to in subsection (2) above, the court shall, unless it considers that to do so would cause exceptional hardship to the lessee or would otherwise be unreasonable, impose conditions with regard to payment by the lessee of arrears of rent (if any) and rent or payments in respect of occupation after termination of the tenancy (mesne profits) and may impose such other conditions as it thinks fit. (5) Subsection (6) below applies in any case where— (a) proceedings are brought for possession of such a dwelling-house; (b) the lessee’s spouse or former spouse, having rights of occupation under the Matrimonial Homes Act 1967, is the in occupation of the dwelling-house; and (c) the restricted contract is terminated as a result of those proceedings. (6) In any case to which this subsection applies, the spouse or former spouse shall, so long as he or she remains in occupation, have the same rights in relation to, or in connection with, any such stay, suspension or postponement as is referred to in subsection (2) above, as he or she would have if those rights of occupation were not affected by the termination of the restricted contract.

• (3) Sections 103 to 106 of the 1977 Act (security of tenure in respect of restricted contracts) shall not apply to restricted contracts entered into after the commencement of this section; and accordingly after section 102 of that Act there is inserted the following section—

(102A) Sections 103 to 106 of this Act apply only to restricted contracts entered into before the commencement of section 69 of the Housing Act 1980.

.

• (4) In section 12 of the 1977 Act, for subsections (2) and (3) (cases where tenancies granted by resident landlords are not exempted by section 12 from being protected tenancies), there is substituted the following subsection—

(2) This section does not apply to a tenancy of a dwelling-house which forms part of a building if the tenancy is granted to a person who, immediately before it was granted, was a protected or statutory tenant of that dwelling-house or of any other dwelling-house in that building.

Reconsideration of registered rents under Part V of Rent Act 1977

70

• (1) In section 80(2) of the 1977 Act (which in certain circumstances prevents an application for a new registered rent for a dwelling-house which is the subect of a restricted contract from being made within 3 years of the date of an existing registration), for the words “3 years” there are substituted the words “2 years”.

• (2) This section does not apply in any case where the date from which the period during which no application for registration can be made is to be calculated falls before the commencement of this section.

Cancellation of rents registered under Part V of Rent Act 1977

71

• (1) After section 81 of the 1977 Act (effect of registration of rent under section 79) there is inserted the following section—

(81A) (1) Where the rent payable for any dwelling is entered in the register under section 79 of this Act, the rent tribunal shall cancel the entry, on an application made under this section, if— (a) not less than two years have elapsed since the date of entry; (b) the dwelling is not for the time being subject to a restricted contract; and (c) the application is made by the person who would be the lessor if the dwelling were subject to a restricted contract. (2) An application under this section must be in the prescribed form, and contain the prescribed particulars. (3) Cancellation of the registration shall be without prejudice to a further registration of a rent at any time after the cancellation. (4) The rent tribunal shall notify the applicant of their decision to grant, or to refuse, any application under this section.

• (2) In Schedule 10 to the 1977 Act (rent assessment committees), in paragraph 5 for the words “paragraph 6” there are substituted the words “paragraphs 6 and 6A” and after paragraph 6 there is inserted the following paragraph—

(6A) When dealing with an application under section 81A of this Act a rent assessment committee carrying out the functions of a rent tribunal shall consist of the chairman of the committee sitting alone.

Functions of rent tribunals

72

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous

Dwellings forming part of Crown Estate or belonging to Duchies

73

• (1) The following section is substituted for section 13 of the 1977 Act:

(13) (1) Except as provided by subsection (2) below— (a) a tenancy shall not be a protected tenancy at any time when the interest of the landlord under the tenancy belongs to Her Majesty in right of the Crown or to a government department or is held in trust for Her Majesty for the purposes of a government department ; and (b) a person shall not at any time be a statutory tenant of a dwelling-house if the interest of his immediate lanlord would at that time belong or be held as mentioned in paragraph (a) above. (2) An interest belonging to Her Majesty in right of the Crown shall not prevent a tenancy from being a protected tenancy or a person from being a statutory tenant if the interest is under the management of the Crown Estate Commissioners.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) In section 5 of the Rent (Agriculture) Act 1976 the following is substituted for subsection (1):

(1) A person shall not at any time be a statutory tenant of a dwelling-house if the interest of his immediate landlord would, at that time— (a) belong to Her Majesty in right of the Crown or to a government department, or (b) be held in trust for Her Majesty for the purposes of a government department ; except that an interest belonging to Her Majesty in right of the Crown shall not prevent a person from being a statutory tenant if the interest is under the management of the Crown Estate Commissioners.

• (4) In the Landlord and Tenant Act 1954—

• (a) the following is inserted at the end of section 56 :

(7) Part I of this Act shall apply where— (a) there is an interest belonging to Her Majesty in right of the Crown and that interest is under the management of the Crown Estate Commissioners ; or (b) there is an interest belonging to Her Majesty in right of the Duchy of Lancaster or belonging to the Duchy of Cornwall ; as if it were an interest not so belonging.

;

• (b) in section 21(6) the following is substituted for the definition of “ interest not bound by this Part of this Act” :

In this subsection “interest not bound by this Part of this Act” means an interest which belongs to Her Majesty in right of the Crown and is not under the management of the Crown Estate Commissioners or an interest belonging to a government department or held on behalf of Her Majesty for the purposes of a government department.

• (5) Schedule 8 to this Act has effect for making certain provisions consequential on this section.

Housing association and housing trust tenancies under Rent Act 1977

74

• (1) In section 15 of the 1977 Act (tenancies not protected when landlord’s interest belongs to housing association or housing trust etc.) subsection (4), and in subsection (1) the words “ in respect of which any of the conditions specified in subsection (4) below is fulfilled”, are hereby repealed.

• (2) For subsection (5) of section 15 there is substituted the following subsection—

(5) In subsection (2) above “ housing trust” means a corporation or body of persons which— (a) is required by the terms of its constituent instrument to use the whole of its funds, including any surplus which may arise from its operations, for the purpose of providing housing accommodation ; or (b) is required by the terms of its constituent instrument to devote the whole, or substantially the whole, of its funds to charitable purposes and in fact uses the whole, or substantially the whole, of its funds for the purpose of providing housing accommodation.

.

• (3) Schedule 9 to this Act has effect for the purpose of supplementing this section.

Proceedings for possession of certain dwelling-houses

75

• (1) Section 100 of the 1977 Act (which gives the court an extended discretion in actions for possession of certain dwelling-houses) is amended as follows.

• (2) For subsection (3) there is substituted the following subsection—

(3) On any such adjournment as is referred to in subsection (1) above or any such stay, suspension or postponement as is referred to in subsection (2) above, the court shall, unless it considers that to do so would cause exceptional hardship to the tenant or would otherwise be unreasonable, impose conditions with regard to payment by the tenant of arrears of rent (if any) and rent or payments in respect of occupation after termination of the tenancy (mesne profits) and may impose such other conditions as it thinks fit.

• (3) After subsection (4) there are inserted the following subsections—

(4A) Subsection (4B) below applies in any case where— (a) proceedings are brought for possession of a dwelling-house which is let on a protected tenancy or subject to a statutory tenancy ; (b) the tenant’s spouse or former spouse, having rights of occupation under the Matrimonial Homes Act 1967, is then in occupation of the dwelling-house ; and (c) the tenancy is terminated as a result of those proceedings. (4B) In any case to which this subsection applies, the spouse or former spouse shall, so long as he or she remains in occupation, have the same rights in relation to, or in connection with, any such adjournment as is referred to in subsection (1) above or any such stay, suspension or postponement as is referred to in subsection (2) above, as he or she would have if those rights of occupation were not affected by the termination of the tenancy.

• (4) Section 7 of the Rent (Agriculture) Act 1976 (which corresponds to section 100 of the 1977 Act) is amended as follows.

• (5) After subsection (2) there is inserted the following subsection—

(2A) In those cases the court may adjourn for such period or periods as it thinks fit.

• (6) For subsection (4) there is substituted the following subsection—

(4) On any such adjournment as is referred to in subsection (2A) above or any such stay, suspension or postponement as is referred to in subsection (3) above, the court shall, unless it considers that to do so would cause exceptional hardship to the tenant or would otherwise be unreasonable, impose conditions with regard to payment by the tenant of arrears of rent (if any) and rent or payments in respect of occupation after termination of the tenancy (mesne profits) and may impose such other conditions as it thinks fit.

.

• (7) After subsection (5) there are inserted the following subsections—

(5A) Subsection (5B) below applies in any case where— (a) proceedings are brought for possession of a dwelling-house which is subject to a protected occupancy or statutory tenancy ; (b) the tenant’s spouse or former spouse, having rights of occupation undr the Matrimonial Homes Act 1967, is then in occupation of the dwelling-house ; and (c) the tenancy is terminated as a result of those proceedings. (5B) In any case to which this subsection applies, the spouse or former spouse shall, so long as he or she remains in occupation, have the same rights in relation to or in connection with any such adjournment as is referred to in subsection (2A) above or any such stay, suspension or postponement as is referred to in subsection (3) above as he or she would have if those rights of occupation were not affected by the termination of the tenancy.

Statutory tenancies by succession

76

• (1) In Schedule 1 to the 1977 Act, for paragraph 2 (under which on the death of the original tenant under a protected or statutory tenancy his widow if residing with him at his death becomes a statutory tenant by succession) there is substituted the following paragraph—

(2) The surviving spouse (if any) of the original tenant, if residing in the dwelling-house immediately before the death of the original tenant, shall after the death be the statutory tenant if and so long as he or she occupies the dwelling-house as his or her residence.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) In sections 3(3)(a) and 4(4)(a) of the Rent (Agriculture) Act 1976 (which correspond to provisions in Schedule 1 to the 1977 Act) for the words “ with him at his death” there shall be substituted in each case the words “ in the dwelling-house immediately befor his death”.

• (4) The amendments made by this section have effect only in relation to deaths occurring after the commencement of the subsection concerned.

Amendment of Part VI of Rent Act 1977

77

Part VI of the 1977 Act (rent limit for dwellings let by housing associations, housing trusts and the Housing Corporation) is amended in accordance with the provisions of Schedule 10 to this Act.

Allowable premiums in relation to certain long tenancies

78

• (1) Section 127 of the 1977 Act shall have effect and be deemed always to have had effect as if for paragraph (c) of subsection (2) there were substituted the paragraph set out in subsection (2) below and at the end of subsection (5) there were added the words set out in subsection (3) below.

• (2) The substituted paragraph is—

(c) that the terms of the tenancy do not inhibit both the assignment and the underletting of the whole of the premises comprised in the tenancy.

• (3) The added words are “ and for the purposes of subsections (2)(c) and (3B)(d) above the terms of a tenancy inhibit an assignment or underletting if they—”

• (a) preclude it ; or

• (b) permit it subject to a consent but exclude section 144 of the Law of Property Act 1925 (no payment in nature of fine) ; or

• (c) permit it subject to a consent but require in connection with a request for consent the making of an offer to surrender the tenancy.

• (4) After subsection (3) of section 127 there are inserted the following subsections—

(3A) If the conditions in subsection (3B) below are satisfied in respect of a tenancy, this Part of this Act shall not apply to that tenancy and, together with Part VII of the Rent Act 1968 and the enactments replaced by Part VII, shall be deemed never to have applied to it. (3B) The conditions are that— (a) the tenancy was granted before 16th July 1980 ; (b) a premium was lawfully required and paid on the grant of the tenancy ; (c) the tenancy was, at the time when it was granted, a tenancy at a low rent ; and (d) the terms of the tenancy do not inhibit both the assignment and the underletting of the whole of the premises comprised in the tenancy. (3C) If the conditions in subsection (3D) below are satisfied in respect of a tenancy, this section shall have effect, in relation to that tenancy, as if for the words “ 20 years” and “ 21 years”, in subsections (2)(b) and (3) above there were substituted, respectively, the words “ 6 years” and “ 7 years”. (3D) The conditions are that— (a) the tenancy is granted after 15th July 1980 ; (b) at the time when it is granted it is a tenancy at a low rent ; and (c) the terms of the tenancy ensure that any variation of the sums payable by the tenant otherwise than in respect of rates, services, repairs or maintenance, cannot lead to those sums exceeding an annual rate of two-thirds of the rateable value of the dwelling-house at the date when the variation is made. For the purposes of this subsection the rateable value of a dwelling-house shall be ascertained in accordance with section 25 of this Act (disregarding subsection (4)) by reference to the value shown in the valuation list at the date when the variation is made.

Meaning of " premium " in Part IX of Rent Act 1977

79

In section 128 of the 1977 Act (interpretation of Part IX, which prohibits premiums etc.) for the definition of “ premium”, in subsection (1), there is substituted the following definition—

“premium” includes— (a) any fine or other like sum ; (b) any other pecuniary consideration in addition to rent ; and (c) any sum paid by way of a deposit, other than one which does not exceed one-sixth of the annual rent and is reasonable in relation to the potential liability in respect of which it is paid.

Part III — Tenant’s Repairs and Improvements

Repairing obligations in short leases

80

Tenant's improvements

81

• (1) The following provisions of this section have effect with respect to protected tenancies and statutory tenancies in place of section 19(2) of the Landlord and Tenancy Act 1927.

• (2) It is by virtue of this section a term of every such tenancy that the tenant will not make any improvement without the written consent of the landlord.

• (3) The consent required by virtue of subsection (2) above is not to be unreasonably withheld and, if unreasonably withheld, shall be treated as given.

• (4) Subsections (1) to (3) above do not apply in any case where the tenant has been given a notice—

• (a) of a kind mentioned in one of Cases 11 to 18 and 20 in Schedule 15 to the 1977 Act (notice that possession might be recovered under that Case); or

• (b) under section 52(1)(b) of this Act (notice that a tenancy is to be a protected shorthold tenancy);

unless the tenant proves that, at the time when the landlord gave the notice, it was unreasonable for the landlord to expect to be able in due course to recover possession of the dwelling-house under that Case or, as the case may be, Case 19 of Schedule 15 (added by section 55 of this Act).

• (5) In Part I, and in this Part, of this Act “improvement” means any alteration in, or addition to, a dwelling-house and includes—

• (a) any addition to, or alteration in, landlord’s fixtures and fittings and any addition or alteration connected with the provision of any services to a dwelling-house;

• (b) the erection of any wireless or television aerial; and

• (c) the carrying out of external decoration;

but paragraph (c) above does not apply in relation to a protected or statutory tenancy if the landlord is under an obligation to carry out external decoration or to keep the exterior of the dwelling-house in repair.

Provisions as to consents required by section 81

82

• (1) If any question arises whether the withholding of a consent required by virtue of section 81 above was unreasonable it is for the landlord to show that it was not; and in determining that question the court shall, in particular, have regard to the extent to which the improvement would be likely—

• (a) to make the dwelling-house, or any other premises, less safe for occupiers;

• (b) to cause the landlord to incur the expenditure which it would be unlikely to incur if the improvement were not made; or

• (c) to reduce the price which the dwelling-house would fetch if sold on the open market or the rent which the landlord would be able to charge on letting the dwelling-house.

• (2) A consent required by virtue of section 81 may be validly given notwithstanding that it follows, instead of preceding, the action requiring it and may be given subject to a condition.

• (3) Where the tenant has applied in writing for a consent which is required by virtue of section 81 then—

• (a) if the landlord refuses to give the consent it shall give to the tenant a written statement of the reasons why the consent was refused; and

• (b) if the landlord neither gives nor refuses to give the consent within a reasonable time, the consent shall be taken to have been withheld, and if the landlord gives the consent but subject to an unreasonable condition, the consent shall be taken to have been unreasonably withheld.

• (4) If any question arises whether a condition attached to a consent was reasonable, it is for the landlord to show that it was.

Conditional consent to tenant's improvements

83

Any failure by a protected tenant or a statutory tenant to satisfy any reasonable condition imposed by his landlord in giving consent to an improvement which the tenant proposes to make, or has made, shall be treated for the purposes of the 1977 Act as a breach by the tenant of an obligation of his tenancy or, as the case may be, of an obligation of the previous protected tenancy which is applicable to the statutory tenancy.

Exclusion of certain housing associations from Part III

84

This Part of this Act does not apply in relation to a housing association which falls within paragraph (d) of section 15(3) of the 1977 Act (certain societies registered under the Industrial and Provident Societies Act 1965).

Interpretation and application of Part III

85

• (1) In this Part of this Act any expression used in the 1977 Act has the same meaning as in that Act.

• (2) This Part of this Act applies to tenancies granted before as well as tenancies granted after the commencement of this Part of this Act.

Part IV — Jurisdiction and Procedure

Jurisdiction of county court and rules of procedure

86

• (1) The county court has jurisdiction to determine any question arising under Part III of this Act (tenant’s improvements) and to entertain any proceedings brought thereunder.

• (2) The jurisdiction conferred by this section includes jurisdiction to entertain proceedings on any question whether any consent required by section 81 was withheld or unreasonably withheld, notwithstanding that no other relief is sought than a declaration.

• (3) If a person takes proceedings in the High Court which, by virtue of this section, he could have taken in the county court he is not entitled to recover any costs.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Extended discretion of court in certain proceedings for possession

87

Discretion of court in certain proceedings for possession

88

• (1) Where, under the terms of a rental purchase agreement, a person has been let into possession of a dwelling-house and, on the termination of the agreement or of his right to possession under it, proceedings are brought for the possession of the dwelling-house, the court may—

• (a) adjourn the proceedings; or

• (b) on making an order for the possession of the dwelling-house, stay or suspend execution of the order or postpone the date of possession;

for such period or periods as the court thinks fit.

• (2) On any such adjournment, stay, suspension or postponement the court may impose such conditions with regard to payments by the person in possession in respect of his continued occupation of the dwelling-house and such other conditions as the court thinks fit.

• (3) The court may revoke or from time to time vary any condition imposed by virtue of this section.

• (4) In this section “rental purchase agreement” means an agreement for the purchase of a dwelling-house (whether freehold or leasehold property) under which the whole or part of the purchase price is to be paid in three or more instalments and the completion of the purchase is deferred until the whole or a specified part of the purchase price has been paid.

• (5) This section extends to proceedings for the possession of a dwelling-house which were begun before the commencement of this section unless an order for the possession of the dwelling-house was made in the proceedings and executed before the commencement of this section.

Restriction on discretion of court in making orders for possession of land

89

• (1) Where a court makes an order for the possession of any land in a case not falling within the exceptions mentioned in subsection (2) below, the giving up of possession shall not be postponed (whether by the order or any variation, suspension or stay of execution) to a date later than fourteen days after the making of the order, unless it appears to the court that exceptional hardship would be caused by requiring possession to be given up by that date; and shall not in any event be postponed to a date later than six weeks after the making of the order.

• (2) The restrictions in subsection (1) above do not apply if—

• (a) the order is made in an action by a mortgagee for possession; or

• (b) the order is made in an action for forfeiture of a lease; or

• (c) the court had power to make the order only if it considered it reasonable to make it; or

• (d) the order relates to a dwelling-house which is the subject of a restricted contract (within the meaning of section 19 of the 1977 Act); or

• (e) the order is made in proceedings brought as mentioned in section 88(1) above.

PART V — Amendment of Part V of Housing Act 1957

Review of housing conditions by local authorities

90

Power of local authorities to dispose of land held for purposes of Part V of Housing Act 1957

91

• (1) For section 104 of the 1957 Act (power to dispose of property acquired or appropriated for purposes of Part V) there is substituted the following section—

(104) (1) Without prejudice to the provisions of Chapter I of Part I of the Housing Act 1980 (right to buy public sector houses), a local authority shall have power by this section, but not otherwise, to dispose of any land which they have acquired or appropriated for the purposes of this Part of this Act. (2) A disposal under this section may be effected in any manner but is not to be made without the consent of the Minister, except in a case falling within subsection (3) below. (3) No consent is required for the letting of any land under a secure tenancy (within the meaning of section 28 of the Act of 1980) or under what would be a secure tenancy but for any of paragraphs 2 to 13 of Schedule 3 to that Act (certain lettings which do not create secure tenancies). (4) On the disposal of any house under this section by way of sale or by the grant or assignment of a lease at a premium the local authority may, if they think fit, agree to the price or premium, or any part thereof, and any expenses incurred by the purchaser being secured by a mortgage of the premises. (5) Subject to section 104A of this Act, on any disposal under this section the local authority may impose such covenants and conditions as they think fit, but a condition of any of the kinds mentioned in subsection (6) below may only be imposed with the consent of the Minister. (6) The conditions are— (a) one limiting the price or premium which may be obtained on a further disposal of the house; (b) in the case of a sale, one precluding the purchaser (including any successor in title of his and any person deriving title under him or any such successor) from selling or leasing the land unless— (i) he first notifies the authority of the proposed sale or lease and offers to sell or lease the house to them; and (ii) the authority refuse the offer or fail to accept it within one month after it is made; and (c) in the case of a lease, one precluding the lessee (including any successor in title of his and any person deriving title under him or any such successor) from assigning the lease, or granting any sub-lease. (7) Section 26(1) of the Town and Country Planning Act 1959 (power of local authorities etc. to dispose of land without consent of Minister) does not apply to any disposal under this section. (8) Sections 128 to 132 of the Lands Clauses Consolidation Act 1845 (which relate to the sale of superfluous land) do not apply to the sale by a local authority, under this section, of any land acquired by the authority for the purposes of this Part of this Act. (9) For the purposes of this section the grant of an option to purchase the freehold of, or any other interest in, any land is a disposal and any consent given to such a disposal extends to any disposal made in pursuance of the option.

.

• (2) Sections 105 (1), (2) and (5) (power to deal with land in addition to that given by section 104), and 106 (power of Minister to impose conditions on sale of houses and land), of the 1957 Act are hereby repealed.

• (3) Section 39 of the Town and Country Planning Act 1968 (cases where section 26(1) of the Town and Country Planning Act 1959 does not apply) is hereby repealed.

• (4) In section 104 and in the sections inserted in the 1957 Act by sections 92 and 95 below " the Minister " means the Secretary of State.

Consent to disposals and recovery of discount

92

After section 104 of the 1957 Act there are inserted the following sections—

(104A) (1) Any consent of the Minister required under section 104(2) or (5) of this Act may be given either generally to all local authorities or to any particular local authority or description of authority and either in relation to any particular land or description of land. (2) Any such consent may be given subject to such conditions as the Minister sees fit to impose. (3) Without prejudice to the generality of subsection (2) above, any such consent may be given subject to conditions as to the price, premium or rent to be obtained on a disposal under section 104. including conditions as to the amount by which, on the disposal of a house by way of sale or by the grant or assignment of a lease at a premium, the price or premium is to be, or may be, discounted by the local authority. (104B) (1) This section applies where, on a disposal under section 104 of this Act (the "first disposal "), a discount has been given to the purchaser by the local authority in accordance with a consent given by the Minister under subsection (2) of that section; but this section does not apply in any such case if the consent so provides. (2) On the first disposal, the conveyance, grant or assignment shall contain a covenant binding on the purchaser and his successors in title to pay to the local authority on demand the amount specified in subsection (3) below if, within a period of five years, there is a disposal falling within subsection (4) below, (the " further disposal"); but if there is more than one further disposal, then only on the first of them. (3) The amount payable under the covenant is an amount equal to the discount given to the purchaser, but reduced by 20 per cent, of that discount for each complete year which elapses after the first disposal and before the further disposal. (4) A disposal falls within this subsection if it is— (a) a 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 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. (5) The liability that may arise under the covenant required by subsection (2) above shall be a charge on the 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 purchaser or advanced to him by a body specified in subsection (6) below for the purpose of enabling him to acquire the interest disposed of on the first disposal or further advanced to him by that body. (6) The bodies referred to in subsection (5)(b) above are any building society and 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. (7) A charge taking effect by virtue of subsection (5) 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. (8) The reference in subsection (4) above to a lease or sub-lease does not include a mortgage term. (9) 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 " purchaser" means the person acquiring the interest disposed of by the first disposal; and for the purposes of this section the grant of an option enabling a person to call for a disposal falling within subsection (4) above shall be treated as such a disposal. (104C) (1) Where a conveyance, grant or assignment executed under section 104 of this Act (the " first disposal ") is of a house situated in a National Park, or an area designated under section 87 of the National Parks and Access to the Countryside Act 1949 as an area of outstanding natural beauty, or an area designated by order of the Secretary of State as a rural area, the conveyance, grant or assignment may (unless it contains a condition of a kind mentioned in section 104(6)(b) or (c) above) contain a covenant limiting the freedom of the purchaser and his successors in title to dispose of the house in the manner specified in subsection (2) below. (2) The limitation is that, until such time (if any) as may be notified in writing by the local authority to the purchaser or his successors in title there will be no disposal falling within subsection (4) below (the " further disposal") without the written consent of the local authority; but that consent shall not be withheld if the further disposal is to a person satisfying the condition stated in subsection (3) below. (3) The condition is that the person to whom the further disposal is made (or, if it is made to more than one person, at least one of them) has, throughout the period of three years immediately preceding the application for consent, either— (a) had his place of work in a designated region which or part of which is comprised in the National Park or area ; or (b) had his only or principal home in such a region; or has had the one in part or parts of that period and the other in the remainder; but the region need not have been the same throughout the whole of the period. (4) A disposal falls within this subsection if it is— (a) a 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 21 years otherwise than at a rack rent; whether the disposal is of the whole or part of the 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. (5) If the further disposal is in breach of the covenant mentioned in subsection (1) above, it shall be void. (6) The limitation imposed by such a covenant shall be a local land charge and, if the land is registered under the Land Registration Act 1925, the Chief Land Registrar shall enter the appropriate restriction on the register of title as if application therefor had been made under section 58 of that Act. (7) The reference in subsection (4) above to a lease or sub-lease does not include a mortgage term. (8) In this section " purchaser " means the person acquiring the interest disposed of by the first disposal. (9) In this section " designated region " means an area designated for the purposes of this section by order of the Secretary of State. (10) For the purposes of this section the grant to any person of an option enabling him to call for a disposal falling within subsection (4) above shall be treated as such a disposal made to that person and a consent to such a grant as a consent to a disposal made in pursuance of the option.

.

Acquisition of land for purpose of its subsequent disposal

93

It is hereby declared that—

• (a) the power of a local authority to acquire land under section 96 of the 1957 Act (power of local authority to acquire land for provision of housing accommodation) includes power to do so for the purpose of disposing of houses erected, or to be erected, on the land or of disposing of the land to a person who intends to provide housing accommodation on it; and

• (b) the things that a local authority may do under section 92 of that Act (mode of provision of accommodation) may equally be done in relation to land acquired for either of those purposes.

Options granted before commencement of section 91

94

The limitations on a local authority's statutory power to dispose of houses acquired or appropriated for the purposes of Part V of the 1957 Act shall not be taken to have prevented a local authority, at any time before the commencement of section 91 of this Act, from granting to the tenant of a house an option to purchase the freehold of, or any other interest in, the house.

Appropriation of land

95

After section 110 of the 1957 Act there is inserted the following section—

(110A) (1) Where a local authority have acquired or appropriated any land for the purposes of this Part of this Act they shall not, without the consent of the Minister, appropriate any part of that land which consists of a house or part of a house for any other purpose. (2) Any consent under this section may be given either generally to all local authorities or to any particular local authority or description of authority and either in relation to any particular land or description of land. (3) Any such consent may be given subject to such conditions as the Minister sees fit to impose.

.

PART VI — Housing Subsidies

New housing subsidy to replace certain existing subsidies and contributions Local authorities

96

• (1) For the year 1981-82 and subsequent years—

• (a) a subsidy, to be known as housing subsidy, shall be payable to local authorities, new town corporations and the Development Board for Rural Wales in accordance with this Part of this Act;

• (b) no payment shall be made under any of the enactments listed in Part I of Schedule 11 to this Act; and

• (c) no payment shall be made under any of the enactments listed in Part II of Schedule 11 to this Act in respect of dwellings within a local authority's Housing Revenue Account or a new town corporation's housing account.

• (2) No grant shall be made after 31st March 1981 under section 14 of the Housing (Financial Provisions) Act 1958 (grants for building experiments).

Local authorities

Housing subsidy for local authorities

97

• (1) The amount of the housing subsidy payable to a local authority for any year (the year of account) shall be calculated from the amounts which are the authority's—

• (a) base amount (BA);

• (b) housing costs differential (HCD); and

• (c) local contribution differential (LCD);

for that year and shall be so calculated by using the formula $BA+HCD−LCD$.

• (2) If the amount so calculated is nil or a negative amount, no housing subsidy is payable to the authority for the year of account.

The base amount

98

• (1) A local authority's base amount is, subject to any adjustment under this section.—

• (a) for the year 1982-83 or any subsequent year, the amount calculated for the preceding year under section 97, that is to say, the amount of subsidy payable to the authority for the year (or, if none was payable, nil or a negative amount, as the case may be);

• (b) for the year 1981-82, the aggregate of the following amounts payable to the authority for the year 1980-81, that is to say—

• (i) the amount of housing subsidy under section 2 of the 1975 Act;

• (ii) the amount (if any) of expanding towns subsidy under section 4 of the 1975 Act; and

• (iii) the amount of any contribution under the enactments listed in Part II of Schedule 11 which is payable in respect of any dwelling within the authority's Housing Revenue Account.

• (2) If the Secretary of State is of opinion that particular circumstances require it, he may adjust the base amount for any year by increasing or decreasing it, either generally or in relation to any description of authority or any particular authority ; and, without prejudice to the generality of this provision, he may adjust the base amount for the year 1981-82 by excluding from the amount taken into account as housing subsidy under section 2 of the 1975 Act so much of the new capital costs element and the high costs element as was in his opinion attributable to capital costs directly charged to revenue.

The housing costs differential

99

• (1) A local authority's housing costs differential for any year of account is the amount by which its reckonable expenditure for that year exceeds its reckonable expenditure for the preceding year (and accordingly is nil or, as the case may be, a negative amount if its reckonable expenditure for the year of account is the same or less).

• (2) A local authority's reckonable expenditure for any year is the aggregate of—

• (a) so much of the expenditure incurred by the authority in that year and falling to be debited to its Housing Revenue Account as the Secretary of State may determine ; and

• (b) so much of any other expenditure incurred by the local authority in that year or treated, in accordance with any determination made by the Secretary of State, as so incurred, as the Secretary of State may determine to take into account for the purposes of housing subsidy.

• (3) A determination under this section may be made for all local authorities or different determinations may be made for authorities of different descriptions or for authorities in England and authorities in Wales or in different parts of England or Wales or for individual authorities ; and any such determination may be varied or revoked in relation to all or any of the authorities for which it was made.

• (4) Before making a determination for all local authorities the Secretary of State shall consult with organisations appearing to him to be representative of local authorities.

The local contribution differential

100

• (1) A local authority's local contribution differential for any year of account is the amount by which its reckonable income for that year exceeds its reckonable income for the preceding year (and accordingly is nil or, as the case may be, a negative amount if its reckonable income for the year of account is the same or less).

• (2) A local authority's reckonable income for any year is the amount which, in accordance with any determination made by the Secretory of State, the local authority is assumed to receive for that year as income which it is required to carry to its Housing Revenue Account, but—

• (a) excluding, subject to paragraph (b) below, any income derived from any subsidy, grant or contribution; and

• (b) including any contribution made by the authority out of its general rate fund as well as any modified rent rebate subsidy payable under section 3 of the 1975 Act.

• (3) A determination under this section shall state the assumptions on which it is based and the method of calculation used in it, and in making it the Secretary of State shall have regard, among other things, to past and expected movements in incomes, costs and prices.

• (4) A determination under this section may be made for all local authorities or different determinations may be made for authorities of different descriptions or for authorities in England and authorities in Wales or in different parts of England or Wales or for individual authorities, and every determination shall be made known in the year preceding the year of account to the local authorities for which it is made.

• (5) Before making a determination for all local authorities the Secretary of State shall consult with organisations appearing to him to be representative of local authorities.

Other housing authorities

Housing subsidy for other bodies

101

• (1) Sections 97 to 100 above apply in relation to new town corporations and the Development Board for Rural Wales as they apply in relation to local authorities, but subject to the following provisions of this section.

• (2) In relation to a new town corporation—

• (a) section 98 has effect as if the aggregate mentioned in subsection (1)(b) included so much of the grant made to the corporation for the year 1980-81 under section 42(2) or 42(3A) of the New Towns Act 1965 as was to be credited to the corporation's housing account; and

• (b) sections 98, 99 and 100 have effect as if for references to the Housing Revenue Account there were substituted references to the housing account and for the reference to the general rate fund a reference to the general revenue account.

• (3) In relation to the Board.—

• (a) section 98 has effect as if for the references to section 2 of the 1975 Act there were substituted references to section 18 of the Development of Rural Wales Act 1976 and the aggregate mentioned in subsection (1)(b) included so much of the grants made to the Board for the year 1980-81 under section 11 of the Act of 1976 as was to be credited to its housing account; and

• (b) sections 99 and 100 have effect as if for references to the Housing Revenue Account there were substituted references to the housing account, and the contribution and rent rebate subsidy referred to in section 100(2)(6) were respectively any contribution made by the Board out of revenue and the subsidy payable under section 19 of the Act of 1976.

• (4) The consultations required by section 99(4) or 100(5) shall be with organisations appearing to the Secretary of State to be representative of new town corporations or, as the case may be, with the Development Board for Rural Wales.

• (5) The Commission for the New Towns is to be treated as a separate body in respect of each of its new towns.

Recoupment

Recoupment of subsidy

102

• (1) Where any subsidy has been paid to any local authority or other body under this Part of this Act, and it appears to the Secretary of State that—

• (a) the purpose for which it was paid has not been fulfilled or not completely or adequately or not without unreasonable delay; and

• (b) that the case falls within rules published by him;

he may recover from the authority or other body the whole or such part of the payment as he may determine in accordance with the rules, with interest from such time and at such rates as he may so determine.

• (2) A sum recoverable under this section may be recovered either as a simple contract debt or by withholding or reducing housing subsidy payable in any year or in successive years.

• (3) The withholding or reduction under this section of housing subsidy payable to a local authority or other body for any year shall not affect the authority's or other body's base amount for the following year.

Administration

Administration of housing subsidy

103

• (1) Housing subsidy shall be paid out of moneys provided by Parliament and shall be credited—

• (a) if paid to a local authority, to the authority's Housing Revenue Account; and

• (b) if paid to another body, to that body's housing account or appropriate housing account.

• (2) Housing subsidy shall be paid by the Secretary of State at such times, in such manner and subject to such conditions as to records, certificates, audit or otherwise as he may, with the agreement of the Treasury, determine.

• (3) Payment of subsidy shall be subject to the making of a claim for it in such form, and containing such particulars, as the Secretary of State may from time to time determine.

Transitional town development subsidy

Power to commute transitional town development subsidy and payments to receiving authority

104

• (1) Where, under section 5 of the 1975 Act, transitional town development subsidy is payable to a sending authority for years later than the year 1979-80 the Secretary of State may, with the agreement of the sending authority and of the receiving authority, determine—

• (a) to commute further payments of transitional development subsidy into a single payment of an amount determined by him or calculated in a manner determined by him; and

• (b) to commute the corresponding payments by the sending authority to the receiving authority under subsection (6) of that section into a single payment of an amount four times that payable under paragraph (a) above.

• (2) In making a determination under this section the Secretary of State shall make such allowance (if any) as appears to him appropriate for circumstances in which, if there were no commutation, his power under section 5 of the 1975 Act to reduce or discontinue the sending authority's transitional town development subsidy might be exercised.

Interpretation

Interpretation of Part VI

105

In this Part of this Act—

• " local authority " means the council of a district or London borough, the Greater London Council, the Common Council of the City of London or the Council of the Isles of Scilly;

• " new town corporation" means a development corporation (within the meaning of the New Towns Act 1965) or the Commission for the New Towns ;

• " year " means any period of 12 months beginning on a 1st April;

• " year of account" means the year for which any housing subsidy is or may be payable under this Part of this Act.

PART VII — Housing: Financial and Related Provisions

Repairs and improvements

Grants for tenants under Part VII of Housing Act 1974

106

• (1) A local authority may entertain an application for a grant under Part VII of the 1974 Act from a person who has, in relation to his dwelling—

• (a) a protected tenancy or a statutory tenancy ;

• (b) a secure tenancy ;

• (c) a tenancy to which section 1 of the Landlord and Tenant Act 1954 applies and of which less than 5 years remain unexpired at the date of the application ;

• (d) a protected occupancy or statutory tenancy within the meaning of the Rent (Agriculture) Act 1976 ; or

• (e) a tenancy which satisfies such conditions as may be prescribed,

but not where the application is for an improvement grant in respect of works required for the provision of a dwelling.

• (2) A local authority may refuse to entertain the application unless it is accompanied by a certificate given by a qualified person and stating his intention that, throughout the period of 5 years beginning with the certified date—

• (a) the dwelling will be let or available for letting as a residence, and not for a holiday, to a person other than a member of the family of the person giving the certificate; or

• (b) the dwelling will be occupied or available for occupation by a member of the agricultural population in pursuance of a contract of service and otherwise than as a tenant,

(disregarding any part of that period in which neither of the above paragraphs applies but the dwelling is occupied by a protected occupier under the Rent (Agriculture) Act 1976).

• (3) A person is qualified to give a certificate for the purposes of subsection (2) if the local authority could (apart from this section) have entertained an application from him.

• (4) Unless the application is accompanied by that certificate, the authority shall not impose any of the grant conditions specified in section 74(2) of the 1974 Act (future letting of a dwelling).

• (5) Expressions defined for the purposes of Part VII of the 1974 Act have the same meanings in this section as they have in that Part.

Miscellaneous changes in Part VII of Housing Act 1974

107

The provisions of Part VII of the 1974 Act relating to local authority improvement, repairs and other grants are amended in accordance with Schedule 12 to this Act (amendments to alter certain conditions of grants, relax other conditions, and make other minor and consequential changes).

Disposal of houses after repair, improvement or conversion

108

• (1) The Secretary of State may, with the consent of the Treasury, make schemes for making contributions out of moneys provided by Parliament to the net cost (as determined under the schemes) to local authorities of disposing of dwellings in cases of the kind mentioned in subsection (2) below.

• (2) Those cases are where an authority—

• (a) disposes of a house as one dwelling ;

• (b) divides a house into two or more separate dwellings and disposes of them ; or

• (c) combines two houses to form one dwelling and disposes of it,

after carrying out works of repair, improvement or conversion.

• (3) The cost towards which contributions may be made under such a scheme shall not exceed £5,000 for any one dwelling, but the Secretary of State may, by order made with the consent of the Treasury, substitute another amount for £5,000.

• (4) In this section—

• " house " includes a flat;

• " local authority " means the council of a district or London borough, the Greater London Council, the Common Council of the City of London or the Council of the Isles of Scilly.

• (5) Section 79 of the 1974 Act (payment of improvement contributions to housing authorities) is hereby repealed.

General improvement areas, housing action areas and priority neighbourhoods

109

• (1) The enactments relating to general improvement areas and housing action areas are amended in accordance with Schedule 13 to this Act.

• (2) Part VI of the 1974 Act (priority neighbourhoods) shall cease to have effect but without prejudice to the status of any land as part of a priority neighbourhood declared before the commencement of this section.

• (3) Section 29B of the 1969 Act (incorporation of priority neighbourhood into general improvement area) shall cease to have effect; but—

• (a) any land comprised in a priority neighbourhood declared before the commencement of this section shall cease to be such land on the area comprising the land becoming a general improvement area; and

• (b) this subsection does not affect the operation of section 29B in any case where a preliminary resolution under that section was passed before the commencement of this section.

Mortgages and home ownership

Local authority mortgage interest rates

110

• (1) Where, after the commencement of this subsection, a local authority—

• (a) advances money for any of the purposes mentioned in subsection (2) below ; or

• (b) on the disposal of any dwelling-house, allows or has to allow any sum to be left outstanding on the security of the dwelling-house; or

• (c) takes a transfer of a mortgage in pursuance of section 111 of this Act;

the provision to be made by it with respect to interest on the sum advanced or remaining outstanding shall comply with the following provisions of this section, unless the advance, disposal or transfer is made in pursuance of a binding contract entered into before the commencement of this subsection or entered into by the acceptance of an offer made by the local authority which was capable of being accepted before the commencement of this subsection.

• (2) The purposes mentioned in subsection (1)(a) above are—

• (a) acquiring a house ;

• (b) constructing a house ;

• (c) converting another building into a house or houses or acquiring another building and converting it into a house or houses;

• (d) altering, enlarging, repairing or improving a house ; and

• (e) facilitating the repayment of an amount outstanding on a previous loan made for any of the purposes specified in paragraphs (a) to (d) above ;

and " house " in this subsection has the same meaning as in the Housing (Financial Provisions) Act 1958.

• (3) The rate of interest shall be whichever is for the time being the higher of the following, namely—

• (a) the standard national rate (as defined in subsection (4) below); and

• (b) the applicable local average rate (as defined in subsection (5) below);

and shall be capable of being varied by the local authority whenever a change in either or both of those rates requires it; and the amount of the periodic payments shall be capable of being varied correspondingly.

• (4) The standard national rate is the rate for the time being declared as such by the Secretary of State after taking into account interest rates charged by building societies in the United Kingdom and any movement in those rates.

• (5) The applicable local average rate is whichever of the two rates for the time being declared by the local authority in accordance with subsection (6) below is applicable.

• (6) A local authority shall for such period not exceeding six months and beginning at the commencement of subsection (1) above as it may determine and for every subsequent period of six months declare, on a date falling within the month immediately preceding that period, a rate applicable to the advances and transfers mentioned in subsection (1)(a) and (c) above and a rate applicable to the sums left outstanding as mentioned in subsection (1)(6) above; and—

• (a) the rate applicable to those advances and transfers shall be a rate exceeding by \ per cent, that which the authority estimates it has to charge in order to service the loan charges on money borrowed or to be borrowed by the authority for the purpose of such advances and transfers; and

• (b) the rate applicable to the sums left outstanding shall be a rate exceeding by \ per cent, the average, on the date the rate is declared, of the rates at which all loan charges debited to the authority's appropriate account are serviced.

• (7) The appropriate account for the purposes of paragraph (b) of subsection (6) above is—

• (a) for sums left outstanding on the disposal of dwelling houses held by a local authority under Part V of the 1957 Act, the authority's Housing Revenue Account; and

• (b) for any other sums left outstanding, the general fund if the authority is the Greater London Council or the Council of the Isles of Scilly, the county fund if it is the council of a county, the general rate if it is the Common Council of the City of London and the general rate fund in any other case ;

and in that subsection " loan charges " has the meaning given by section 104(3)(b) of the 1972 Act (or, in relation to the council of a county, the meaning that would be so given if the council were a housing authority within the meaning of that Act).

• (8) Where, on any such change as is mentioned in subsection (3) above, a rate of interest is capable of being varied, the local authority shall vary it and shall serve on the person liable to pay the interest notice in writing of the variation not later than two months after the change; and the variation shall take effect with the first payment of interest due after a date specified in the notice, which—

• (a) if the variation is a reduction, shall be not later than one month after the change ; and

• (b) if the variation is an increase, shall be not earlier than one month nor later than three months after the service of the notice.

• (9) On a variation, in accordance with subsection (8) above, of a rate of interest the local authority may make a corresponding variation of the periodic payments, which shall be notified and take effect together with the variation of the rate of interest; and it shall do so if otherwise the period over which the repayment of principal is to be made would be reduced below the period fixed when the mortgage was effected.

• (10) The Secretary of State may by notice in writing to a local authority direct it to treat a rate specified in the notice as being the higher of the rates mentioned in subsection (3) above, either during a period specified in the notice or until further notice, and may by a further notice in writing vary or withdraw any direction so given ; and where such a direction is given the preceding provisions of this section shall have effect accordingly.

• (11) This section shall not prevent a local authority, if the conditions stated in subsection (12) below are satisfied, from giving assistance to a person acquiring a house in need of repair or improvement by making provision for waiving or reducing, for a period ending not later than five years after the date of the advance mentioned in subsection (1)(a) above or the disposal mentioned in subsection (1)(b) above, the interest payable on the sum advanced or remaining outstanding and for dispensing during that period with any repayment of principal.

• (12) The conditions mentioned in subsection (11) above are that—

• (a) the assistance is given in accordance with a scheme which either has been approved by the Secretary of State or conforms with such requirements as may be specified in an order made by the Secretary of State with the consent of the Treasury ; and

• (b) the person acquiring the house has entered into an agreement with the local authority to carry out, within a period specified in the agreement, such works of repair or improvement as are so specified.

• (13) This section shall not prevent a local authority from giving assistance in the manner provided by section 1(4)(b) of the Home Purchase Assistance and Housing Corporation Guarantee Act 1978 (part of certain loans to be free of interest for up to five years).

• (14) This section does not apply to loans made by local authorities to housing associations under section 119 of the 1957 Act.

• (15) In this section " local authority " means the council of a county, the council of a district or London borough, the Greater London Council, the Common Council of the City of London or the Council of the Isles of Stilly.

Local authority and Housing Corporation indemnities for building societies

111

• (1) Local authorities and the Housing Corporation may, with the approval of the Secretary of State, enter into agreements with building societies lending on the security of house property whereby, in the event of default by the mortgagor, and in circumstances and subject to conditions specified in the agreements, an authority or the Corporation binds itself to indemnify the building society in respect of—

• (a) the whole or part of the mortgagor's outstanding indebtedness ; and

• (b) any loss or expense falling on the building society in consequence of the mortgagor's default.

• (2) In subsection (1) above " house property " means any property which is a house for the purposes of the Housing (Financial Provisions) Act 1958.

• (3) The agreement may also, where the mortgagor is made party to it, enable or require the authority or the Corporation in specified circumstances to take a transfer of the mortgage and assume rights and liabilities under it, the building society being then discharged in respect of them.

• (4) The transfer may be made to take effect—

• (a) on any terms provided for by the agreement (including terms involving substitution of a new mortgage agreement or modification of the existing one); and

• (b) so that the authority or the Corporation are treated as acquiring (for and in relation to the purposes of the mortgage) the benefit and burden of all preceding acts, omissions and events.

• (5) The Secretary of State may under subsection (1) approve particular agreements or give notice that particular forms of agreement have his approval; and—

• (a) he may in either case make the approval subject to conditions;

• (b) he shall, before giving notice that a particular form has his approval, consult the Chief Registrar of Friendly Societies and such organisations representative of building societies and local authorities as he thinks expedient.

• (6) In this section " local authority " means a county or district council, the Greater London Council, a London borough council, the Common Council of the City of London or the Council of the Isles of Scilly.

• (7) In this section " building society " means a society within the Building Societies Act 1962 or the Building Societies Act (Northern Ireland) 1967.

• (8) Section 16(3) and (5) of the Restrictive Trade Practices Act 1976 (recommendations by services supply association to members) shall not apply to recommendations made to building societies about the making of agreements under this section, provided that the recommendations are made with the approval of the Secretary of State, which may be withdrawn at any time on one month's notice.

Vesting of mortgaged property by local authorities

112

• (1) The following provisions of this section apply where, before the commencement of section 91(1) above, a local authority has sold any property under the powers of section 104(1) of the 1957 Act and—

• (a) part of the price was secured by a mortgage on the property; and

• (b) such a condition was imposed on the sale as is mentioned in section 104(3)(c) of that Act (right of pre-emption) ; and

• (c) the period during which the authority has the right to re-acquire the property under that condition has not expired.

• (2) If the authority as mortgagee has become entitled to exercise the power of sale conferred by section 101 of the Law of Property Act 1925 or by the mortgage deed, it may, if the county court gives it leave to do so, by deed vest the property in itself—

• (a) for such estate and interest in the property as is the subject of the mortgage or as it would be authorised to sell or convey under that Act on exercising its power of sale; and

• (b) freed from all estates, interests and rights to which the mortgage has priority,

but subject to all estates, interests and rights which have priority to the mortgage.

• (3) Accordingly, on the vesting of the property the authority's mortgage term or charge by way of legal mortgage, and any subsequent mortgage term or charge, shall merge or be extinguished as respects the property vested.