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Leasehold Reform, Housing and Urban Development Act 1993

Type Public General Act

Publication 1993-07-20

Last updated 2024-11-04

State In force

Department Statute Law Database

Source legislation.gov.uk

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(7) Where an order has been made under subsection (2) or (3A)dispensing with the need to give a notice under section 13, or a copy of such a notice, to a particular person with respect to any particular premises, then if—

(a) a notice is subsequently given under that section with respect to those premises, and

(b) in reliance on the order, the notice or a copy of the notice is not to be given to that person,

the notice must contain a statement of the effect of the order.

(8) Where a notice under section 13 contains such a statement in accordance with subsection (7) above, then in determining for the purposes of any provision of this Chapter whether the requirements of section 13 or Part II of Schedule 3 have been complied with in relation to the notice, those requirements shall be deemed to have been complied with so far as relating to the giving of the notice or a copy of it to the person referred to in subsection (7) above.

(9) Rules of court shall make provision—

(a) for requiring notice of any application under subsection (3) to be served by the persons making the application on any person who the applicants know or have reason to believe is a relevant landlord; and

(b) for enabling persons served with any such notice to be joined as parties to the proceedings.

Supplementary provisions relating to vesting orders under section 26(1)

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(1) A vesting order under section 26(1) is an order providing for the vesting of any such interests as are referred to in paragraph (i) or (ii) of that provision—

(a) in such person or persons as may be appointed for the purpose by the applicants for the order, and

(b) on such terms as may be determined by the appropriate tribunal to be appropriate with a view to the interests being vested in that person or those persons in like manner (so far as the circumstances permit) as if the applicants had, at the date of their application, given notice under section 13 of their claim to exercise the right to collective enfranchisement in relation to the premises with respect to which the order is made.

(2) If the appropriate tribunal so determines in the case of a vesting order under section 26(1), the order shall have effect in relation to interests which are less extensive than those specified in the application on which the order was made.

(3) Where any interests are to be vested in any person or persons by virtue of a vesting order under section 26(1), then on his or their paying into court the appropriate sum in respect of each of those interests there shall be executed by such person as the court may designate a conveyance which—

(a) is in a form approved by the appropriate tribunal, and

(b) contains such provisions as may be so approved for the purpose of giving effect so far as possible to the requirements of section 34 and Schedule 7;

and that conveyance shall be effective to vest in the person or persons to whom the conveyance is made the interests expressed to be conveyed, subject to and in accordance with the terms of the conveyance.

(4) In connection with the determination by the appropriate tribunal of any question as to the interests to be conveyed by any such conveyance, or as to the rights with or subject to which they are to be conveyed, it shall be assumed (unless the contrary is shown) that any person whose interests are to be conveyed (“the transferor”) has no interest in property other than those interests and, for the purpose of excepting them from the conveyance, any minerals underlying the property in question.

(5) The appropriate sum which in accordance with subsection (3) is to be paid into court in respect of any interest is the aggregate of—

(a) such amount as may be determined by the appropriate tribunal to be the price which would be payable in respect of that interest in accordance with Schedule 6 if the interest were being acquired in pursuance of such a notice as is mentioned in subsection (1)(b); and

(b) any amounts or estimated amounts determined by such a tribunal as being, at the time of execution of the conveyance, due to the transferor from any tenants of his of premises comprised in the premises in which that interest subsists (whether due under or in respect of their leases or under or in respect of agreements collateral thereto).

(6) Where any interest is vested in any person or persons in accordance with this section, the payment into court of the appropriate sum in respect of that interest shall be taken to have satisfied any claims against the applicants for the vesting order under section 26(1), their personal representatives or assigns in respect of the price payable under this Chapter for the acquisition of that interest.

(7) Where any interest is so vested in any person or persons, section 32(5) shall apply in relation to his or their acquisition of that interest as it applies in relation to the acquisition of any interest by a nominee purchaser.

Termination of acquisition procedures

Withdrawal from acquisition by participating tenants

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(1) At any time before a binding contract is entered into in pursuance of the initial notice, the participating tenants may withdraw that notice by the giving of a notice to that effect under this section (“a notice of withdrawal”).

(2) A notice of withdrawal must be given—

(a) to the nominee purchaser;

(b) to the reversioner in respect of the specified premises; and

(c) to every other relevant landlord who is known or believed by the participating tenants to have given to the nominee purchaser a notice under paragraph 7(1) or (4) of Schedule 1;

and, if by virtue of paragraph (c) a notice of withdrawal falls to be given to any person falling within that paragraph, it shall state that he is a recipient of the notice.

(3) The nominee purchaser shall, on receiving a notice of withdrawal, give a copy of it to every relevant landlord who—

(a) has given to the nominee purchaser such a notice as is mentioned in subsection (2)(c); and

(b) is not stated in the notice of withdrawal to be a recipient of it.

(4) Where a notice of withdrawal is given by the participating tenants under subsection (1)—

(a) those persons, and

(b) (subject to subsection (5)) every other person who is not a participating tenant for the time being but has at any time been such a tenant,

shall be liable—

(i) to the reversioner, and

(ii) to every other relevant landlord,

for all relevant costs incurred by him in pursuance of the initial notice down to the time when the notice of withdrawal or a copy of it is given to him in accordance with subsection (2) or (3).

(5) A person falling within paragraph (b) of subsection (4) shall not be liable for any costs by virtue of that subsection if—

(a) the lease in respect of which he was a participating tenant has been assigned to another person; and

(b) that other person has become a participating tenant in accordance with section 14(4);

and in paragraph (a) above the reference to an assignment shall be construed in accordance with section 14(10).

(6) Where any liability for costs arises under subsection (4)—

(a) it shall be a joint and several liability of the persons concerned; and

(b) the nominee purchaser shall not be liable for any costs under section 33.

(7) In subsection (4) “relevant costs”, in relation to the reversioner or any other relevant landlord, means costs for which the nominee purchaser would (apart from subsection (6)) be liable to that person under section 33.

Deemed withdrawal of initial notice

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(1) Where, in a case falling within paragraph (a) of subsection (1) of section 22—

(a) no application for an order under that subsection is made within the period specified in subsection (2) of that section, or

(b) such an application is so made but is subsequently withdrawn,

the initial notice shall be deemed to have been withdrawn—

(i) (if paragraph (a) above applies) at the end of that period, or

(ii) (if paragraph (b) above applies) on the date of the withdrawal of the application.

(2) Where—

(a) in a case to which subsection (1) of section 24 applies, no application under that subsection is made within the period specified in subsection (2) of that section, or

(b) in a case to which subsection (3) of that section applies, no application for an order under subsection (4) of that section is made within the period specified in subsection (5) of that section,

the initial notice shall be deemed to have been withdrawn at the end of the period referred to in paragraph (a) or (b) above (as the case may be).

(3) Where, in a case falling within paragraph (a) or (b) of subsection (1) of section 25, no application for an order under that subsection is made within the period specified in subsection (4) of that section, the initial notice shall be deemed to have been withdrawn at the end of that period.

(4) Where, in a case to which subsection (5) of section 25 applies, no application for an order under subsection (6) of that section is made within the period specified in subsection (7) of that section, the initial notice shall be deemed to have been withdrawn at the end of that period.

(5) The following provisions, namely—

(a) section 15(10),

(b) section 16(8),

(d) section 24(4)(c), and

(e) section 25(6)(c),

also make provision for a notice under section 13 to be deemed to have been withdrawn at a particular time.

(6) Where the initial notice is deemed to have been withdrawn at any time by virtue of any provision of this Chapter, subsections (4) and (5) of section 28 shall apply for the purposes of this section in like manner as they apply where a notice of withdrawal is given under that section, but as if the reference in subsection (4) of that section to the time when a notice or copy is given as there mentioned were a reference to the time when the initial notice is so deemed to have been withdrawn.

(7) Where the initial notice is deemed to have been withdrawn by virtue of section 15(10) or 16(8)—

(a) the liability for costs arising by virtue of subsection (6) above shall be a joint and several liability of the persons concerned; and

(b) the nominee purchaser shall not be liable for any costs under section 33.

(8) In the provisions applied by subsection (6), “relevant costs”, in relation to the reversioner or any other relevant landlord, means costs for which the nominee purchaser is, or would (apart from subsection (7)) be, liable to that person under section 33.

Effect on initial notice or subsequent contract of institution of compulsory acquisition procedures

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(1) A notice given under section 13 shall be of no effect if on the relevant date—

(a) any acquiring authority has, with a view to the acquisition of the whole or part of the specified premises for any authorised purpose—

(i) served notice to treat on any relevant person, or

(ii) entered into a contract for the purchase of the interest of any such person in the premises or part of them, and

(b) the notice to treat or contract remains in force.

(2) In subsection (1) “relevant person”, in relation to the specified premises, means—

(a) the person who owns the freehold of the premises; or, where the freehold of the whole of the premises is not owned by the same person, any person who owns the freehold of part of them or

(b) any other person who owns any leasehold interest in the premises which is specified in the initial notice under section 13(3)(c)(i).

(3) A notice given under section 13 shall not specify under subsection (3)(a)(ii) or (c)(i) of that section any property or leasehold interest in property if on the relevant date—

(a) any acquiring authority has, with a view to the acquisition of the whole or part of the property for any authorised purpose—

(i) served notice to treat on the person who owns the freehold of, or any such leasehold interest in, the property, or

(ii) entered into a contract for the purchase of the interest of any such person in the property or part of it, and

(b) the notice to treat or contract remains in force.

(4) A notice given under section 13 shall cease to have effect if, before a binding contract is entered into in pursuance of the notice, any acquiring authority serves, with a view to the acquisition of the whole or part of the specified premises for any authorised purpose, notice to treat as mentioned in subsection (1)(a).

(5) Where any such authority so serves notice to treat at any time after a binding contract is entered into in pursuance of the notice given under section 13 but before completion of the acquisition by the nominee purchaser under this Chapter, then (without prejudice to the general law as to the frustration of contracts) the parties to the contract shall be discharged from the further performance of the contract.

(6) Where subsection (4) or (5) applies in relation to the initial notice or any contract entered into in pursuance of it, then on the occasion of the compulsory acquisition in question the compensation payable in respect of any interest in the specified premises (whether or not the one to which the relevant notice to treat relates) shall be determined on the basis of the value of the interest—

(a) (if subsection (4) applies) subject to and with the benefit of the rights and obligations arising from the initial notice and affecting that interest; or

(b) (if subsection (5) applies) subject to and with the benefit of the rights and obligations arising from the contract and affecting that interest.

(7) In this section—

(a) “acquiring authority”, in relation to the specified premises or any other property, means any person or body of persons who has or have been, or could be, authorised to acquire the whole or part of those premises or that property compulsorily for any purpose; and

(b) “authorised purpose”, in relation to any acquiring authority, means any such purpose.

Effect on initial notice of designation for inheritance tax purposes and applications for designation

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(1) A notice given under section 13 shall be of no effect if on the relevant date the whole or any part of—

(a) the specified premises, or

(b) any property specified in the notice under section 13(3)(a)(ii),

is qualifying property.

(2) For the purposes of this section the whole or any part of the specified premises, or of any property specified as mentioned in subsection (1), is qualifying property if—

(a) it has been designated under section 31(1)(b), (c) or (d) of the Inheritance Tax Act 1984 (designation and undertakings relating to conditionally exempt transfers), whether with or without any other property, and no chargeable event has subsequently occurred with respect to it; or

(b) an application to the Board for it to be so designated is pending; or

(c) it is the property of a body not established or conducted for profit and a direction has been given in relation to it under section 26 of that Act (gifts for public benefit), whether with or without any other property; or

(d) an application to the Board for a direction to be so given in relation to it is pending.

(3) For the purposes of subsection (2) an application is pending as from the time when it is made to the Board until such time as it is either granted or refused by the Board or withdrawn by the applicant; and for this purpose an application shall not be regarded as made unless and until the applicant has submitted to the Board all such information in support of the application as is required by the Board.

(4) A notice given under section 13 shall cease to have effect if, before a binding contract is entered into in pursuance of the notice, the whole or any part of—

(a) the specified premises, or

(b) any property specified in the notice under section 13(3)(a)(ii),

becomes qualifying property.

(5) Where a notice under section 13 ceases to have effect by virtue of subsection (4) above—

(a) the nominee purchaser shall not be liable for any costs under section 33; and

(b) the person who applied or is applying for designation or a direction shall be liable—

(i) to the qualifying tenants by whom the notice was given for all reasonable costs incurred by them in the preparation and giving of the notice; and

(ii) to the nominee purchaser for all reasonable costs incurred in pursuance of the notice by him or by any other person who has acted as the nominee purchaser.

(6) Where it is claimed that subsection (1) or (4) applies in relation to a notice under section 13, the person making the claim shall, at the time of making it, furnish the nominee purchaser with evidence in support of it; and if he fails to do so he shall be liable for any costs which are reasonably incurred by the nominee purchaser in consequence of the failure.

(7) In subsection (2)—

(a) paragraphs (a) and (b) apply to designation under section 34(1)(a), (b) or (c) of the Finance Act 1975 or section 77(1)(b), (c) or (d) of the Finance Act 1976 as they apply to designation under section 31(1)(b), (c) or (d) of the Inheritance Tax Act 1984; and

(b) paragraphs (c) and (d) apply to a direction under paragraph 13 of Schedule 6 to the Finance Act 1975 as they apply to a direction under section 26 of that Act of 1984.

(8) In this section—

“the Board” means the Commissioners of Inland Revenue;

“chargeable event” means—any event which in accordance with any provision of Chapter II of Part II of the Inheritance Tax Act 1984 (exempt transfers) is a chargeable event, including any such provision as applied by section 78(3) of that Act (conditionally exempt occasions); orany event which would have been a chargeable event in the circumstances mentioned in section 79(3) of that Act (exemption from ten-yearly charge).

Determination of price and costs of enfranchisement

Determination of price

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(1) Schedule 6 to this Act (which relates to the determination of the price payable by the nominee purchaser in respect of each of the freehold and other interests to be acquired by him in pursuance of this Chapter) shall have effect.

(2) The lien of the owner of any such interest (as vendor) on the specified premises, or (as the case may be) on any other property, for the price payable shall extend—

(a) to any amounts which, at the time of the conveyance of that interest, are due to him from any tenants of his of premises comprised in the premises in which that interest subsists (whether due under or in respect of their leases or under or in respect of agreements collateral thereto); and

(b) to any amount payable to him by virtue of section 18(2); and

(3) Subsection (2)(a) does not apply in relation to amounts due to the owner of any such interest from tenants of any premises which are to be comprised in the premises demised by a lease granted in accordance with section 36 and Schedule 9.

(4) In subsection (2) the reference to the specified premises or any other property includes a reference to a part of those premises or that property.

(5) Despite the fact that in accordance with Schedule 6 no payment or only a nominal payment is payable by the nominee purchaser in respect of the acquisition by him of any interest he shall nevertheless be deemed for all purposes to be a purchaser of that interest for a valuable consideration in money or money’s worth.

Costs of enfranchisement

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(1) Where a notice is given under section 13, then (subject to the provisions of this section and sections 28(6), 29(7) and 31(5)) the nominee purchaser shall be liable, to the extent that they have been incurred in pursuance of the notice by the reversioner or by any other relevant landlord, for the reasonable costs of and incidental to any of the following matters, namely—

(a) any investigation reasonably undertaken—

(i) of the question whether any interest in the specified premises or other property is liable to acquisition in pursuance of the initial notice, or

(ii) of any other question arising out of that notice;

(b) deducing, evidencing and verifying the title to any such interest;

(d) any valuation of any interest in the specified premises or other property;

(e) any conveyance of any such interest;

but this subsection shall not apply to any costs if on a sale made voluntarily a stipulation that they were to be borne by the purchaser would be void.

(2) For the purposes of subsection (1) any costs incurred by the reversioner or any other relevant landlord in respect of professional services rendered by any person shall only be regarded as reasonable if and to the extent that costs in respect of such services might reasonably be expected to have been incurred by him if the circumstances had been such that he was personally liable for all such costs.

(3) Where by virtue of any provision of this Chapter the initial notice ceases to have effect at any time, then (subject to subsection (4)) the nominee purchaser’s liability under this section for costs incurred by any person shall be a liability for costs incurred by him down to that time.

(4) The nominee purchaser shall not be liable for any costs under this section if the initial notice ceases to have effect by virtue of section 23(4) or 30(4).

(5) The nominee purchaser shall not be liable under this section for any costs which a party to any proceedings under this Chapter before the appropriate tribunal incurs in connection with the proceedings.

(6) In this section references to the nominee purchaser include references to any person whose appointment has terminated in accordance with section 15(3) or 16(1); but this section shall have effect in relation to such a person subject to section 15(7).

(7) Where by virtue of this section, or of this section and section 29(6) taken together, two or more persons are liable for any costs, they shall be jointly and severally liable for them.

Completion of acquisition

Conveyance to nominee purchaser

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(1) Any conveyance executed for the purposes of this Chapter, being a conveyance to the nominee purchaser of the freehold of the specified premises , of a part of those premises or of any other property, shall grant to the nominee purchaser an estate in fee simple absolute in those premises , that part of those premises or that property, subject only to such incumbrances as may have been agreed or determined under this Chapter to be incumbrances subject to which that estate should be granted, having regard to the following provisions of this Chapter.

(2) Any such conveyance shall, where the nominee purchaser is to acquire any leasehold interest in the specified premises , the part of the specified premises or (as the case may be) in the other property to which the conveyance relates, provide for the disposal to the nominee purchaser of any such interest.

(3) Any conveyance executed for the purposes of this Chapter shall have effect under section 2(1) of the Law of Property Act 1925 (conveyances overreaching certain equitable interests etc.) to overreach any incumbrance capable of being overreached under section 2(1)—

(a) as if, where the interest conveyed is settled land for the purposes of the Settled Land Act 1925, the conveyance were made under the powers of that Act, and

(b) as if the requirements of section 2(1) as to payment of the capital money allowed any part of the purchase price paid or applied in accordance with section 35 below or Schedule 8 to this Act to be so paid or applied.

(4) For the purposes of this section “incumbrances” includes—

(a) rentcharges, and

(b) (subject to subsection (5)) personal liabilities attaching in respect of the ownership of land or an interest in land though not charged on that land or interest.

(5) Burdens originating in tenure, and burdens in respect of the upkeep or regulation for the benefit of any locality of any land, building, structure, works, ways or watercourse shall not be treated as incumbrances for the purposes of this section; but any conveyance executed for the purposes of this Chapter shall be made subject to any such burdens.

(6) A conveyance executed for the purposes of this Chapter shall not be made subject to any incumbrance capable of being overreached by the conveyance, but shall be made subject (where they are not capable of being overreached) to—

(a) rentcharges redeemable under sections 8 to 10 of the Rentcharges Act 1977, and

(b) those falling within paragraphs (c) and (d) of section 2(3) of that Act (estate rentcharges and rentcharges imposed under certain enactments),

except as otherwise provided by subsections (7) and (8) below.

(7) Where any land is to be conveyed to the nominee purchaser by a conveyance executed for the purposes of this Chapter, subsection (6) shall not preclude the person who owns the freehold interest in the land from releasing, or procuring the release of, the land from any rentcharge.

(8) The conveyance of any such land (“the relevant land”) may, with the agreement of the nominee purchaser (which shall not be unreasonably withheld), provide in accordance with section 190(1) of the Law of Property Act 1925 (charging of rentcharges on land without rent owner’s consent) that a rentcharge—

(a) shall be charged exclusively on other land affected by it in exoneration of the relevant land, or

(b) shall be apportioned between other land affected by it and the relevant land.

(9) Except to the extent that any departure is agreed to by the nominee purchaser and the person whose interest is to be conveyed, any conveyance executed for the purposes of this Chapter shall—

(a) as respects the conveyance of any freehold interest, conform with the provisions of Schedule 7, and

(b) as respects the conveyance of any leasehold interest, conform with the provisions of paragraph 2 of that Schedule (any reference in that paragraph to the freeholder being read as a reference to the person whose leasehold interest is to be conveyed , and with the reference to the covenants for title implied under Part I of the Law of Property (Miscellaneous Provisions) Act 1994 being read as excluding the covenant in section 4(1)(b) of that Act (compliance with terms of lease)).

(10) Any such conveyance shall in addition contain a statement that it is a conveyance executed for the purposes of this Chapter; and any such statement shall comply with such requirements as may be prescribed by land registration rules under the Land Registration Act 2002.

Discharge of existing mortgages on transfer to nominee purchaser

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(1) Subject to the provisions of Schedule 8, where any interest is acquired by the nominee purchaser in pursuance of this Chapter, the conveyance by virtue of which it is so acquired shall, as regards any mortgage to which this section applies, be effective by virtue of this section—

(a) to discharge the interest from the mortgage, and from the operation of any order made by a court for the enforcement of the mortgage, and

(b) to extinguish any term of years created for the purposes of the mortgage,

and shall do so without the persons entitled to or interested in the mortgage or in any such order or term of years becoming parties to or executing the conveyance.

(2) Subject to subsections (3) and (4), this section applies to any mortgage of the interest so acquired (however created or arising) which—

(a) is a mortgage to secure the payment of money or the performance of any other obligation by the person from whom the interest is so acquired or any other person; and

(b) is not a mortgage which would be overreached apart from this section.

(3) This section shall not apply to any such mortgage if it has been agreed between the nominee purchaser and the reversioner or (as the case may be) any other relevant landlord that the interest in question should be acquired subject to the mortgage.

(4) In this section and Schedule 8 “mortgage” includes a charge or lien; but neither this section nor that Schedule applies to a rentcharge.

Nominee purchaser required to grant leases back to former freeholder in certain circumstances

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(1) In connection with the acquisition by him of a freehold interest in the specified premises, the nominee purchaser shall grant to the person from whom the interest is acquired such leases of flats or other units contained in those premises as are required to be so granted by virtue of Part II or III of Schedule 9.

(2) Any such lease shall be granted so as to take effect immediately after the acquisition by the nominee purchaser of the freehold interest concerned.

(3) Where any flat or other unit demised under any such lease (“the relevant lease”) is at the time of that acquisition subject to any existing lease, the relevant lease shall take effect as a lease of the freehold reversion in respect of the flat or other unit.

(4) Part IV of Schedule 9 has effect with respect to the terms of a lease granted in pursuance of Part II or III of that Schedule.

Acquisition of interests from local authorities etc

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Schedule 10 to this Act (which makes provision with respect to the acquisition of interests from local authorities etc. in pursuance of this Chapter) shall have effect.

Supplemental

Interpretation of Chapter I

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(1) In this Chapter (unless the context otherwise requires)—

“appropriate tribunal” means—in relation to premises in England, the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal; andin relation to premises in Wales, a leasehold valuation tribunal.

“conveyance” includes assignment, transfer and surrender, and related expressions shall be construed accordingly;

“the initial notice” means the notice given under section 13;

“introductory standard contract” has the same meaning given by section 16 of the Renting Homes (Wales) Act 2016 (anaw 1);

“introductory tenancy” has the same meaning as in Chapter 1 of Part V of the Housing Act 1996,

“the nominee purchaser” shall be construed in accordance with section 15;

“the participating tenants” shall be construed in accordance with section 14;

“premises with a resident landlord” shall be construed in accordance with section 10;

“public sector landlord” means any of the persons listed in section 171(2) of the Housing Act 1985;

“qualifying tenant” shall be construed in accordance with section 5;

“the relevant date” has the meaning given by section 1(8);

“relevant landlord” and “the reversioner” shall be construed in accordance with section 9;

“the right to collective enfranchisement” means the right specified in section 1(1);

“secure contract” has the same meaning given by section 8 of the Renting Homes (Wales) Act 2016;

“secure tenancy” has the meaning given by section 79 of the Housing Act 1985;

“the specified premises” shall be construed in accordance with section 13(12);

“the terms of acquisition” has the meaning given by section 24(8);

“unit” means—a flat;any other separate set of premises which is constructed or adapted for use for the purposes of a dwelling; ora separate set of premises let, or intended for letting, on a business lease.

(2) Any reference in this Chapter (however expressed) to the acquisition or proposed acquisition by the nominee purchaser is a reference to the acquisition or proposed acquisition by the nominee purchaser, on behalf of the participating tenants, of such freehold and other interests as fall to be so acquired under a contract entered into in pursuance of the initial notice.

(3) Any reference in this Chapter to the interest of a relevant landlord in the specified premises is a reference to the interest in those premises by virtue of which he is, in accordance with section 9(2)(b) or (2A)(b), a relevant landlord.

(4) Any reference in this Chapter to agreement in relation to all or any of the terms of acquisition is a reference to agreement subject to contract.

Chapter II — INDIVIDUAL RIGHT OF TENANT OF FLAT TO ACQUIRE NEW LEASE

Preliminary

Right of qualifying tenant of flat to acquire new lease

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(1) This Chapter has effect for the purpose of conferring on a tenant of a flat, in the circumstances mentioned in subsection (2), the right, exercisable subject to and in accordance with this Chapter, to acquire a new lease of the flat on payment of a premium determined in accordance with this Chapter.

(2) Those circumstances are that on the relevant date for the purposes of this Chapter—

(a) the tenant has for the last two years been a qualifying tenant of the flat; . . .

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The following provisions, namely—

(a) section 5 (with the omission of subsections (5) and (6)),

(b) section 7, . . .

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

shall apply for the purposes of this Chapter as they apply for the purposes of Chapter I; and references in this Chapter to a qualifying tenant of a flat shall accordingly be construed by reference to those provisions.

(3A) On the death of a person who has for the two years before his death been a qualifying tenant of a flat, the right conferred by this Chapter is exercisable, subject to and in accordance with this Chapter, by his personal representatives; and, accordingly, in such a case references in this Chapter to the tenant shall, in so far as the context permits, be to the personal representatives.

(4) For the purposes of this Chapter a person can be (or be among those constituting) the qualifying tenant of each of two or more flats at the same time, whether he is tenant of those flats under one lease or under two or more separate leases.

(4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

(7) The right conferred by this Chapter on a tenant to acquire a new lease shall not extend to underlying minerals comprised in his existing lease if—

(a) the landlord requires the minerals to be excepted, and

(b) proper provision is made for the support of the premises demised by that existing lease as they are enjoyed on the relevant date.

(8) In this Chapter “the relevant date”, in relation to a claim by a tenant under this Chapter, means the date on which notice of the claim is given to the landlord under section 42.

The landlord for the purposes of this Chapter

40

(1) In this Chapter “the landlord”, in relation to the lease held by a qualifying tenant of a flat, means the person who is the owner of that interest in the flat which for the time being fulfils the following conditions, namely—

(a) it is an interest in reversion expectant (whether immediately or not) on the termination of the tenant’s lease, and

(b) it is either a freehold interest or a leasehold interest whose duration is such as to enable that person to grant a new lease of that flat in accordance with this Chapter,

and is not itself expectant (whether immediately or not) on an interest which fulfils those conditions.

(2) Where in accordance with subsection (1) the immediate landlord under the lease of a qualifying tenant of a flat is not the landlord in relation to that lease for the purposes of this Chapter, the person who for those purposes is the landlord in relation to it shall conduct on behalf of all the other landlords all proceedings arising out of any notice given by the tenant with respect to the flat under section 42 (whether the proceedings are for resisting or giving effect to the claim in question).

(3) Subsection (2) has effect subject to the provisions of Schedule 11 to this Act (which makes provision in relation to the operation of this Chapter in cases to which that subsection applies).

(4) In this section and that Schedule—

(a) “the tenant” means any such qualifying tenant as is referred to in subsection (2) and “the tenant’s lease” means the lease by virtue of which he is a qualifying tenant;

(b) “the competent landlord” means the person who, in relation to the tenant’s lease, is the landlord (as defined by subsection (1)) for the purposes of this Chapter;

(c) “other landlord” means any person (other than the tenant or a trustee for him) in whom there is vested a concurrent tenancy intermediate between the interest of the competent landlord and the tenant’s lease.

(5) Schedule 2 (which makes provision with respect to certain special categories of landlords) has effect for the purposes of this Chapter.

Preliminary inquiries by qualifying tenant

Right of qualifying tenant to obtain information about superior interests etc

41

(1) A qualifying tenant of a flat may give—

(a) to his immediate landlord, or

(b) to any person receiving rent on behalf of his immediate landlord,

a notice requiring the recipient to state whether the immediate landlord is the owner of the freehold interest in the flat and, if not, to give the tenant such information as is mentioned in subsection (2) (so far as known to the recipient).

(2) That information is—

(a) the name and address of the person who owns the freehold interest in the flat;

(b) the duration of the leasehold interest in the flat of the tenant’s immediate landlord and the extent of the premises in which it subsists; and

(c) the name and address of every person who has a leasehold interest in the flat which is superior to that of the tenant’s immediate landlord, the duration of any such interest and the extent of the premises in which it subsists.

(3) If the immediate landlord of any such qualifying tenant is not the owner of the freehold interest in the flat, the tenant may also—

(a) give to the person who is the owner of that interest a notice requiring him to give the tenant such information as is mentioned in paragraph (c) of subsection (2) (so far as known to that person);

(b) give to any person falling within that paragraph a notice requiring him to give the tenant—

(i) particulars of the duration of his leasehold interest in the flat and the extent of the premises in which it subsists, and

(ii) (so far as known to him) such information as is mentioned in paragraph (a) of that subsection and, as regards any other person falling within paragraph (c) of that subsection, such information as is mentioned in that paragraph.

(4) Any notice given by a qualifying tenant under this section shall, in addition to any other requirement imposed in accordance with subsections (1) to (3), require the recipient to state—

(a) whether he has received in respect of any premises containing the tenant’s flat—

(i) a notice under section 13 in the case of which the relevant claim under Chapter I is still current, or

(ii) a copy of such a notice; and

(b) if so, the date on which the notice under section 13 was given and the name and address of the nominee purchaser for the time being appointed for the purposes of section 15 in relation to that claim.

(5) For the purposes of subsection (4)—

(a) “the relevant claim under Chapter I”, in relation to a notice under section 13, means the claim in respect of which that notice is given; and

(b) any such claim is current if—

(i) that notice continues in force in accordance with section 13(11), or

(ii) a binding contract entered into in pursuance of that notice remains in force, or

(iii) where an order has been made under section 24(4)(a) or (b) or 25(6)(a) or (b) with respect to any such premises as are referred to in subsection (4)(a) above, any interests which by virtue of the order fall to be vested in the nominee purchaser for the purposes of Chapter I have yet to be so vested.

(6) Any person who is required to give any information by virtue of a notice under this section shall give that information to the qualifying tenant within the period of 28 days beginning with the date of the giving of the notice.

The tenant’s notice

Notice by qualifying tenant of claim to exercise right

42

(1) A claim by a qualifying tenant of a flat to exercise the right to acquire a new lease of the flat is made by the giving of notice of the claim under this section.

(2) A notice given by a tenant under this section (“the tenant’s notice”) must be given—

(a) to the landlord, and

(b) to any third party to the tenant’s lease.

(3) The tenant’s notice must—

(a) state the full name of the tenant and the address of the flat in respect of which he claims a new lease under this Chapter;

(b) contain the following particulars, namely—

(i) sufficient particulars of that flat to identify the property to which the claim extends,

(ii) such particulars of the tenant’s lease as are sufficient to identify it, including the date on which the lease was entered into, the term for which it was granted and the date of the commencement of the term,

(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) specify the premium which the tenant proposes to pay in respect of the grant of a new lease under this Chapter and, where any other amount will be payable by him in accordance with any provision of Schedule 13, the amount which he proposes to pay in accordance with that provision;

(d) specify the terms which the tenant proposes should be contained in any such lease;

(e) state the name of the person (if any) appointed by the tenant to act for him in connection with his claim, and an address in England and Wales at which notices may be given to any such person under this Chapter; and

(f) specify the date by which the landlord must respond to the notice by giving a counter-notice under section 45.

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

(4A) A notice under this section may not be given by the personal representatives of a tenant later than two years after the grant of probate or letters of administration.

(5) The date specified in the tenant’s notice in pursuance of subsection (3)(f) must be a date falling not less than two months after the date of the giving of the notice.

(6) Where a notice under this section has been given with respect to any flat, no subsequent notice may be given under this section with respect to the flat so long as the earlier notice continues in force.

(7) Where a notice under this section has been given with respect to a flat and—

(a) that notice has been withdrawn, or is deemed to have been withdrawn, under or by virtue of any provision of this Chapter, or

(b) in response to that notice, an order has been applied for and obtained under section 47(1),

no subsequent notice may be given under this section with respect to the flat within the period of twelve months beginning with the date of the withdrawal or deemed withdrawal of the earlier notice or with the time when the order under section 47(1) becomes final (as the case may be).

(8) Where a notice is given in accordance with this section, then for the purposes of this Chapter the notice continues in force as from the relevant date—

(a) until a new lease is granted in pursuance of the notice;

(b) if the notice is withdrawn, or is deemed to have been withdrawn, under or by virtue of any provision of this Chapter, until the date of the withdrawal or deemed withdrawal; or

but this subsection has effect subject to section 54.

(9) Schedule 12 (which contains restrictions on terminating a tenant’s lease where he has given a notice under this section and makes other provision in connection with the giving of notices under this section) shall have effect.

General provisions as respects effect of tenant’s notice

43

(1) Where a notice has been given under section 42 with respect to any flat, the rights and obligations of the landlord and the tenant arising from the notice shall enure for the benefit of and be enforceable against them, their personal representatives and assigns to the like extent (but no further) as rights and obligations arising under a contract for leasing freely entered into between the landlord and the tenant.

(2) Accordingly, in relation to matters arising out of any such notice, references in this Chapter to the landlord and the tenant shall, in so far as the context permits, include their respective personal representatives and assigns.

(3) Notwithstanding anything in subsection (1), the rights and obligations of the tenant shall be assignable with, but shall not be capable of subsisting apart from, the lease of the entire flat; and, if the tenant’s lease is assigned without the benefit of the notice, the notice shall accordingly be deemed to have been withdrawn by the tenant as at the date of the assignment.

(4) In the event of any default by the landlord or the tenant in carrying out the obligations arising from the tenant’s notice, the other of them shall have the like rights and remedies as in the case of a contract freely entered into.

(5) In a case to which section 40(2) applies, the rights and obligations of the landlord arising out of the tenant’s notice shall, so far as their interests are affected, be rights and obligations respectively of the competent landlord and of each of the other landlords, and references to the landlord in subsections (1) and (2) above shall apply accordingly.

(6) In subsection (5) “competent landlord” and “other landlord” have the meaning given by section 40(4); and subsection (5) has effect without prejudice to the operation of section 40(2) or Schedule 11.

Procedure following giving of tenant’s notice

Access by landlords for valuation purposes

44

(1) Once the tenant’s notice or a copy of it has been given in accordance with section 42 or Part I of Schedule 11—

(a) to the landlord for the purposes of this Chapter, or

(b) to any other landlord (as defined by section 40(4)),

that landlord and any person authorised to act on his behalf shall have a right of access to the flat to which the notice relates for the purpose of enabling that landlord to obtain, in connection with the notice, a valuation of his interest in the flat.

(2) That right shall be exercisable at any reasonable time and on giving not less than 3 days’ notice to the tenant.

Landlord’s counter-notice

45

(1) The landlord shall give a counter-notice under this section to the tenant by the date specified in the tenant’s notice in pursuance of section 42(3)(f).

(2) The counter-notice must comply with one of the following requirements—

(a) state that the landlord admits that the tenant had on the relevant date the right to acquire a new lease of his flat;

(b) state that, for such reasons as are specified in the counter-notice, the landlord does not admit that the tenant had such a right on that date;

(c) contain such a statement as is mentioned in paragraph (a) or (b) above but state that the landlord intends to make an application for an order under section 47(1) on the grounds that he intends to redevelop any premises in which the flat is contained.

(3) If the counter-notice complies with the requirement set out in subsection (2)(a), it must in addition—

(a) state which (if any) of the proposals contained in the tenant’s notice are accepted by the landlord and which (if any) of those proposals are not so accepted; and

(b) specify, in relation to each proposal which is not accepted, the landlord’s counter-proposal.

(4) The counter-notice must specify an address in England and Wales at which notices may be given to the landlord under this Chapter.

(5) Where the counter-notice admits the tenant’s right to acquire a new lease of his flat, the admission shall be binding on the landlord as to the matters mentioned in section 39(2)(a) . . . , unless the landlord shows that he was induced to make the admission by misrepresentation or the concealment of material facts; but the admission shall not conclude any question whether the particulars of the flat stated in the tenant’s notice in pursuance of section 42(3)(b)(i) are correct.

Applications to court or ... tribunal

Proceedings relating to validity of tenant’s notice

46

(1) Where—

(a) the landlord has given the tenant a counter-notice under section 45 which (whether it complies with the requirement set out in subsection (2)(b) or (c) of that section) contains such a statement as is mentioned in subsection (2)(b) of that section, and

(b) the court is satisfied, on an application made by the landlord, that on the relevant date the tenant had no right under this Chapter to acquire a new lease of his flat,

the court shall by order make a declaration to that effect.

(2) Any application for an order under subsection (1) must be made not later than the end of the period of two months beginning with the date of the giving of the counter-notice to the tenant; and if, in a case falling within paragraph (a) of that subsection, either—

(a) no application for such an order is made by the landlord within that period, or

(b) such an application is so made but is subsequently withdrawn,

section 49 shall apply as if the landlord had not given the counter-notice.

(3) If on any such application the court makes such a declaration as is mentioned in subsection (1), the tenant’s notice shall cease to have effect on the order becoming final.

(4) If, however, any such application is dismissed by the court, then (subject to subsection (5)) the court shall make an order—

(a) declaring that the landlord’s counter-notice shall be of no effect, and

(b) requiring the landlord to give a further counter-notice to the tenant by such date as is specified in the order.

(5) Subsection (4) shall not apply if—

(a) the counter-notice complies with the requirement set out in section 45(2)(c), and

(b) either—

(i) an application for an order under section 47(1) is pending, or

(ii) the period specified in section 47(3) as the period for the making of such an application has not expired.

(6) Subsection (3) of section 45 shall apply to any further counter-notice required to be given by the landlord under subsection (4) above as if it were a counter-notice under that section complying with the requirement set out in subsection (2)(a) of that section.

Application to defeat tenant’s claim where landlord intends to redevelop

47

(1) Where the landlord has given the tenant a counter-notice under section 45 which complies with the requirement set out in subsection (2)(c) of that section, the court may, on the application of the landlord, by order declare that the right to acquire a new lease shall not be exercisable by the tenant by reason of the landlord’s intention to redevelop any premises in which the tenant’s flat is contained; and on such an order becoming final the tenant’s notice shall cease to have effect.

(2) The court shall not make an order under subsection (1) unless it is satisfied—

(a) that the tenant’s lease of his flat is due to terminate within the period of five years beginning with the relevant date; and

(b) that for the purposes of redevelopment the landlord intends, once the lease has so terminated—

(i) to demolish or reconstruct, or

(ii) to carry out substantial works of construction on,

the whole or a substantial part of any premises in which the flat is contained; and

(3) Any application for an order under subsection (1) must be made within the period of two months beginning with the date of the giving of the counter-notice to the tenant; but, where the counter-notice is one falling within section 46(1)(a), such an application shall not be proceeded with until such time (if any) as any order dismissing an application under section 46(1) becomes final.

(4) Where an application for an order under subsection (1) is dismissed by the court, the court shall make an order—

(a) declaring that the landlord’s counter-notice shall be of no effect, and

(b) requiring the landlord to give a further counter-notice to the tenant by such date as is specified in the order.

(5) Where—

(a) the landlord has given such a counter-notice as is mentioned in subsection (1), but

(b) either—

(i) no application for an order under that subsection is made within the period referred to in subsection (3), or

(ii) such an application is so made but is subsequently withdrawn,

then (subject to subsection (7)), the landlord shall give a further counter-notice to the tenant within the period of two months beginning with the appropriate date.

(6) In subsection (5) “the appropriate date” means—

(a) if subsection (5)(b)(i) applies, the date immediately following the end of the period referred to in subsection (3); and

(b) if subsection (5)(b)(ii) applies, the date of withdrawal of the application.

(7) Subsection (5) shall not apply if any application has been made by the landlord for an order under section 46(1).

(8) Subsection (3) of section 45 shall apply to any further counter-notice required to be given by the landlord under subsection (4) or (5) above as if it were a counter-notice under that section complying with the requirement set out in subsection (2)(a) of that section.

Applications where terms in dispute or failure to enter into new lease

48

(1) Where the landlord has given the tenant—

(a) a counter-notice under section 45 which complies with the requirement set out in subsection (2)(a) of that section, or

(b) a further counter-notice required by or by virtue of section 46(4) or section 47(4) or (5),

but any of the terms of acquisition remain in dispute at the end of the period of two months beginning with the date when the counter-notice or further counter-notice was so given, the appropriate tribunal may, on the application of either the tenant or the landlord, determine the matters in dispute.

(2) Any application under subsection (1) must be made not later than the end of the period of six months beginning with the date on which the counter-notice or further counter-notice was given to the tenant.

(3) Where—

(a) the landlord has given the tenant such a counter-notice or further counter-notice as is mentioned in subsection (1)(a) or (b), and

(b) all the terms of acquisition have been either agreed between those persons or determined by the appropriate tribunal under subsection (1),

but a new lease has not been entered into in pursuance of the tenant’s notice by the end of the appropriate period specified in subsection (6), the court may, on the application of either the tenant or the landlord, make such order as it thinks fit with respect to the performance or discharge of any obligations arising out of that notice.

(4) Any such order may provide for the tenant’s notice to be deemed to have been withdrawn at the end of the appropriate period specified in subsection (6).

(5) Any application for an order under subsection (3) must be made not later than the end of the period of two months beginning immediately after the end of the appropriate period specified in subsection (6).

(6) For the purposes of this section the appropriate period is—

(a) where all of the terms of acquisition have been agreed between the tenant and the landlord, the period of two months beginning with the date when those terms were finally so agreed; or

(b) where all or any of those terms have been determined by the appropriate tribunal under subsection (1)—

(i) the period of two months beginning with the date when the decision of the tribunal under subsection (1) becomes final, or

(ii) such other period as may have been fixed by the tribunal when making its determination.

(7) In this Chapter “the terms of acquisition”, in relation to a claim by a tenant under this Chapter, means the terms on which the tenant is to acquire a new lease of his flat, whether they relate to the terms to be contained in the lease or to the premium or any other amount payable by virtue of Schedule 13 in connection with the grant of the lease, or otherwise.

Applications where landlord fails to give counter-notice or further counter-notice

49

(1) Where the tenant’s notice has been given in accordance with section 42 but—

(a) the landlord has failed to give the tenant a counter-notice in accordance with section 45(1), or

(b) if required to give a further counter-notice to the tenant by or by virtue of section 46(4) or section 47(4) or (5), the landlord has failed to comply with that requirement,

the court may, on the application of the tenant, make an order determining, in accordance with the proposals contained in the tenant’s notice, the terms of acquisition.

(2) The court shall not make such an order on an application made by virtue of paragraph (a) of subsection (1) unless it is satisfied—

(a) that on the relevant date the tenant had the right to acquire a new lease of his flat; and

(b) if applicable, that the requirements of Part I of Schedule 11 were complied with as respects the giving of copies of the tenant’s notice.

(3) Any application for an order under subsection (1) must be made not later than the end of the period of six months beginning with the date by which the counter-notice or further counter-notice referred to in that subsection was required to be given.

(4) Where—

(a) the terms of acquisition have been determined by an order of the court under this section, but

(b) a new lease has not been entered into in pursuance of the tenant’s notice by the end of the appropriate period specified in subsection (7),

the court may, on the application of either the tenant or the landlord, make such order as it thinks fit with respect to the performance or discharge of any obligations arising out of that notice.

(5) Any such order may provide for the tenant’s notice to be deemed to have been withdrawn at the end of the appropriate period specified in subsection (7).

(6) Any application for an order under subsection (4) must be made not later than the end of the period of two months beginning immediately after the end of the appropriate period specified in subsection (7).

(7) For the purposes of this section the appropriate period is—

(a) the period of two months beginning with the date when the order of the court under subsection (1) becomes final, or

(b) such other period as may have been fixed by the court when making that order.

Applications where landlord cannot be found

50

(1) Where—

(a) a qualifying tenant of a flat desires to make a claim to exercise the right to acquire a new lease of his flat, but

(b) the landlord cannot be found or his identity cannot be ascertained,

the court may, on the application of the tenant, make a vesting order under this subsection.

(2) Where—

(a) a qualifying tenant of a flat desires to make such a claim as is mentioned in subsection (1), and

(b) paragraph (b) of that subsection does not apply, but

(c) a copy of a notice of that claim cannot be given in accordance with Part I of Schedule 11 to any person to whom it would otherwise be required to be so given because that person cannot be found or his identity cannot be ascertained,

the court may, on the application of the tenant, make an order dispensing with the need to give a copy of such a notice to that person.

(3) The court shall not make an order on any application under subsection (1) or (2) unless it is satisfied—

(a) that on the date of the making of the application the tenant had the right to acquire a new lease of his flat; and

(b) that on that date he would not have been precluded by any provision of this Chapter from giving a valid notice under section 42 with respect to his flat.

(4) Before making any such order the court may require the tenant to take such further steps by way of advertisement or otherwise as the court thinks proper for the purpose of tracing the person in question; and if, after an application is made for a vesting order under subsection (1) and before any lease is executed in pursuance of the application, the landlord is traced, then no further proceedings shall be taken with a view to a lease being so executed, but (subject to subsection (5))—

(a) the rights and obligations of all parties shall be determined as if the tenant had, at the date of the application, duly given notice under section 42 of his claim to exercise the right to acquire a new lease of his flat; and

(b) the court may give such directions as the court thinks fit as to the steps to be taken for giving effect to those rights and obligations, including directions modifying or dispensing with any of the requirements of this Chapter or of regulations made under this Part.

(5) An application for a vesting order under subsection (1) may be withdrawn at any time before execution of a lease under section 51(3) and, after it is withdrawn, subsection (4)(a) above shall not apply; but where any step is taken (whether by the landlord or the tenant) for the purpose of giving effect to subsection (4)(a) in the case of any application, the application shall not afterwards be withdrawn except—

(a) with the consent of the landlord, or

(b) by leave of the court,

and the court shall not give leave unless it appears to the court just to do so by reason of matters coming to the knowledge of the tenant in consequence of the tracing of the landlord.

(6) Where an order has been made under subsection (2) dispensing with the need to give a copy of a notice under section 42 to a particular person with respect to any flat, then if—

(a) a notice is subsequently given under that section with respect to that flat, and

(b) in reliance on the order, a copy of the notice is not to be given to that person,

the notice must contain a statement of the effect of the order.

(7) Where a notice under section 42 contains such a statement in accordance with subsection (6) above, then in determining for the purposes of any provision of this Chapter whether the requirements of Part I of Schedule 11 have been complied with in relation to the notice, those requirements shall be deemed to have been complied with so far as relating to the giving of a copy of the notice to the person referred to in subsection (6) above.

Supplementary provisions relating to vesting orders under section 50(1)

51

(1) A vesting order under section 50(1) is an order providing for the surrender of the tenant’s lease of his flat and for the granting to him of a new lease of it on such terms as may be determined by the appropriate tribunal to be appropriate with a view to the lease being granted to him in like manner (so far as the circumstances permit) as if he had, at the date of his application, given notice under section 42 of his claim to exercise the right to acquire a new lease of his flat.

(2) If the appropriate tribunal so determines in the case of a vesting order under section 50(1), the order shall have effect in relation to property which is less extensive than that specified in the application on which the order was made.

(3) Where any lease is to be granted to a tenant by virtue of a vesting order under section 50(1), then on his paying into court the appropriate sum there shall be executed by such person as the court may designate a lease which—

(a) is in a form approved by the appropriate tribunal, and

(b) contains such provisions as may be so approved for the purpose of giving effect so far as possible to section 56(1) and section 57 (as that section applies in accordance with subsections (7) and (8) below);

and that lease shall be effective to vest in the person to whom it is granted the property expressed to be demised by it, subject to and in accordance with the terms of the lease.

(4) In connection with the determination by the appropriate tribunal of any question as to the property to be demised by any such lease, or as to the rights with or subject to which it is to be demised, it shall be assumed (unless the contrary is shown) that the landlord has no interest in property other than the property to be demised and, for the purpose of excepting them from the lease, any minerals underlying that property.

(5) The appropriate sum to be paid into court in accordance with subsection (3) is the aggregate of—

(a) such amount as may be determined by the appropriate tribunal to be the premium which is payable under Schedule 13 in respect of the grant of the new lease;

(b) such other amount or amounts (if any) as may be determined by such a tribunal to be payable by virtue of that Schedule in connection with the grant of that lease; and

(c) any amounts or estimated amounts determined by such a tribunal as being, at the time of execution of that lease, due to the landlord from the tenant (whether due under or in respect of the tenant’s lease of his flat or under or in respect of any agreement collateral thereto).

(6) Where any lease is granted to a person in accordance with this section, the payment into court of the appropriate sum shall be taken to have satisfied any claims against the tenant, his personal representatives or assigns in respect of the premium and any other amounts payable as mentioned in subsection (5)(a) and (b).

(7) Subject to subsection (8), the following provisions, namely—

(a) sections 57 to 59, and

(b) section 61 and Schedule 14,

shall, so far as capable of applying to a lease granted in accordance with this section, apply to such a lease as they apply to a lease granted under section 56; and subsections (6) and (7) of that section shall apply in relation to a lease granted in accordance with this section as they apply in relation to a lease granted under that section.

(8) In its application to a lease granted in accordance with this section—

(a) section 57 shall have effect as if—

(i) any reference to the relevant date were a reference to the date of the application under section 50(1) in pursuance of which the vesting order under that provision was made, and

(ii) in subsection (5) the reference to section 56(3)(a) were a reference to subsection (5)(c) above; and

(b) section 58 shall have effect as if—

(i) in subsection (3) the second reference to the landlord were a reference to the person designated under subsection (3) above, and

(ii) subsections (6)(a) and (7) were omitted.

Termination or suspension of acquisition procedures

Withdrawal by tenant from acquisition of new lease

52

(1) At any time before a new lease is entered into in pursuance of the tenant’s notice, the tenant may withdraw that notice by the giving of a notice to that effect under this section (“a notice of withdrawal”).

(2) A notice of withdrawal must be given—

(a) to the landlord for the purposes of this Chapter;

(b) to every other landlord (as defined by section 40(4)); and

(3) Where a notice of withdrawal is given by the tenant to any person in accordance with subsection (2), the tenant’s liability under section 60 for costs incurred by that person shall be a liability for costs incurred by him down to the time when the notice is given to him.

Deemed withdrawal of tenant’s notice

53

(1) Where—

(a) in a case to which subsection (1) of section 48 applies, no application under that subsection is made within the period specified in subsection (2) of that section, or

(b) in a case to which subsection (3) of that section applies, no application for an order under that subsection is made within the period specified in subsection (5) of that section,

the tenant’s notice shall be deemed to have been withdrawn at the end of the period referred to in paragraph (a) or (b) above (as the case may be).

(2) Where, in a case falling within paragraph (a) or (b) of subsection (1) of section 49, no application for an order under that subsection is made within the period specified in subsection (3) of that section, the tenant’s notice shall be deemed to have been withdrawn at the end of that period.

(3) Where, in a case to which subsection (4) of section 49 applies, no application for an order under that subsection is made within the period specified in subsection (6) of that section, the tenant’s notice shall be deemed to have been withdrawn at the end of that period.

(4) The following provisions, namely—

(a) section 43(3),

(b) section 48(4), and

also make provision for a notice under section 42 to be deemed to have been withdrawn at a particular time.

Suspension of tenant’s notice during currency of claim under Chapter I

54

(1) If, at the time when the tenant’s notice is given—

(a) a notice has been given under section 13 with respect to any premises containing the tenant’s flat, and

(b) the relevant claim under Chapter I is still current,

the operation of the tenant’s notice shall be suspended during the currency of that claim; and so long as it is so suspended no further notice shall be given, and no application shall be made, under this Chapter with a view to resisting or giving effect to the tenant’s claim.

(2) If, at any time when the tenant’s notice continues in force, a notice is given under section 13 with respect to any premises containing the tenant’s flat, then, as from the date which is the relevant date for the purposes of Chapter I in relation to that notice under section 13, the operation of the tenant’s notice shall be suspended during the currency of the relevant claim under Chapter I; and so long as it is so suspended no further notice shall be given, and no application shall be made or proceeded with, under this Chapter with a view to resisting or giving effect to the tenant’s claim.

(3) Where the operation of the tenant’s notice is suspended by virtue of subsection (1) or (2), the landlord shall give the tenant a notice informing him of its suspension—

(a) (if it is suspended by virtue of subsection (1)) not later than the date specified in the tenant’s notice in pursuance of section 42(3)(f); or

(b) (if it is suspended by virtue of subsection (2)) as soon as possible after the date referred to in that subsection;

and any such notice shall in addition inform the tenant of the date on which the notice under section 13 was given and of the name and address of the nominee purchaser for the time being appointed for the purposes of section 15 in relation to the relevant claim under Chapter I.

(4) Where—

(a) the operation of the tenant’s notice is suspended by virtue of subsection (1), and

(b) as a result of the relevant claim under Chapter I ceasing to be current, the operation of the tenant’s notice subsequently ceases to be so suspended and the tenant’s notice thereupon continues in force in accordance with section 42(8),

then, as from the date when that claim ceases to be current (“the termination date”), this Chapter shall apply as if there were substituted for the date specified in the tenant’s notice in pursuance of section 42(3)(f) such date as results in the period of time intervening between the termination date and that date being equal to the period of time intervening between the relevant date and the date originally so specified.

(5) Where—

(a) the operation of the tenant’s notice is suspended by virtue of subsection (2), and

(b) its suspension began in circumstances falling within subsection (6), and

(c) as a result of the relevant claim under Chapter I ceasing to be current, the operation of the tenant’s notice subsequently ceases to be so suspended and the tenant’s notice thereupon continues in force in accordance with section 42(8),

any relevant period shall be deemed to have begun on the date when that claim ceases to be current.

(6) The circumstances referred to in subsection (5)(b) are that the suspension of the operation of the tenant’s notice began—

(a) before the date specified in the tenant’s notice in pursuance of section 42(3)(f) and before the landlord had given the tenant a counter-notice under section 45; or

(b) after the landlord had given the tenant a counter-notice under section 45 complying with the requirement set out in subsection (2)(b) or (c) of that section but—

(i) before any application had been made for an order under section 46(1) or 47(1), and

(ii) before the period for making any such application had expired; or

(i) before the landlord had given the tenant a further counter-notice in accordance with the order, and

(ii) before the period for giving any such counter-notice had expired.

(7) Where—

(a) the operation of the tenant’s notice is suspended by virtue of subsection (2), and

(b) its suspension began otherwise than in circumstances falling within subsection (6), and

(c) as a result of the relevant claim under Chapter I ceasing to be current, the operation of the tenant’s notice subsequently ceases to be so suspended and the tenant’s notice thereupon continues in force in accordance with section 42(8),

any relevant period shall be deemed to have begun on the date on which the tenant is given a notice under subsection (8) below or, if earlier, the date on which the tenant gives the landlord a notice informing him of the circumstances by virtue of which the operation of the tenant’s notice has ceased to be suspended.

(8) Where subsection (4), (5) or (7) applies, the landlord shall, as soon as possible after becoming aware of the circumstances by virtue of which the operation of the tenant’s notice has ceased to be suspended as mentioned in that subsection, give the tenant a notice informing him that, as from the date when the relevant claim under Chapter I ceased to be current, the operation of his notice is no longer suspended.

(9) Subsection (8) shall not, however, require the landlord to give any such notice if he has received a notice from the tenant under subsection (7).

(10) In subsections (5) and (7) “relevant period” means any period which—

(a) is prescribed by or under this Part for the giving of any notice, or the making of any application, in connection with the tenant’s notice; and

(b) was current at the time when the suspension of the operation of the tenant’s notice began.

(11) For the purposes of this section—

(a) “the relevant claim under Chapter I”, in relation to a notice under section 13, means the claim in respect of which that notice is given; and

(b) any such claim is current if—

(i) that notice continues in force in accordance with section 13(11), or

(ii) a binding contract entered into in pursuance of that notice remains in force, or

(iii) where an order has been made under section 24(4)(a) or (b) or 25(6)(a) or (b) with respect to any such premises as are referred to in subsection (1) or (2) above (as the case may be), any interests which by virtue of the order fall to be vested in the nominee purchaser for the purposes of Chapter I have yet to be so vested.

Effect on tenant’s notice of institution of compulsory acquisition procedures

55

(1) A notice given by a tenant under section 42 shall be of no effect if on the relevant date—

(a) any person or body of persons who has or have been, or could be, authorised to acquire the whole or part of the tenant’s flat compulsorily for any purpose has or have, with a view to its acquisition for that purpose—

(i) served notice to treat on the landlord or the tenant, or

(ii) entered into a contract for the purchase of the interest of either of them in the flat or part of it, and

(b) the notice to treat or contract remains in force.

(2) A notice given by a tenant under section 42 shall cease to have effect if, before a new lease is entered into in pursuance of it, any such person or body of persons as is mentioned in subsection (1) serves or serve notice to treat as mentioned in that subsection.

(3) Where subsection (2) applies in relation to a notice given by a tenant under section 42, then on the occasion of the compulsory acquisition in question the compensation payable in respect of any interest in the tenant’s flat (whether or not the one to which the relevant notice to treat relates) shall be determined on the basis of the value of the interest subject to and with the benefit of the rights and obligations arising from the tenant’s notice and affecting that interest.

Grant of new lease

Obligation to grant new lease

56

(1) Where a qualifying tenant of a flat has under this Chapter a right to acquire a new lease of the flat and gives notice of his claim in accordance with section 42, then except as provided by this Chapter the landlord shall be bound to grant to the tenant, and the tenant shall be bound to accept—

(a) in substitution for the existing lease, and

(b) on payment of the premium payable under Schedule 13 in respect of the grant,

a new lease of the flat at a peppercorn rent for a term expiring 90 years after the term date of the existing lease.

(2) In addition to any such premium there shall be payable by the tenant in connection with the grant of any such new lease such amounts to the owners of any intermediate leasehold interests (within the meaning of Schedule 13) as are so payable by virtue of that Schedule.

(3) A tenant shall not be entitled to require the execution of any such new lease otherwise than on tendering to the landlord, in addition to the amount of any such premium and any other amounts payable by virtue of Schedule 13, the amount so far as ascertained—

(a) of any sums payable by him by way of rent or recoverable from him as rent in respect of the flat up to the date of tender;

(b) of any sums for which at that date the tenant is liable under section 60 in respect of costs incurred by any relevant person (within the meaning of that section); and

and, if the amount of any such sums is not or may not be fully ascertained, on offering reasonable security for the payment of such amount as may afterwards be found to be payable in respect of them.

(4) To the extent that any amount tendered to the landlord in accordance with subsection (3) is an amount due to a person other than the landlord, that amount shall be payable to that person by the landlord; and that subsection has effect subject to paragraph 7(2) of Schedule 11.

(5) No provision of any lease prohibiting, restricting or otherwise relating to a sub-demise by the tenant under the lease shall have effect with reference to the granting of any lease under this section.

(6) It is hereby declared that nothing in any of the provisions specified in paragraph 1(2) of Schedule 10 (which impose requirements as to consent or consultation or other restrictions in relation to disposals falling within those provisions) applies to the granting of any lease under this section.

(7) For the purposes of subsection (6), paragraph 1(2) of Schedule 10 has effect as if the reference to section 79(2) of the Housing Act 1988 (which is not relevant in the context of subsection (6)) were omitted.

Terms on which new lease is to be granted

57

(1) Subject to the provisions of this Chapter (and in particular to the provisions as to rent and duration contained in section 56(1)), the new lease to be granted to a tenant under section 56 shall be a lease on the same terms as those of the existing lease, as they apply on the relevant date, but with such modifications as may be required or appropriate to take account—

(a) of the omission from the new lease of property included in the existing lease but not comprised in the flat;

(b) of alterations made to the property demised since the grant of the existing lease; or

(c) in a case where the existing lease derives (in accordance with section 7(6) as it applies in accordance with section 39(3)) from more than one separate leases, of their combined effect and of the differences (if any) in their terms.

(2) Where during the continuance of the new lease the landlord will be under any obligation for the provision of services, or for repairs, maintenance or insurance—

(a) the new lease may require payments to be made by the tenant (whether as rent or otherwise) in consideration of those matters or in respect of the cost thereof to the landlord; and

(b) (if the terms of the existing lease do not include any provision for the making of any such payments by the tenant or include provision only for the payment of a fixed amount) the terms of the new lease shall make, as from the term date of the existing lease, such provision as may be just—

(i) for the making by the tenant of payments related to the cost from time to time to the landlord, and

(ii) for the tenant’s liability to make those payments to be enforceable by re-entry or otherwise (subject to section 85 of the Tribunals, Courts and Enforcement Act 2007) in like manner as if it were a liability for payment of rent.

(3) Subject to subsection (4), provision shall be made by the terms of the new lease or by an agreement collateral thereto for the continuance, with any suitable adaptations, of any agreement collateral to the existing lease.

(4) For the purposes of subsections (1) and (3) there shall be excluded from the new lease any term of the existing lease or of any agreement collateral thereto in so far as that term—

(a) provides for or relates to the renewal of the lease,

(b) confers any option to purchase or right of pre-emption in relation to the flat demised by the existing lease, or

(c) provides for the termination of the existing lease before its term date otherwise than in the event of a breach of its terms;

and there shall be made in the terms of the new lease or any agreement collateral thereto such modifications as may be required or appropriate to take account of the exclusion of any such term.

(5) Where the new lease is granted after the term date of the existing lease, then on the grant of the new lease there shall be payable by the tenant to the landlord, as an addition to the rent payable under the existing lease, any amount by which, for the period since the term date or the relevant date (whichever is the later), the sums payable to the landlord in respect of the flat (after making any necessary apportionment) for the matters referred to in subsection (2) fall short in total of the sums that would have been payable for such matters under the new lease if it had been granted on that date; and section 56(3)(a) shall apply accordingly.

(6) Subsections (1) to (5) shall have effect subject to any agreement between the landlord and tenant as to the terms of the new lease or any agreement collateral thereto; and either of them may require that for the purposes of the new lease any term of the existing lease shall be excluded or modified in so far as—

(a) it is necessary to do so in order to remedy a defect in the existing lease; or

(b) it would be unreasonable in the circumstances to include, or include without modification, the term in question in view of changes occurring since the date of commencement of the existing lease which affect the suitability on the relevant date of the provisions of that lease.

(7) The terms of the new lease shall—

(a) make provision in accordance with section 59(3); and

(b) reserve to the person who is for the time being the tenant’s immediate landlord the right to obtain possession of the flat in question in accordance with section 61.

(8) In granting the new lease the landlord shall not be bound to enter into any covenant for title beyond—

(a) those implied from the grant, and

(b) those implied under Part I of the Law of Property (Miscellaneous Provisions) Act 1994 in a case where a disposition is expressed to be made with limited title guarantee, but not including (in the case of an underlease) the covenant in section 4(1)(b) of that Act (compliance with terms of lease);

and in the absence of agreement to the contrary the landlord shall be entitled to be indemnified by the tenant in respect of any costs incurred by him in complying with the covenant implied by virtue of section 2(1)(b) of that Act (covenant for further assurance).

(8A) A person entering into any covenant required of him as landlord (under subsection (8) or otherwise) shall be entitled to limit his personal liability to breaches of that covenant for which he is responsible.

(9) Where any person—

(a) is a third party to the existing lease, or

(b) (not being the landlord or tenant) is a party to any agreement collateral thereto,

then (subject to any agreement between him and the landlord and the tenant) he shall be made a party to the new lease or (as the case may be) to an agreement collateral thereto, and shall accordingly join in its execution; but nothing in this section has effect so as to require the new lease or (as the case may be) any such collateral agreement to provide for him to discharge any function at any time after the term date of the existing lease.

(10) Where—

(a) any such person (“the third party”) is in accordance with subsection (9) to discharge any function down to the term date of the existing lease, but

(b) it is necessary or expedient in connection with the proper enjoyment by the tenant of the property demised by the new lease for provision to be made for the continued discharge of that function after that date,

the new lease or an agreement collateral thereto shall make provision for that function to be discharged after that date (whether by the third party or by some other person).

(11) The new lease shall contain a statement that it is a lease granted under section 56; and any such statement shall comply with such requirements as may be prescribed by land registration rules under the Land Registration Act 2002.

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