The Housing (Right to Acquire) Regulations 1997

• (1) Where, in the case of a tenancy or sub-tenancy to which this section applies, the tenant exercises his right to acquire the freehold under Part I of the Leasehold Reform Act 1967, the price payable for the dwelling-house shall be determined in accordance with section 9(1A) of that Act notwithstanding that the circumstances specified in that section do not apply.

• (2) This section applies to a tenancy created by the grant of a lease in pursuance of this Part of a dwelling-house which is a house.

• (3) Where Part I of the 1967 Act applies as if there had been a single tenancy granted for a term beginning at the same time as the term under a tenancy falling within subsection (2) and expiring at the same time as the term under a later tenancy, this section also applies to that later tenancy.

• (4) This section applies to any sub-tenancy directly or indirectly derived out of a tenancy falling within subsection (2) or (3).

• (5) This section also applies to a tenancy granted in substitution for a tenancy or sub-tenancy falling within subsections (2) to (4) in pursuance of Part I of the 1967 Act.

Supplementary provisions

Notices

176

• (3) A notice under this Part may be served by sending it by post.

• (4) A notice to be served by the tenant on the landlord under this Part may be served by leaving it at, or sending it to, the principal office of the landlord or the office of the landlord with which the tenant usually deals.

Costs

178

An agreement between the landlord and a tenant claiming to exercise the right to acquire is void in so far as it purports to oblige the tenant to bear any part of the costs incurred by the landlord in connection with the tenant’s exercise of that right.

Provisions restricting right to acquire etc. of no effect

179

• (1) A provision of a lease held by the landlord or a superior landlord, or of an agreement (whenever made), is void in so far as it purports to prohibit or restrict—

• (a) the grant of a lease in pursuance of the right to acquire, or

• (b) the subsequent disposal (whether by way of assignment, sub-lease or otherwise) of a lease so granted,

or to authorise a forfeiture, or impose on the landlord or superior landlord a penalty or disability, in the event of such a grant or disposal.

Statutory declarations

180

A landlord may, if the landlord thinks fit, accept a statutory declaration made for the purposes of this Part as sufficient evidence of the matters declared in it.

Jurisdiction of county court

181

• (1) A county court has jurisdiction—

• (a) to entertain any proceedings brought under this Part, and

• (b) to determine any question arising under this Part;

but subject to section 128 (which provides for matters of valuation to be determined by the district valuer).

• (2) The jurisdiction conferred by this section includes jurisdiction to entertain proceedings on any such question as is mentioned in subsection (1)(b) 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) The Lord Chancellor may make such rules and give such directions as he thinks fit for the purpose of giving effect to this section; and such rules or directions may provide—

• (a) for the exercise by a registrar of a county court of any jurisdiction exercisable under this section, and

• (b) for the conduct of proceedings in private.

• (5) The power to make rules under this section is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Meaning of “house”, “flat” and “dwelling-house”

183

• (1) The following provisions apply to the interpretation of “house”, “flat” and “dwelling-house” when used in this Part.

• (2) A dwelling-house is a house if, and only if, it (or so much of it as does not consist of land included by virtue of section 184) is a structure reasonably so called; so that—

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

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

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

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

Land let with or used for purposes of dwelling-house

184

• (1) For the purpose of this Part land let together with a dwelling-house shall be treated as part of the dwelling-house, unless the land is agricultural land (within the meaning set out in section 26(3)(a) of the General Rate Act 1967) exceeding two acres.

• (2) There shall be treated as included in a dwelling-house any land which is not within subsection (1) but is or has been used for the purpose of the dwelling-house if—

• (a) the tenant, by written notice served on the landlord at any time before he exercises the right to acquire requires the land to be included in the dwelling-house, and

• (b) it is reasonable in all the circumstances for the land to be so included.

• (3) A notice under subsection (2) may be withdrawn by a written notice served on the landlord at any time before the tenant exercises the right to acquire.

• (4) Where a notice under subsection (2) is served or withdrawn after the service of the notice under section 125 (landlord’s notice of purchase price, etc), the parties shall, as soon as practicable after the service or withdrawal, take all such steps (whether by way of amending, withdrawing or re-serving any notice or extending any period or otherwise) as may be requisite for the purpose of securing that all parties are, as nearly as may be, in the same position as they would have been in if the notice under subsection (2) had been served or withdrawn before the service of the notice under section 125.

Meaning of “secure tenancy” and “secure tenant”

185

• (1) References in this Part to a secure tenancy or a secure tenant in relation to a time before 26th August 1984 are to a tenancy which would have been a secure tenancy if Chapter II of Part I of the Housing Act 1980 and Part I of the Housing and Building Control Act 1984 and had then been in force or to a person who would then have been a secure tenant.

• (2) For the purpose of determining whether a person would have been a secure tenant and his tenancy a secure tenancy—

• (a) a predecessor of a local authority shall be deemed to have been such an authority, and

• (b) a housing association shall be deemed to have been registered if it is or was a registered social landlord at any later time.

Members of a person’s family

186

• (1) A person is a member of another’s family within the meaning of this Part if—

• (a) he is the spouse of that person, or he and that person live together as husband and wife, or

• (b) he is that person’s parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew or niece.

• (2) For the purposes of subsection (1)(b)—

• (a) a relationship by marriage shall be treated as a relationship by blood,

• (b) a relationship of the half-blood shall be treated as a relationship of the whole blood,

• (c) the stepchild of a person shall be treated as his child, and

• (d) an illegitimate child shall be treated as the legitimate child of his mother and reputed father.

Minor definitions

187

In this Part—

• “improvement” means, in relation to a dwelling-house, any alteration in, or addition to, the dwelling-house and includes— any addition to, or alteration in, landlord’s fixtures and fittings and any addition or alteration connected with the provision of services to the dwelling-house, the erection of a wireless or television aerial, and the carrying out of external decoration and shall be similarly construed in relation to any other building or land;

• “improvement contribution” means an amount payable by a tenant of a flat in respect of improvements to the flat, the building in which it is situated or any other building or land, other than works carried out in discharge of any such obligations as are referred to in paragraph 16A(1) of Schedule 6 (obligation to repair, reinstate, etc.);

• “long tenancy” means— a long tenancy within the meaning of Part IV, , or a tenancy falling within paragraph 1 of Schedule 2 to the Housing (Northern Ireland) Order 1983; and “long lease” shall be construed accordingly;

Index of defined expressions: Part V

188

The following Table shows provisions defining or otherwise explaining expressions used in this Part (other than provisions defining or explaining an expression used in the same section or paragraph):—

bank	section 622
building society	section 622
cemetery	section 622
charity	section 622
compulsory disposal	section 161
co-operative housing association	section 5(2)
the Corporation	section 6A
district valuer	section 622
dwelling-house	sections 183 and 184
exempted disposal	section 160
family (member of)	section 186
flat	section 183
friendly society	section 622
house	section 183
housing association	section 5(1)
housing trust	section 6
improvement	section 187
improvement contribution	section 187
incumbrances	paragraph 7 of Schedule 6
insurance company	section 622
lease	section 621
local authority	section 4(e)
local housing authority	section 1, 2(2)
long tenancy (and long lease)	section 187
new town corporation	section 4(b)
prescribed	section 614
public sector tenancy (and public sector tenant)	paragraphs 6 to 10 of Schedule 4
purchase price	section 126
reference period (for purposes of s.125A or 125B)	section 125C
registered social landlord	section 5(4) and (5)
regular armed forces of the Crown	section 622
relevant disposal	section 159 and see section 452(3)
relevant time	section 122(2)
right to acquire	section 118(1)
secure tenancy and secure tenant	sections 79 and 185
service charge	section 621A
tenant’s incumbrance	paragraph 7 of Schedule 6
trustee savings bank	section 622
urban development corporation	section 4(d)

SCHEDULE 4 — QUALIFYING PERIOD FOR RIGHT TO ACQUIRE AND DISCOUNT

Introductory

1

The period to be taken into account for the purposes of section 119 (qualification for right to acquire) is the period qualifying, or the aggregate of the periods qualifying, under the following provisions of this Schedule.

Periods occupying accommodation subject to public sector tenancy

2

A period qualifies under this paragraph if it is a period during which, before the relevant time—

• (a) the tenant, or

• (b) his spouse (if they are living together at the relevant time), or

• (c) a deceased spouse of his (if they were living together at the time of the death),

was a public sector tenant or was the spouse of a public sector tenant and occupied as his only or principal home the dwelling-house of which the spouse was such a tenant.

3

For the purposes of paragraph 2 a person who, as a joint tenant under a public sector tenancy, occupied a dwelling-house as his only or principal home shall be treated as having been the public sector tenant under that tenancy.

4

• (1) This paragraph applies where the public sector tenant of a dwelling-house died or otherwise ceased to be a public sector tenant of the dwelling-house, and thereupon a child of his who occupied the dwelling-house as his only or principal home (the “new tenant”) became the public sector tenant of the dwelling-house (whether under the same or under another public sector tenancy).

• (2) A period during which the new tenant, since reaching the age of 16, occupied as his only or principal home a dwelling-house of which a parent of his was the public sector tenant or one of joint tenants under a public sector tenancy, being either—

• (a) the period at the end of which he became the public sector tenant, or

• (b) an earlier period ending two years or less before the period mentioned in paragraph (a) or before another period within this paragraph,

shall be treated for the purposes of paragraph 2 as a period during which he was a public sector tenant.

• (3) For the purposes of this paragraph two persons shall be treated as parent and child if they would be so treated under section 186(2) (members of a person’s family: relationships other than those of the whole blood).

Periods occupying forces accommodation

5

A period qualifies under this paragraph if it is a period during which, before the relevant time—

• (a) the tenant, or

• (b) his spouse (if they are living together at the relevant time), or

• (c) a deceased spouse of his (if they were living together at the time of the death),

occupied accommodation provided for him as a member of the regular armed forces of the Crown or was the spouse of a person occupying accommodation so provided and also occupied that accommodation.

Meaning of “public sector tenant”

6

• (1) In this Schedule a “public sector tenant” means a tenant under a public sector tenancy.

• (2) For the purposes of this Schedule, a tenancy, other than a long tenancy, under which a dwelling-house was let as a separate dwelling was a public sector tenancy at any time when the conditions described below as the landlord condition and the tenant conditions were satisfied.

• (3) The provisions of this Schedule apply in relation to a licence to occupy a dwelling-house (whether or not granted for a consideration) as they apply in relation to a tenancy.

• (4) Sub-paragraph (3) does not apply to a licence granted as a temporary expedient to a person who entered the dwelling-house or any other land as a trespasser (whether or not, before the grant of that licence, another licence to occupy that or another dwelling-house had been granted to him).

The landlord condition

7

• (1) The landlord condition is, subject to paragraph 7A and to any order under paragraph 8, that the interest of the landlord belonged to, or to a predecessor of—

• a local authority,

• a new town corporation,

• a housing action trust,

• the Development Board for Rural Wales,

• an urban development corporation,

• the Corporation,

• a registered social landlord which is not a co-operative housing association,

or to a predecessor of, an authority or other body falling within sub-paragraph (2) or (3) (corresponding authorities and bodies in Scotland and Northern Ireland).

• (2) The corresponding authorities and bodies in Scotland are—

• a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994,

• a joint board or joint committee of such a council,

• the common good of such a council or a trust under its control,

• a development corporation, established by an order made or having effect as if made under the New Towns (Scotland) Act 1968,

• Scottish Homes,

• a housing association which falls within section 6(2)(a) (vi) of the Housing (Scotland) Act 1987 but is not a registered society within the meaning of section 45 of that Act.

• (3) The corresponding authorities and bodies in Northern Ireland are—

a district council within the meaning of the Local Government Act (Northern Ireland) 1972,

• the Northern Ireland Housing Executive, and

• a registered housing association within the meaning of Chapter II of Part II of the Housing (Northern Ireland) Order 1983.

7A

• (1) The landlord condition shall be treated as having been satisfied in the case of a dwelling-house comprised in a housing co-operative agreement made—

• (a) in England and Wales, by a local housing authority, new town corporation or the Development Board for Rural Wales, or

• (b) in Scotland, by a local housing authority,

if the interest of the landlord belonged to the housing co-operative.

• (2) In sub-paragraph (1) “housing co-operative agreement” and “housing co-operative”—

• (a) as regards England and Wales have the same meaning as in section 27B (agreements with housing co-operatives under superseded provisions), and

• (b) as regards Scotland mean an agreement made under section 22 of the Housing (Scotland) Act 1987 and a housing co-operative within the meaning of that section.

8

• (1) The landlord condition shall also be treated as having been satisfied, in such circumstances as may be prescribed for the purposes of this paragraph by order of the Secretary of State, if the interest of the landlord belonged to a person who is so prescribed.

• (2) An order under this paragraph—

• (a) may make different provision with respect to different cases or descriptions of case, including different provision for different areas, and

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

The tenant condition

9

The tenant condition is that the tenant was an individual and occupied the dwelling-house as his only or principal home; or, where the tenancy was a joint tenancy, that each of the joint tenants was an individual and at least one of them occupied the dwelling-house as his only or principal home.

Application to certain housing association tenancies

10

For the purpose of determining whether at any time a tenant of a housing association was a public sector tenant and his tenancy a public sector tenancy, the association shall be deemed to have been registered at that time, under Part I of the Housing Act 1996 or Part I of the Housing Associations Act 1985 or under the corresponding Northern Ireland legislation, if it was so registered at any later time.

SCHEDULE 5 — EXCEPTIONS TO THE RIGHT TO ACQUIRE

Rural areas

1A

The right to acquire does not arise if the dwelling-house is situated in a rural area designated by order of the Secretary of State under section 17(1)(b) (right to acquire: supplementary provisions) of the Housing Act 1996.

Certain housing associations

2

The right to acquire does not arise if the landlord is a co-operative housing association.

Landlord with insufficient interest in the property

4

The right to acquire does not arise unless the landlord owns the freehold or has an interest sufficient to grant a lease in pursuance of this Part for—

• (a) where the dwelling-house is a house, a term exceeding 21 years, or

• (b) where the dwelling-house is a flat, a term of not less than 50 years,

commencing, in either case, with the date on which the tenant’s notice claiming to exercise the right to acquire is served.

Dwelling-houses let in connection with employment

5

• (1) The right to acquire does not arise if the dwelling-house—

• (a) forms part of, or is within the curtilage of, a building which, or so much of it as is held by the landhold, is held mainly for purposes other than housing purposes and consists mainly of accommodation other than housing accommodation, or is situated in a cemetery, and

• (b) was let to the tenant or a predecessor in title of his in consequence of the tenant or predecessor being in the employment of the landlord or of—

• a local authority,

• a new town corporation,

• a housing action trust,

• the Development Board for Rural Wales,

• an urban development corporation, or

• the governors of an aided school.

• (2) In sub-paragraph (1)(a) “housing purposes” means the purposes for which dwelling-houses are held by local housing authorities under Part II (provision of housing) or purposes corresponding to those purposes.

Certain dwelling-houses for the disabled

7

The right to acquire does not arise if the dwelling-house has features which are substantially different from those of ordinary dwelling-houses and are designed to make it suitable for occupation by physically disabled persons, and—

• (a) it is one of a group of dwelling-houses which it is the practice of the landlord to let for occupation by physically disabled persons, and

• (b) a social service or special facilities are provided in close proximity to the group of dwelling-houses wholly or partly for the purpose of assisting those persons.

9

• (1) The right to acquire does not arise if—

• (a) the dwelling-house is one of a group of dwelling-houses which it is the practice of the landlord to let for occupation by persons who are suffering or have suffered from a mental disorder, and

• (b) a social service or special facilities are provided wholly or partly for the purpose of assisting those persons.

• (2) In sub-paragraph (1)(a) “mental disorder” has the same meaning as in the Mental Health Act 1983.

Certain dwelling houses for persons with special needs

9A

• (1) The right to acquire does not arise if the dwelling-house is one of a group of dwelling-houses which it is the practice of the landlord to let for occupation by persons who have special needs and require intensive housing assistance and such intensive housing assistance is provided, either directly or indirectly, by the landlord.

• (2) In this paragraph “intensive housing assistance” means the provision by the landlord to persons with special needs of assistance on housing issues which is significantly greater than the assistance which is generally provided by registered social landlords to tenants who do not have special needs.

• (3) In this paragraph “persons who have special needs” means persons who are vulnerable as a result of age, physical disability or illness, a mental disorder or impairment of any kind, drug or alcohol addiction, violence or the threat of violence by a member of a person’s family, or other special reason.

Certain dwelling-houses for persons of pensionable age

10

• (1) The right to acquire does not arise if the dwelling-house is one of a group of dwelling-houses—

• (a) which are particularly suitable, having regard to their location, size, design, heating systems and other features, for occupation by elderly persons, and

• (b) which it is the practice of the landlord to let for occupation by persons aged 60 or more, or for occupation by such persons and physically disabled persons,

and special facilities such as are mentioned in sub-paragraph (2) are provided wholly or mainly for the purposes of assisting those persons.

• (2) The facilities referred to above are facilities which consist of or include—

• (a) the services of a resident warden, or

• (b) the services of a non-resident warden, a system for calling him and the use of a common room in close proximity to the group of dwelling-houses.

Dwelling-houses held on Crown tenancies

12

• (1) The right to acquire does not arise if the dwelling-house is held by the landlord on a tenancy from the Crown, unless—

• (a) the landlord is entitled to grant a lease in pursuance of this Part without the concurrence of the appropriate authority, or

• (b) the appropriate authority notifies the landlord that as regards any Crown interest affected the authority will give its consent to the granting of such a lease.

• (2) In this paragraph “tenancy from the Crown” means a tenancy of land in which there is a Crown interest superior to the tenancy, and “Crown interest” and “appropriate authority” mean respectively—

• (a) an interest comprised in the Crown Estate, and the Crown Estate Commissioners or other government department having the management of the land in question;

• (b) an interest belonging to Her Majesty in right of the Duchy of Lancaster, and the Chancellor of the Duchy;

• (c) an interest belonging to the Duchy of Cornwall, and such person as the Duke of Cornwall or the possessor for the time being of the Duchy appoints;

• (d) any other interest belonging to a government department or held on behalf of Her Majesty for the purposes of a government department, and that department.

• (3) Section 179(1) (which renders ineffective certain provisions restricting the grant of leases under this Part) shall be disregarded for the purposes of sub-paragraph (1)(a).

Dwelling-houses where the debt is equal to or greater than the purchase price plus discount

13

• (1) The right to acquire does not arise if the net debt or the peak debt attributable to the dwelling-house on the date of service of the tenant’s notice under section 122 (tenant’s notice claiming to exercise right to acquire) is equal to or greater than the purchase price plus the discount.

• (2) In sub-paragraph (1) the net debt is the amount of the relevant costs, as defined in sub-paragraph (4), less the amount of public subsidy as defined in sub-paragraph (5).

• (3) In sub-paragraph (1) the peak debt is the amount under a loan agreement, as defined in sub-paragraph (6), that is the portion of the maximum amount which the landlord may borrow under a loan agreement which is attributable to the dwelling-house.

• (4) In sub-paragraph (2) the “relevant costs” means the costs incurred by the landlord in respect of the dwelling-house, the construction of the dwelling-house (including the costs of development works and the acquisition of land) but does not include the costs of—

• (a) works of repair or maintenance;

• (b) works to deal with any defect affecting the dwelling-house;

• (c) works of improvement where they are paid for on or after the date of service of the tenant’s notice under section 122 unless—

• (i) the landlord has before that date entered into a written contract for the carrying out of the works; or

• (ii) the tenant has agreed in writing to the carrying out of the works and either the works have been carried out no later than the date of service of the landlord’s notice under section 125 (landlord’s notice of purchase price and other matters) or the works will be carried out under the proposed terms of the conveyance.

• (5) In sub-paragraph (2) “public subsidy” means grant or other financial assistance of any kind used by the landlord in whole or in part in connection with the acquisition, construction (including the costs of development and the acquisition of land), repair, maintenance or improvement of the dwelling-house where such grant or assistance is received from—

• the Housing Corporation in England and Housing for Wales in Wales under section 18 of the Housing Act 1996 (social housing grants),

• the Secretary of State under section 126 of the Housing Grants, Construction and Regeneration Act 1996 under the programme designated “City Challenge” in England and the programmes designated the “Strategic Development Scheme” and “Welsh Capital Challenge” in Wales,

• a local housing authority where grant is paid pursuant to an application by the landlord under Part VIII (grants towards the costs of improvements and repairs, etc.) of the Local Government and Housing Act 1989 or Chapter I of Part I (grants &c. for renewal of private sector housing) of the Housing Grants, Construction and Regeneration Act 1996,

• National Lottery, and

• a local authority in a case where the local authority has conveyed the freehold or the leasehold of land to the landlord at a price which is below the market value of the land at the time of the conveyance.

• (6) In sub-paragraph (3) a “loan agreement” means an agreement—

• (a) for a loan between a lender and the landlord which is wholly or partly secured by a charge (however created or arising) on the landlord’s interest in the dwelling-house,

• (b) which specifies the portion of the maximum amount which the landlord may borrow in any period which is attributable to the dwelling-house, and

• (c) which is for the purpose of the provision of monies for use in connection with the acquisition of land held for housing purposes and housing stock pursuant to a disposal under section 32 (power to dispose of land held for the purposes of this Part) of the Housing Act 1985; and where a loan is for such a purpose it may include the construction of dwelling-houses (including the costs of development works and the acquisition of land) and works of repair, maintenance or improvement to dwelling-houses pursuant to such acquisition.

SCHEDULE 6 — CONVEYANCE OF FREEHOLD AND GRANT OF LEASE IN PURSUANCE OF RIGHT TO ACQUIRE

PART I — COMMON PROVISIONS

Rights to be conveyed or granted-general

1

The conveyance or grant shall not exclude or restrict the general words implied under section 62 of the Law of Property Act 1925, unless the tenant consents or the exclusion or restriction is made for the purpose of preserving or recognising an existing interest of the landlord in tenant’s incumbrances or an existing right or interest of another person.

Rights of support, passage of water, etc

2

• (1) The conveyance or grant shall, by virtue of this Schedule, have the effect stated in sub-paragraph (2) as regards—

• (a) rights of support for a building or part of a building;

• (b) rights to the access of light and air to a building or part of a building;

• (c) rights to the passage of water or of gas or other piped fuel, or to the drainage or disposal of water, sewage, smoke or fumes, or to the use or maintenance of pipes or other installations for such passage, drainage or disposal;

• (d) rights to the use or maintenance of cables or other installations for the supply of electricity, for the telephone or for the receipt directly or by landline of visual or other wireless transmissions.

• (2) The effect is—

• (a) to grant with the dwelling-house all such easements and rights over other property, so far as the landlord is capable of granting them, as are necessary to secure to the tenant as near as may be the same rights as at the relevant time were available to him under or by virtue of the tenancy or an agreement collateral to it, or under or by virtue of a grant, reservation or agreement made on the severance of the dwelling-house from other property then comprised in the same tenancy; and

• (b) to make the dwelling-house subject to all such easements and rights for the benefit of other property as are capable of existing in law and are necessary to secure to the person interested in the other property as nearly as may be the same rights as at the relevant time were available against the tenant under or by virtue of the tenancy or an agreement collateral to it, or under or by virtue of a grant, reservation or agreement made as mentioned in paragraph (a).

• (3) This paragraph—

• (a) does not restrict any wider operation which the conveyance or grant may have apart from this paragraph; but

• (b) is subject to any provision to the contrary that may be included in the conveyance or grant with the consent of the tenant.

Rights of way

3

The conveyance or grant shall include—

• (a) such provisions (if any) as the tenant may require for the purpose of securing to him rights of way over land not comprised in the dwelling-house, so far as the landlord is capable of granting them, being rights of way that are necessary for the reasonable enjoyment of the dwelling-house; and

• (b) such provisions (if any) as the landlord may require for the purpose of making the dwelling-house subject to rights of way necessary for the reasonable enjoyment of other property, being property in which at the relevant time the landlord has an interest, or to rights of way granted or agreed to be granted before the relevant time by the landlord or by the person then entitled to the reversion on the tenancy.

Covenants and conditions

4

The conveyance or grant shall include such provisions (if any) as the landlord may require to secure that a tenant is bound by, or to indemnify the landlord against breaches of, restrictive covenants (that is to say, covenants or agreements restrictive of the use of any land or premises) which affect the dwelling-house otherwise than by virtue of the tenancy or an agreement collateral to it and are enforceable for the benefit of other property.

4A

The conveyance or grant shall be expressed to be made by the landlord with full title guarantee (thereby implying the covenants for title specified in Part I of the Law of Property (Miscellaneous Provisions) Act 1994).

5

Subject to paragraph 6, and to Parts II and III of this Schedule, the conveyance or grant may include such other covenants and conditions as are reasonable in the circumstances.

No charge to be made for landlord’s consent or approval

6

A provision of the conveyance or lease is void in so far as it purports to enable the landlord to charge the tenant a sum for or in connection with the giving of a consent or approval.

Meaning of “incumbrances” and “tenant’s incumbrance”

7

In this Schedule—

• “incumbrances” includes personal liabilities attaching in respect of the ownership of land or an interest in land though not charged on the land or interest; and

• “tenant’s incumbrance” means— an incumbrance on the tenancy which is also an incumbrance on the reversion, and an interest derived, directly or indirectly, out of the tenancy.

PART II — CONVEYANCE OF FREEHOLD

General

8

The conveyance shall not exclude or restrict the all estate clause implied under section 63 of the Law of Property Act 1925, unless the tenant consents or the exclusion or restriction is made for the purpose of preserving or recognising an existing interest of the landlord in tenant’s incumbrances or an existing right or interest of another person.

9

• (1) The conveyance shall be of an estate in fee simple absolute, subject to—

• (a) tenant’s incumbrances,

• (b) burdens (other than burdens created by the conveyance) in respect of the upkeep or regulation for the benefit of any locality or any land, building, structure, works, ways or watercourses;

but otherwise free from incumbrances.

• (2) Nothing in sub-paragraph (1) shall be taken as affecting the operation of paragraph 5 of this Schedule (reasonable covenants and conditions).

PART III — LEASES

General

11

A lease shall be for the appropriate term defined in paragraph 12 and at a rent not exceeding £10 per annum, and the following provisions have effect with respect to the other terms of the lease.

The appropriate term

12

• (1) If at the time the grant is made the landlord’s interest in the dwelling-house is not less than a lease for a term of which more than 125 years and five days are unexpired, the appropriate term is a term of not less than 125 years.

• (2) In any other case the appropriate term is a term expiring five days before the term of the landlord’s lease of the dwelling-house (or, as the case may require, five days before the first date on which the term of any lease under which the landlord holds any part of the dwelling-house) is to expire.

Common use of premises and facilities

13

Where the dwelling-house is a flat and the tenant enjoyed, during the tenancy, the use in common with others of any premises, facilities or services, the lease shall include rights to the like enjoyment, so far as the landlord is capable of granting them, unless otherwise agreed between the landlord and the tenant.

Covenants by the landlord

14

• (1) This paragraph applies where the dwelling-house is a flat.

• (2) There are implied covenants by the landlord—

• (a) to keep in repair the structure and exterior of the dwelling-house and of the building in which it is situated (including drains, gutters and external pipes) and to make good any defect affecting that structure;

• (b) to keep the repair any other property over or in respect of which the tenant has rights by virtue of this Schedule;

• (c) to ensure, so far as practicable, that services which are to be provided by the landlord and to which the tenant is entitled (whether by himself or in common with others) are maintained at a reasonable level and to keep in repair any installation connected with the provision of those services.

• (3) There is an implied covenant that the landlord shall rebuild or reinstate the dwelling-house and the building in which it is situated in the case of destruction or damage by fire, tempest, flood or any other cause against the risk of which it is normal practice to insure.

• (3A) Sub-paragraphs (2) and (3) have effect subject to paragraph 15(3) (certain obligations not to be imposed, where landlord’s title is leasehold, by reason of provisions of superior lease).

• (4) The county court may, by order made with the consent of the parties, authorise the inclusion in the lease or in an agreement collateral to it of provisions excluding or modifying the obligations of the landlord under the covenants implied by this paragraph, if it appears to the court that it is reasonable to do so.

15

• (1) This paragraph applies where the landlord’s interest in the dwelling-house is leasehold.

• (2) There is implied a covenant by the landlord to pay the rent reserved by the landlord’s lease and, except in so far as they fall to be discharged by the tenant, to discharge its obligations under the covenants contained in that lease.

• (3) A covenant implied by virtue of paragraph 14 (implied covenants where dwelling-house is a flat) shall not impose on the landlord an obligation which the landlord is not entitled to discharge under the provisions of the landlord’s lease or a superior lease.

• (4) Where the landlord’s lease or a superior lease, or an agreement collateral to the landlord’s lease or a superior lease, contains a covenant by a person imposing obligations which, but for sub-paragraph (3), would be imposed by a covenant implied by virtue of paragraph 14, there is implied a covenant by the landlord to use its best endeavours to secure that person’s obligations under the first-mentioned covenant are discharged.

Covenant by tenant

16

Unless otherwise agreed between the landlord and the tenant, there is implied a covenant by the tenant—

• (a) where the dwelling-house is a house, to keep the dwelling-house in good repair (including decorative repair);

• (b) where the dwelling-house is a flat, to keep the interior of the dwelling-house in such repair.

Service charges and other contributions payable by the tenant

16A

• (1) The lease may require the tenant to bear a reasonable part of the costs incurred by the landlord—

• (a) in discharging or insuring against the obligations imposed by the covenants implied by virtue of paragraph 14(2) (repairs, making good structural defects, provision of services, etc.), or

• (b) in insuring against the obligations imposed by the covenant implied by virtue of paragraph 14(3) (rebuilding or reinstatement, etc.),

and to the extent that by virtue of paragraph 15(3) (effect of provision of superior lease) such obligations are not imposed on the landlord, to bear a reasonable part of the costs incurred by the landlord in contributing to costs incurred by a superior landlord or other person in discharging or, as the case may be, insuring against obligations to the like effect.

• (2) Where the lease requires the tenant to contribute to the costs of insurance, it shall provide that the tenant is entitled to inspect the relevant policy at such reasonable times as may be specified in the lease.

• (3) Where the landlord does not insure against the obligations imposed by the covenant implied by virtue of paragraph 14(3), or, as the case may be, the superior landlord or other person does not insure against his obligations to the like effect, the lease may require the tenant to pay a reasonable sum in place of the contribution he could be required to make if there were insurance.

• (4) Where in any case the obligations imposed by the covenants implied by virtue of paragraph 14(2) or (3) are modified in accordance with paragraph 14(4) (power of county court to authorise modification), the references in this paragraph are to the obligations as so modified.

• (5) This paragraph has effect subject to paragraph 16B (restrictions in certain cases as regards costs incurred in the initial period of the lease).

16B

• (1) Where a lease of a flat requires the tenant to pay service charges in respect of repairs (including works for the making good of structural defects), his liability in respect of costs incurred in the initial period of the lease is restricted as follows.

• (2) He is not required to pay in respect of works itemised in the estimates contained in the landlord’s notice under section 125 any more than the amount shown as his estimated contribution in respect of that item, together with an inflation allowance.

• (3) He is not required to pay in respect of works not so itemised at a rate exceeding—

• (a) as regards parts of the initial period falling within the reference period for the purposes of the estimates contained in the landlord’s notice under section 125, the estimated annual average amount shown in the estimates;

• (b) as regards parts of the initial period not falling within that reference period, the average rate produced by averaging over the reference period all works for which estimates are contained in the notice;

together, in each case, with an inflation allowance.

• (4) The initial period of the lease for the purposes of this paragraph begins with the grant of the lease and ends five years after the grant, except that—

• (a) if the lease includes provision for service charges to be payable in respect of costs incurred in a period before the grant of the lease, the initial period begins with the beginning of that period;

• (b) if the lease provides for service charges to be calculated by reference to a specified annual period, the initial period continues until the end of the fifth such period beginning after the grant of the lease.

16C

• (1) Where a lease of a flat requires the tenant to pay improvement contributions, his liability in respect of costs incurred in the initial period of the lease is restricted as follows.

• (2) He is not required to make any payment in respect of works for which no estimate was given in the landlord’s notice under section 125.

• (3) He is not required to pay in respect of works for which an estimate was given in that notice any more than the amount shown as his estimated contribution in respect of that item, together with an inflation allowance.

• (4) The initial period of the lease for the purposes of this paragraph begins with the grant of the lease and ends five years after the grant, except that—

• (a) if the lease includes provision for improvement contributions to be payable in respect of costs incurred in a period before the grant of the lease, the initial period begins with the beginning of that period;

• (b) if the lease provides for improvement contributions to be calculated by reference to a specified annual period, the initial period continues until the end of the fifth such period beginning after the grant of the lease.

16D

• (1) The Secretary of State may by order prescribe—

• (a) the method by which inflation allowances for the purposes of paragraph 16B or 16C are to be calculated by reference to published statistics; and

• (b) the information to be given to a tenant when he is asked to pay a service charge or improvement contribution to which the provisions of paragraph 16B or 16C are or may be relevant.

• (2) An order—

• (a) may make different provision for different cases or descriptions of case, including different provision for different areas;

• (b) may contain such incidental, supplementary or transitional provisions as the Secretary of State thinks appropriate; and

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

Avoidance of certain provisions

17

• (1) A provision of the lease, or of an agreement collateral to it, is void in so far as it purports to prohibit or restrict the assignment of the lease or the subletting, wholly or in part, of the dwelling-house.

18

Where the dwelling-house is a flat, a provision of the lease or of an agreement collateral to it is void in so far as it purports—

• (a) to authorise the recovery of such a charge as is mentioned in paragraph 16A (contributions in respect of repairs, etc.) otherwise than in accordance with that paragraph and paragraph 16B (restrictions in initial period of lease); or

• (b) to authorise the recovery of any charge in respect of costs incurred by the landlord—

• (i) in discharging the obligations imposed by the covenant implied by paragraph 14(3) (rebuilding or reinstatement, etc.), or those obligations as modified in accordance with paragraph 14(4), or

• (ii) in contributing to costs incurred by a superior landlord or other person in discharging obligations to the like effect; or

• (c) to authorise the recovery of an improvement contribution otherwise than in accordance with paragraph 16C (restrictions in initial period of lease).

19

A provision of the lease, or of an agreement collateral to it, is void in so far as it purports to authorise a forfeiture, or to impose on the tenant a penalty or disability, in the event of his enforcing or relying on the preceding provisions of this Schedule.

PART IV — CHARGES

Grant of lease

20

A charge (however created or arising) on the interest of the landlord which is not a tenant’s incumbrance does not affect a lease granted in pursuance of the right to acquire provided that—

• (a) the landlord has complied with the requirements imposed on the landlord by paragraph 22, or

• (b) the holder of a charge has agreed in writing with the landlord that paragraph 22 shall not apply,

but the release does not affect the personal liability of the landlord or any other person in respect of any obligation the charge was created to secure.

Conveyance of freehold

21

• (1) This paragraph applies to a charge (however created or arising) on the freehold where the freehold is conveyed in pursuance of the right to acquire.

• (2) If the charge is not a tenant’s incumbrance and is not a rentcharge the conveyance is effective to release the freehold from the charge provided that—

• (a) the landlord has complied with the requirements imposed on the landlord by paragraph 22, or

• (b) the holder of the charge has agreed in writing with the landlord that paragraph 22 shall not apply;

but the release does not affect the personal liability of the landlord or any other person in respect of any obligation which the charge was created to secure.

• (3) If the charge is a rentcharge the conveyance shall be made subject to the charge; but if the rentcharge also affects other land—

• (a) the conveyance shall contain a covenant by the landlord to indemnify the tenant and his successors in title in respect of any liability arising under the rentcharge, and

• (b) if the rentcharge is of a kind which may be redeemed under the Rentcharges Act 1977 the landlord shall immediately after the conveyance take such steps as are necessary to redeem the rentcharge so far as it affects land owned by him.

• (4) In this paragraph “rentcharge” has the same meaning as in the Rentcharges Act 1977; and

• (a) for the purposes of sub-paragraph (3) land is owned by a person if he is the owner of it within the meaning of section 13(1) of that Act, and

• (b) for the purposes of that sub-paragraph and that Act land which has been conveyed by the landlord in pursuance of the right to acquire but subject to the rentcharge shall be treated as if it had not been so conveyed but had continued to be owned by him.

Notice to lenders

22

• (1) This paragraph and paragraph 23 shall apply to a charge (however created or arising) on the interest of the landlord in the dwelling house, unless and until the landlord and the holder of the charge at any time agree otherwise in writing.

• (2) Within 7 days of the landlord receiving the tenant’s written notice of his intention to pursue his claim to the right to acquire under section 125D the landlord shall serve on the holder of any charge secured against the dwelling-house a written notice stating the purchase price of the dwelling-house and the amount of the discount and whether the landlord intends to redeem the charge in respect of the dwelling-house on the grant of the lease or the conveyance of the freehold to the tenant pursuant to the right to acquire.

• (3) If the landlord’s notice states that he intends to redeem the charge then, on the grant of the lease or the conveyance of the freehold, the sum required to redeem the charge shall be paid by the landlord to the charge holder and the charge holder shall supply to the landlord the necessary documentation to release the charge in respect of the dwelling-house.

• (4) If the landlord does not intend to redeem the charge on the grant of the lease or conveyance of the freehold, the landlord’s notice shall, in addition, offer to the holder of the sole charge or the charge having priority the option of either—

• (a) subject to sub-paragraph (5), taking as alternative security a charge on the interest in a property of the landlord which has a value (excluding any amount secured by a charge with priority on the landlord’s interest in the property) equal to or greater than the purchase price of the dwelling-house plus the discount, or

• (b) an amount equal to the purchase price of the dwelling-house plus the discount.

• (5) The landlord shall not be required to offer a property as alternative security unless the landlord owns a freehold or leasehold interest in a property with a value (excluding any amount secured by a charge on the interest which is being offered in the property) equal to or greater than the purchase price plus discount.

• (6) Where sub-paragraph (4) applies within 14 days of receipt of the landlord’s notice the charge holder shall serve on the landlord a written notice stating the option exercised by the charge holder.

• (7) Where the charge holder exercises the option specified in sub-paragraph (4)(a) the landlord shall within 14 days of receipt of the charge holder’s notice offer the charge holder a specified property in accordance with that sub-paragraph.

• (8) Where the charge holder accepts the property offered as alternative security the landlord shall take all reasonable steps to enable the charge holder to secure a charge against the landlord’s interest in the property within whichever is the later of—

• (a) 21 days of the date on which the landlord receives notification of the charge holder’s acceptance of the property as alternative security, or

• (b) the grant of the lease or the conveyance of the freehold of the dwelling-house pursuant to the right to acquire.

• (9) If the landlord fails to take all reasonable steps to enable the charge holder to secure a charge against the landlord’s interest in accordance with sub-paragraph (8) the charge holder may require the landlord to pay within 7 days an amount equal to the purchase price of the dwelling-house plus discount.

• (10) Where the charge holder rejects the property offered as alternative security the charge holder may require the landlord to pay an amount equal to the purchase price of the dwelling-house plus the discount within whichever is the later of—

• (a) 21 days of the date on which the landlord receives notification of the charge holder’s rejection of the property, or

• (b) the grant of the lease or the conveyance of the freehold of the dwelling-house pursuant to the right to acquire.

• (11) Where the charge holder exercises the option in sub-paragraph (4)(b) the landlord shall pay the sum specified in that sub-paragraph on the grant of a lease or the conveyance of the freehold of the dwelling-house pursuant to the right to acquire.

Discharge of the charge on the landlord’s interest in the dwelling-house

23

• (1) Where the landlord and the charge holder have agreed in writing that the provisions of paragraph 22 shall not apply on the grant of the lease or the conveyance of the freehold pursuant to the right to acquire the landlord shall supply to the tenant a certificate confirming the agreement together with a copy of the agreement which is certified as a true copy.

• (2) Where the provisions of paragraph 22 apply, provided that the landlord has complied with the requirements imposed on the landlord by that paragraph any holder of a charge on the landlord’s interest in the dwelling-house shall, on the grant of the lease or the conveyance of the freehold of the dwelling-house pursuant to the right to acquire, provide to the landlord such documentation as is necessary to discharge their charge in respect of the dwelling-house.

• (3) Where a charge holder does not provide the documentation in accordance with sub-paragraph (2), or where the charge holder has failed to serve a notice in accordance with paragraph 22(6), the landlord shall, on the grant of the lease or the conveyance of the freehold pursuant to the right to acquire, supply to the tenant a certificate stating that the landlord has complied with the requirements imposed on the landlord by paragraph 22.

• (4) A certificate under sub-paragraphs (1) or (3) shall be effective to release the dwelling-house from the charge on the interest of the landlord to which the certificate applies but shall not affect the personal liability of the landlord or any other person in respect of any obligation which such a charge was created to secure.

• (5) A certificate under sub-paragraphs (1) or (3) shall—

• (a) be in a form approved by the Chief Land Registrar, and

• (b) signed by such officer of the landlord or such other person as may be approved by the Chief Land Registrar.

• (6) The Chief Land Registrar shall, for the purpose of registration of title, accept such certificate as sufficient evidence of the facts stated in it, but if as a result he has to meet a claim against him under the Land Registration Acts 1925 to 1971 the landlord is liable to indemnify him.

Signed

Signed by authority of the Secretary of State for the Environment

David Curry — Minister of State, — Department of the Environment — 5th March 1997

Signed by authority of the Secretary of State for Wales

Jonathan Evans — Parliamentary Under Secretary of State for Wales — 5th March 1997

Explanatory note

(This note is not part of the Regulations)

These Regulations modify Part V of the Housing Act 1985 (the right to buy) for cases where a tenant has the right to acquire the dwelling-house under section 16 of the Housing Act 1996. Schedule 1 specifies the modifications and Schedule 2 sets out Part V of the 1985 Act as so modified. In particular, the Regulations—

• exclude the right to buy on rent to mortgage terms and the preserved right to buy;

• remove the exceptions to the right to buy in paragraphs 1, 3 and 11 of Schedule 5 to the 1985 Act (charities; certain housing associations; certain dwelling-houses for the elderly;

• add exceptions to the right to acquire in paragraphs 1A, 9A and 13 of Schedule 5 (dwelling-houses in designated rural areas; dwelling-house for persons with special needs; dwelling-houses charged with debts equal to or greater than the purchase price plus discount);

• provide for the tenant to acquire the dwelling-house at a discount as specified in an order made by the Secretary of State under section 17 of the Housing Act 1996;

• disapply the restrictions on the disposals in National Parks etc. in sections 157 and 158 of the 1985 Act and the powers of the Secretary of State to intevene etc. under sections 164 to 170 of that Act; and

• add provisions in paragraphs 22 and 23 of Schedule 6 on the discharge or release of charges on the landlord’s interest in the dwelling-house.

Footnotes

[^f00001]: 1996 c. 52.

[^f00002]: 1985 c. 68.

[^f00003]: Section 130(2)(aa) was added by paragraph 29 of Schedule 5 to the Housing and Planning Act 1986.

[^f00004]: 1996 c. 52.

[^f00005]: Section 124(3) was repealed by Schedule 22 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00006]: Section 125(5) was substituted by section 104 of the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00007]: Section 125A was inserted by section 4(2) of the Housing and Planning Act 1986.

[^f00008]: Section 125D was inserted by section 105 of the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00009]: Section 129 was amended by section 2 of the Housing and Planning Act 1986.

[^f00010]: Section 131 was amended by section 122 of the Housing Act 1988.

[^f00011]: Section 136(2) was substituted and subsections (3), (4) and (5) repealed by section 105(2) of the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00012]: Section 140(3) was substituted by paragraph 12 of Schedule 21 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00013]: Sections 143 to 151 were substituted by sections 108 to 116 of the Leasehold Reform, Housing and Urban Development Act 1993; sections 151A and 151B were inserted by sections 117 and 118 of the 1993 Act; sections 152 and 153 were amended by section 119 of the 1993 Act.

[^f00014]: Section 153A was inserted by section 124 of the Housing Act 1988 and amended and partly repealed by Schedules 21 and 22 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00015]: Section 153B was inserted by section 124 of the Housing Act 1988 and amended and partly repealed by Schedules 21 and 22 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00016]: Section 154(1) was amended by section 2(3) of the Land Registration Act 1986.

[^f00017]: Section 155(2) was amended by section 2(3) of the Housing and Planning Act 1986.

[^f00018]: Section 155(3) was substituted by section 120(1) of the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00019]: Section 155(3A) was inserted by paragraph 41 of Schedule 17 to the Housing Act 1988 and amended by section 120(2) of the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00020]: Section 156(2) was substituted by section 120(3) of the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00021]: Section 156(2A) was inserted by section 120(3) of the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00022]: Section 156(4A) was inserted by section 120(4) of the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00023]: Section 157 was amended by section 126 and paragraph 106 of Schedule 17 to the Housing Act 1988.

[^f00024]: Section 158 was amended by the Housing and Planning Act 1986 Schedule 5 paragraph 1 and by the Leasehold Reform, Housing and Urban Development Act 1993 Schedule 21 paragraph 15.

[^f00025]: Sections 171 A-H were added by section 8 of the Housing and Planning Act 1986; section 171B was amended by section 127(1) of the Housing Act 1988; section 171C was amended by Schedule 21 paragraph 19 and partly repealed by Schedule 22 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00026]: Section 177 was amended by paragraph 106 of Schedule 17 to the Housing Act 1988; amended by paragraph 20 of Schedule 21 and partly repealed by Schedule 22 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00027]: Section 178 was substituted by paragraph 21 of Schedule 21 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00028]: Section 179(1)(a) was amended by paragraph 22 of Schedule 21 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00029]: Section 180 was amended by paragraph 106 of Schedule 17 to the Housing Act 1988 and partly repealed by Schedule 22 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00030]: Section 181(1) was amended by paragraph 23 of Schedule 21 and partly repealed by Schedule 22 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00031]: Section 182 was partly repealed by Schedule 22 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00032]: Section 184(2)(a) and (3) were amended by paragraph 24 of Schedule 21 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00033]: Section 188 was amended by paragraph 31 of Schedule 5 to the Housing and Planning Act 1986; paragraph 106 of Schedule 17 to the Housing Act 1988; paragraph 25 of Schedule 21 and partly repealed by Schedule 22 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00034]: Paragraph 5A was inserted by paragraph 40 of Schedule 5 to the Housing and Planning Act 1986.

[^f00035]: Paragraph 5 of Schedule 5 was amended by section 83(1), (6)(d) of the Housing Act 1988; paragraphs 6 and 8 were repealed by section 123, 140(2), Schedule 18 of the Housing Act 1988; paragraph 10 was amended and paragraph 11 substituted by section 106 of the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00036]: 1996 c. 53.

[^f00037]: 1989 c. 42.

[^f00038]: Schedule 6A was inserted by section 117(2) of and Schedule 16 to the Leasehold Reform, Housing and Urban Development Act 1993.

[^f00039]: Schedule 9A was inserted by section 8(2) and Schedule 2 to the Housing and Planning Act 1986.