Housing Bill

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Housing Bill

Housing Bill
Part 6 — Other provisions about housing
Chapter 1 — Secure tenancies
101

under section 127 was taken as the value of the dwelling-house at the
relevant time.
(3)
But for each complete year which has elapsed after the conveyance or
grant and before the disposal the maximum amount which may be
demanded by the landlord is reduced by one-fifth.
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(4)
This section is subject to section 155C.
155B
Amount of discount which may be demanded by landlord: right to
acquire on rent to mortgage terms
(1)
For the purposes of the covenant mentioned in section 155(3), the
landlord may demand such sum as he considers appropriate, up to and
10
including the maximum amount specified in this section.
(2)
The maximum amount which may be demanded by the landlord is the
discount (if any) to which the tenant was entitled on the making of—
(a)
the initial payment,
(b)
any interim payment made before the disposal, or
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(c)
the final payment if so made,

reduced, in each case, by one-fifth for each complete year which has
elapsed after the making of the initial payment and before the
disposal.”
(5)
The amendments made by this section do not apply in any case where the
20
tenant’s notice under section 122 of the Act (notice claiming to exercise right to
buy) was served before the day on which this section comes into force.
(6)
Subsection (7), however, applies in any such case if the first relevant disposal
to which the covenant for repayment of discount applies takes place on or after
the day on which this section comes into force.
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(7)
In the following provisions—
(a)
section 155(2) and (3) of the Housing Act 1985 (c. 68) (as it has effect
without the amendments made by this section), and
(b)
any covenant for repayment of discount,

any reference (however expressed) to a person being liable to pay an amount
30
to the landlord on demand is to be read as a reference to his being liable to pay
to the landlord so much of that amount (if any) as the landlord may demand.
(8)
In subsections (6) and (7) “covenant for repayment of discount” means the
covenant contained in a conveyance or grant in accordance with section 155 of
that Act.
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150
Repayment of discount: increase attributable to home improvements to be
disregarded
(1)
After section 155B of the Housing Act 1985 (inserted by section 149 of this Act)
insert—
“155C
  Increase attributable to home improvements
40
(1)
In calculating the maximum amount which may be demanded by the
landlord under section 155A, such amount (if any) of the price or
premium paid for the disposal which is attributable to improvements
made to the dwelling-house—

Housing Bill
Part 6 — Other provisions about housing
Chapter 1 — Secure tenancies
102

(a)
by the person by whom the disposal is, or is to be, made, and
(b)
after the conveyance or grant and before the disposal,

shall be disregarded.
(2)
The amount to be disregarded under this section shall be such amount
as may be agreed between the parties or determined by the district
5
valuer.
(3)
The district valuer shall not be required by virtue of this section to make
a determination for the purposes of this section unless—
(a)
it is reasonably practicable for him to do so; and
(b)
his reasonable costs in making the determination are paid by
10
the person by whom the disposal is, or is to be, made.
(4)
If the district valuer does not make a determination for the purposes of
this section (and in default of an agreement), no amount is required to
be disregarded under this section.”
(2)
In section 181 of that Act (jurisdiction of county court) for “and 158” substitute
15
“, 155C and 158”.
151
Deferred resale agreements
(1)
After section 163 of the Housing Act 1985 (c. 68) insert—
“163A
Treatment of deferred resale agreements for purposes of section 155
(1)
If a secure tenant or his successor in title enters into an agreement
20
within subsection (3), any liability arising under the covenant required
by section 155 shall be determined as if a relevant disposal which is not
an exempted disposal had occurred at the appropriate time.
(2)
In subsection (1) “the appropriate time” means—
(a)
the time when the agreement is entered into, or
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(b)
if it was made before the beginning of the discount repayment
period, immediately after the beginning of that period.
(3)
An agreement is within this subsection if it is an agreement between the
secure tenant or his successor in title and any other person—
(a)
which is made (expressly or impliedly) in contemplation of, or
30
in connection with, the tenant exercising, or having exercised,
the right to buy,
(b)
which is made before the end of the discount repayment period,
and
(c)
under which a relevant disposal (other than an exempted
35
disposal) is or may be required to be made to any person after
the end of that period.
(4)
Such an agreement is within subsection (3)—
(a)
whether or not the date on which the disposal is to take place is
specified in the agreement, and
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(b)
whether or not any requirement to make the disposal is or may
be made subject to the fulfilment of any condition.
(5)
The Secretary of State may by order provide—

Housing Bill
Part 6 — Other provisions about housing
Chapter 1 — Secure tenancies
103

(a)
for subsection (1) to apply to agreements of any description
specified in the order in addition to those within subsection (3);
(b)
for subsection (1) not to apply to agreements of any description
so specified to which it would otherwise apply.
(6)
An order under subsection (5)—
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(a)
may make different provision with respect to different cases or
descriptions of case; and
(b)
shall be made by statutory instrument which shall be subject to
annulment in pursuance of a resolution of either House of
Parliament.
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(7)
In this section—

“agreement” includes arrangement;

“the discount repayment period” means the period of three or five
years that applies for the purposes of section 155(2) or (3)
(depending on whether the tenant’s notice under section 122
15
was given before or on or after the date of the coming into force
of section 149 of the Housing Act 2004).”
(2)
The amendment made by this section does not apply in relation to any
agreement or arrangement made before the day on which this section comes
into force.
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Right to buy: landlord’s right of first refusal
152
Right of first refusal for landlord etc.
(1)
After section 156 of the Housing Act 1985 (c. 68) insert—
“156A Right of first refusal for landlord etc.
(1)
A conveyance of the freehold or grant of a lease in pursuance of this
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Part shall contain the following covenant.
(2)
The covenant shall be to the effect that, until the end of the period of ten
years beginning with the conveyance or grant, there will be no relevant
disposal which is not an exempted disposal, unless the prescribed
conditions have been satisfied in relation to that or a previous such
30
disposal.
(3)
In subsection (2) “the prescribed conditions” means such conditions as
may be prescribed by regulations under this section.
(4)
The Secretary of State may by regulations prescribe such conditions as
he considers appropriate for and in connection with conferring on—
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(a)
a landlord who has conveyed a freehold or granted a lease to a
person (“the former tenant”) in pursuance of this Part, or
(b)
such other person as is determined in accordance with the
regulations,

a right of first refusal to have a disposal within subsection (5) made to
40
him for such consideration as is mentioned in section 158.
(5)
The disposals within this subsection are—
(a)
a reconveyance or conveyance of the dwelling-house; and
(b)
a surrender or assignment of the lease.

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Part 6 — Other provisions about housing
Chapter 1 — Secure tenancies
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(6)
Regulations under this section may, in particular, make provision—
(a)
for the former tenant to offer to make such a disposal to such
person or persons as may be prescribed;
(b)
for a prescribed recipient of such an offer to be able either to
accept the offer or to nominate some other person as the person
5
by whom the offer may be accepted;
(c)
for the person who may be so nominated to be either a person
of a prescribed description or a person whom the prescribed
recipient considers, having regard to any prescribed matters, to
be a more appropriate person to accept the offer;
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(d)
for a prescribed recipient making such a nomination to give a
notification of the nomination to the person nominated, the
former tenant and any other prescribed person;
(e)
for authorising a nominated person to accept the offer and for
determining which acceptance is to be effective where the offer
15
is accepted by more than one person;
(f)
for the period within which the offer may be accepted or within
which any other prescribed step is to be, or may be, taken;
(g)
for the circumstances in which the right of first refusal lapses
(whether following the service of a notice to complete or
20
otherwise) with the result that the former tenant is able to make
a disposal on the open market;
(h)
for the manner in which any offer, acceptance or notification is
to be communicated.
(7)
In subsection (6) any reference to the former tenant is a reference to the
25
former tenant or his successor in title.

Nothing in that subsection affects the generality of subsection (4).
(8)
Regulations under this section—
(a)
may make different provision with respect to different cases or
descriptions of case; and
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(b)
shall be made by statutory instrument which shall be subject to
annulment in pursuance of a resolution of either House of
Parliament.
(9)
A disposal in breach of the covenant mentioned in subsection (2) shall
be void.”
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(2)
In section 157 of that Act (restriction on disposal of dwelling-houses in
National Parks etc.), omit the following—
(a)
in subsection (2), the words “, subject to subsection (4),”; and
(b)
subsections (4) and (5) (which provide for a landlord’s right of first
refusal).
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(3)
In section 158 of that Act (consideration for conveyance or surrender under
section 157)—
(a)
in the sidenote, for “reconveyance or surrender under section 157”
substitute “disposal under section 156A”;
(b)
for subsection (1) substitute—
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“(1)
The consideration for such a disposal as is mentioned in section
156A(4) shall be such amount as may be agreed between the
parties, or determined by the district valuer, as being the
amount which is to be taken to be the value of the dwelling-

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Part 6 — Other provisions about housing
Chapter 1 — Secure tenancies
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house at the time when the offer is made (as determined in
accordance with regulations under that section).”;
(c)
in subsection (3), for “the landlord accepts the offer,” substitute “the
offer is accepted in accordance with regulations under section 156A,”;
and
5
(d)
in subsection (4), for “to reconvey or surrender” substitute “(as
determined in accordance with regulations under section 156A).”
(4)
The amendments made by this section do not apply in relation to a conveyance
of the freehold or grant of a lease in pursuance of Part 5 of that Act if the notice
under section 122 of the Act (tenant’s notice claiming to exercise right to buy)
10
was served before the day on which this section comes into force.
(5)
Accordingly, nothing in this section affects—
(a)
the operation of a limitation contained in such a conveyance or grant in
accordance with section 157(4) of that Act, or
(b)
the operation, in relation to such a limitation, of section 157(6) (so far as
15
it renders a disposal in breach of covenant void) or section 158
(consideration payable) of that Act.
Right to buy: information
153
Information to help tenants decide whether to exercise right to buy etc.
(1)
After section 121 of the Housing Act 1985 (c. 68) insert—
20
“121A
Information to help tenants decide whether to exercise right to buy
etc.
(1)
Every body which lets dwelling-houses under secure tenancies shall
prepare a document that contains information for its secure tenants
about such matters as are specified in an order made by the Secretary
25
of State).
(2)
The matters that may be so specified are matters which the Secretary of
State considers that it would be desirable for secure tenants to have
information about when considering whether to exercise the right to
buy or the right to acquire on rent to mortgage terms.
30
(3)
The information contained in the document shall be restricted to
information about the specified matters, and the information about
those matters—
(a)
shall be such as the body concerned considers appropriate, but
(b)
shall be in a form which the body considers best suited to
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explaining those matters in simple terms.
(4)
Once a body has prepared the document required by subsection (1), it
shall revise it as often as it considers necessary in order to ensure that
the information contained in it—
(a)
is kept up to date so far as is reasonably practicable, and
40
(b)
reflects any changes in the matters for the time being specified
in an order under this section.
(5)
An order under this section shall be made by statutory instrument
which shall be subject to annulment in pursuance of a resolution of
either House of Parliament.
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