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Housing Bill


Housing Bill
Part 6 — Other provisions about housing
Chapter 2 — Disposals attracting discounts other than under right to buy

121

 

subsection (2), the consideration shall not be reduced under subsection

(3) below the amount necessary to discharge the outstanding sum

secured by the first-mentioned charge at the date of the offer (as

determined in accordance with regulations under section 36A).”

(2)   

In section 33(2) of the Housing Act 1985 (c. 68) (covenants and conditions

5

which may be imposed), after “But” insert “, subject to sections 36A and 37,”.

(3)   

In section 37(1) of that Act (restriction on disposal of dwelling-houses in

National Parks etc.), after “restriction on assignment)” insert “or a covenant as

mentioned in section 36A(3) (right of first refusal for local authority)”.

(4)   

In section 41 of that Act (exempted disposals which end liability under

10

covenants), after paragraph (a) insert—

“(aa)   

the covenant required by section 36A (right of first refusal for

local authority) is not binding on the person to whom the

disposal is made or any successor in title of his, and that

covenant ceases to apply in relation to the property disposed of,

15

and”.

(5)   

The amendments made by this section do not apply in relation to a disposal

under section 32 of that Act if—

(a)   

the purchaser has accepted an offer for the disposal of the house from

the authority, or

20

(b)   

the authority has accepted an offer for the disposal of the house from

the purchaser,

   

before the day on which this section comes into force.

171     

Deferred resale agreements

(1)   

After section 39 of the Housing Act 1985 (c. 68) insert—

25

“39A Treatment of deferred resale agreements for purposes of section 35

(1)   

If a purchaser or his successor in title enters into an agreement within

subsection (3), any liability arising under the covenant required by

section 35 shall be determined as if a relevant disposal which is not an

exempted disposal had occurred at the appropriate time.

30

(2)   

In subsection (1) “the appropriate time” means—

(a)   

the time when the agreement is entered into, or

(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

35

purchaser or his successor in title and any other person—

(a)   

which is made (expressly or impliedly) in contemplation of, or

in connection with, a disposal to be made, or made, under

section 32,

(b)   

which is made before the end of the discount repayment period,

40

and

(c)   

under which a relevant disposal (other than an exempted

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)—

45

 

 

Housing Bill
Part 6 — Other provisions about housing
Chapter 2 — Disposals attracting discounts other than under right to buy

122

 

(a)   

whether or not the date on which the relevant disposal is to take

place is specified in the agreement, and

(b)   

whether or not any requirement to make that disposal is or may

be made subject to the fulfilment of any condition.

(5)   

The Secretary of State may by order provide—

5

(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)—

10

(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.

15

(7)   

In this section—

   

“agreement” includes arrangement;

   

“the discount repayment period” means the period of 3 years that

applies for the purposes of section 35(2) or the period of five

years that applies for the purposes of section 35(3) (depending

20

on whether an offer such as is mentioned in section 168(4) of the

Housing Act 2004 was made before or on or after the coming

into force of that section).”

(2)   

The amendment made by this section does not apply in relation to any

agreement or arrangement made before the the day on which this section

25

comes into force.

Disposals by registered social landlords

172     

Repayment of discount: periods and amounts payable

(1)   

For section 11 of the Housing Act 1996 (c. 52) substitute—

“11     

Covenant for repayment of discount on disposal

30

(1)   

Where on a disposal of a house by a registered social landlord, in

accordance with a consent given by the Relevant Authority under

section 9, a discount has been given to the purchaser, and the consent

does not provide otherwise, the conveyance, grant or assignment shall

contain a covenant binding on the purchaser and his successors in title

35

to the following effect.

(2)   

The covenant shall be to pay to the landlord such sum (if any) as the

landlord may demand in accordance with subsection (3) on the

occasion of the first relevant disposal which is not an exempted

disposal and which takes place within the period of five years

40

beginning with the conveyance, grant or assignment.

(3)   

The landlord may demand such sum as he considers appropriate, up to

and including the maximum amount specified in this section.

 

 

Housing Bill
Part 6 — Other provisions about housing
Chapter 2 — Disposals attracting discounts other than under right to buy

123

 

(4)   

The maximum amount which may be demanded by the landlord is a

percentage of the price or premium paid for the first relevant disposal

which is equal to the percentage discount given to the purchaser in

respect of the disposal of the house by the landlord.

(5)   

But for each complete year which has elapsed after the conveyance,

5

grant or assignment and before the first relevant disposal the maximum

amount which may be demanded by the landlord is reduced by one-

fifth.

(6)   

Subsections (3) to (5) are subject to section 11A.

11A Increase in value of house attributable to home improvements to be

10

disregarded

(1)   

In calculating the maximum amount which may be demanded by the

landlord under section 11, such amount (if any) of the price or premium

paid for the first relevant disposal which is attributable to

improvements made to the house—

15

(a)   

by the person by whom the disposal is, or is to be, made, and

(b)   

after the conveyance, grant or assignment and before the

disposal,

   

shall be disregarded.

(2)   

The amount to be disregarded under this section shall be such amount

20

as may be agreed between the parties or determined by the district

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

25

(b)   

his reasonable costs in making the determination are paid by

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.

30

11B Liability to repay is a charge on the house

(1)   

The liability that may arise under the covenant required by section 11

is a charge on the house, taking effect as if it had been created by deed

expressed to be by way of legal mortgage.

(2)   

Where there is a relevant disposal which is an exempted disposal by

35

virtue of section 15(4)(d) or (e) (compulsory disposal or disposal of

yard, garden, etc.)—

(a)   

the covenant required by section 11 is not binding on the person

to whom the disposal is made or any successor in title of his,

and

40

(b)   

the covenant and the charge taking effect by virtue of this

section cease to apply in relation to the property disposed of.”

(2)   

In section 12, for “section 11” in each place where it occurs substitute “section

11B”.

(3)   

The amendments made by this section do not apply in any case where—

45

 

 

Housing Bill
Part 6 — Other provisions about housing
Chapter 2 — Disposals attracting discounts other than under right to buy

124

 

(a)   

the purchaser has accepted an offer for the disposal of the house from

the landlord, or

(b)   

the landlord has accepted an offer for the disposal of the house from the

purchaser,

   

before the day on which this section comes into force.

5

(4)   

Subsection (5), however, applies in any such case if the first relevant disposal

by the purchaser to which the covenant for repayment of discount applies

takes place on or after the day on which this section comes into force.

(5)   

In the following provisions—

(a)   

section 11(2) of the Housing Act 1996 (c. 52) (as it has effect without the

10

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

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.

15

(6)   

In subsections (4) and (5) “covenant for repayment of discount” means the

covenant contained in a conveyance, grant or assignment in accordance with

section 11 of that Act.

173     

Registered social landlord’s right of first refusal

(1)   

After section 12 of the Housing Act 1996 insert—

20

“12A  Right of first refusal for registered social landlord

(1)   

Where on a disposal of a house by a registered social landlord, in

accordance with a consent given by the Relevant Authority under

section 9, a discount has been given to the purchaser, and the consent

does not provide otherwise, the conveyance, grant or assignment shall

25

contain the following covenant, which shall be binding on the

purchaser and his successors in title.

(2)   

The covenant shall be to the effect that, until the end of the period of ten

years beginning with the conveyance, grant or assignment, there will

be no relevant disposal which is not an exempted disposal, unless the

30

prescribed conditions have been satisfied in relation to that or a

previous such disposal.

(3)   

In subsection (2) “the prescribed conditions” means such conditions as

are prescribed by regulations under this section at the time when the

conveyance, grant or assignment is made.

35

(4)   

The Secretary of State may by regulations prescribe such conditions as

he considers appropriate for and in connection with conferring on—

(a)   

a registered social landlord which has made a disposal as

mentioned in subsection (1), or

(b)   

such other person as is determined in accordance with the

40

regulations,

   

a right of first refusal to have a disposal within subsection (5) made to

him for such consideration as is mentioned in section 12B.

(5)   

The disposals within this subsection are—

(a)   

a reconveyance or conveyance of the house; and

45

 

 

Housing Bill
Part 6 — Other provisions about housing
Chapter 2 — Disposals attracting discounts other than under right to buy

125

 

(b)   

a surrender or assignment of the lease.

(6)   

Regulations under this section may, in particular, make provision—

(a)   

for the purchaser 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

5

accept the offer or to nominate some other person as the person

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

10

be a more appropriate person to accept the offer;

(d)   

for a prescribed recipient making such a nomination to give a

notification of the nomination to the person nominated, the

purchaser and any other prescribed person;

(e)   

for authorising a nominated person to accept the offer and for

15

determining which acceptance is to be effective where the offer

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

20

(whether following the service of a notice to complete or

otherwise) with the result that the purchaser 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.

25

(7)   

In subsection (6) any reference to the purchaser is a reference to the

purchaser 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

30

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.

(9)   

A disposal in breach of the covenant mentioned in subsection (2) shall

35

be void.

(10)   

Where there is a relevant disposal which is an exempted disposal by

virtue of section 15(4)(d) or (e) (compulsory disposal or disposal of

yard, garden, &c)—

(a)   

the covenant required by this section is not binding on the

40

person to whom the disposal is made or any successor in title of

his, and

(b)   

the covenant ceases to apply in relation to the property

disposed of.

12B     

Consideration payable for disposal under section 12A

45

(1)   

The consideration for a disposal made in respect of a right of first

refusal as mentioned in section 12A(4) shall be such amount as may be

agreed between the parties, or determined by the district valuer, as

 

 

Housing Bill
Part 6 — Other provisions about housing
Chapter 2 — Disposals attracting discounts other than under right to buy

126

 

being the amount which is to be taken to be the value of the house at the

time when the offer is made (as determined in accordance with

regulations under that section).

(2)   

That value shall be taken to be the price which, at that time, the interest

to be reconveyed, conveyed, surrendered or assigned would realise if

5

sold on the open market by a willing vendor, on the assumption that

any liability under the covenant required by section 11 (repayment of

discount on early disposal) would be discharged by the vendor.

(3)   

If the offer is accepted in accordance with regulations under section

12A, no payment shall be required in pursuance of any such covenant

10

as is mentioned in subsection (2), but the consideration shall be

reduced, subject to subsection (4), by such amount (if any) as, on a

disposal made at the time the offer was made, being a relevant disposal

which is not an exempted disposal, would fall to be paid under that

covenant.

15

(4)   

Where there is a charge on the house having priority over the charge to

secure payment of the sum due under the covenant mentioned in

subsection (2), the consideration shall not be reduced under subsection

(3) below the amount necessary to discharge the outstanding sum

secured by the first-mentioned charge at the date of the offer (as

20

determined in accordance with regulations under section 12A).”

(2)   

In section 13(1) of the Housing Act 1996 (c. 52) (restriction on disposal of

houses in National Parks, &c), after “restriction on assignment)” insert “or a

covenant as mentioned in section 12A(2) of this Act (right of first refusal for

registered social landlord)”.

25

(3)   

The amendments made by this section do not apply in relation to a disposal

under section 8 of that Act if—

(a)   

the purchaser has accepted an offer for the disposal of the house from

the landlord, or

(b)   

the landlord has accepted an offer for the disposal of the house from the

30

purchaser,

   

before the day on which this section comes into force.

174     

Deferred resale agreements

(1)   

After section 15 of the Housing Act 1996 insert—

“15A Treatment of deferred resale agreements for purposes of section 11

35

(1)   

If a purchaser or his successor in title enters into an agreement within

subsection (3), any liability arising under the covenant required by

section 11 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—

40

(a)   

the time when the agreement is entered into, or

(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

purchaser or his successor in title and any other person—

45

 

 

Housing Bill
Part 6 — Other provisions about housing
Chapter 2 — Disposals attracting discounts other than under right to buy

127

 

(a)   

which is made (expressly or impliedly) in contemplation of, or

in connection with, a disposal to be made, or made, by virtue of

section 8,

(b)   

which is made before the end of the discount repayment period,

and

5

(c)   

under which a relevant disposal which is not an exempted

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 relevant disposal is to take

10

place is specified in the agreement, and

(b)   

whether or not any requirement to make that disposal is or may

be made subject to the fulfilment of any condition.

(5)   

The Secretary of State may by order provide—

(a)   

for subsection (1) to apply to agreements of any description

15

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)—

(a)   

may make different provision with respect to different cases or

20

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.

(7)   

In this section—

25

   

“agreement” includes arrangement;

   

“the discount repayment period” means the period of three or five

years that applies for the purposes of section 11(2) (depending

on whether an offer such as is mentioned in section 172(3) of the

Housing Act 2004 was made before or on or after the coming

30

into force of that section).”

(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.

Disposals by housing action trusts

35

175     

Repayment of discount: periods and amounts payable

(1)   

Schedule 11 to the Housing Act 1988 (c. 50) (provisions applicable to certain

disposals of houses) is amended as follows.

(2)   

In paragraph 1(2) for the words from “to pay to the housing action trust” to the

end of the sub-paragraph substitute “to the following effect.”

40

(3)   

After paragraph 1(2) insert—

     “(3)  

The covenant shall be to pay to the housing action trust such sum (if

any) as the trust may demand in accordance with sub-paragraph (4)

on the occasion of the first relevant disposal (other than an exempted

 

 

 
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