Housing Act 1985

Disposal of land held for housing purposes

32Power to dispose of land held for purposes of this Part.

(1)Without prejudice to the provisions of Part V (the right to buy), a local authority have power by this section, and not otherwise, to dispose of land held by them for the purposes of this Part.

(2)A disposal under this section may be effected in any manner but, subject to subsection (3), shall not be made without the consent of the Secretary of State.

(3)No consent is required for the letting of land under a secure tenancy or under what would be a secure tenancy but for any of paragraphs 2 to 12 of Schedule 1 (tenancies, other than long leases, which are not secure).

(4)For the purposes of this section the grant of an option to purchase the freehold of, or any other interest in, land is a disposal and a consent given to such a disposal extends to a disposal made in pursuance of the option.

(5)Sections 128 to 132 of the [1845 c. 18.] Lands Clauses Consolidation Act 1845 (which require surplus land first to be offered to the original owner and to adjoining land-owners) do not apply to the sale by a local authority of land held by them for the purposes of this Part.

33Covenants and conditions which may be imposed.

(1)On a disposal under section 32 the local authority may impose such covenants and conditions as they think fit.

(2)But a condition of any of the following kinds may be imposed only with the consent of the Secretary of State—

(a)a condition limiting the price or premium which may be obtained on a further disposal of a house;

(b)in the case of a sale, a condition reserving a right of pre-emption;

(c)in the case of a lease, a condition precluding the lessee from assigning the lease or granting a sub-lease.

(3)In subsection (2)(b) a condition reserving a right of pre-emption means a condition precluding the purchaser from selling or leasing the land unless—

(a)he first notifies the authority of the proposed sale or lease and offers to sell or lease the land to them, and

(b)the authority refuse the offer or fail to accept it within one month after it is made.

(4)References in this section to the purchaser or lessee include references to his successors in title and any person deriving title under him or his successors in title.

34Consents under ss. 32 and 33.

(1)This section applies in relation to the giving of the Secretary of State’s consent under section 32 or 33.

(2)Consent may be given—

(a)either generally to all local authorities or to a particular authority or description of authority;

(b)either in relation to particular land or in relation to land of a particular description.

(3)Consent may be given subject to conditions.

(4)Consent may, in particular, be given subject to conditions as to the price, premium or rent to be obtained on the disposal including conditions as to the amount by which on the disposal of a house by way of sale or by the grant or assignment of a lease at a premium, the price or premium is to be, or may be, discounted by the local authority.

35Repayment of discount on early disposal.

(1)This section applies where, on a disposal of a house under section 32, a discount is given to the purchaser by the local authority in accordance with a consent given by the Secretary of State under subsection (2) of that section; but this section does not apply in any such case if the consent so provides.

(2)On the disposal the conveyance, grant or assignment shall contain a covenant binding on the purchaser and his successors in title to pay to the authority on demand, if within a period of five years there is a relevant disposal which is not an exempted disposal (but if there is more than one such disposal then only on the first of them), an amount equal to the discount, reduced by 20 per cent for each complete year which has elapsed after the conveyance, grant or assignment and before the further disposal.

36Liability to repay is a charge on the premises.

(1)The liability that may arise under the covenant required by section 35 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)The charge has priority immediately after any legal charge securing an amount—

(a)left outstanding by the purchaser, or

(b)advanced to him by an approved lending institution for the purpose of enabling him to acquire the interest disposed of on the first disposal, or

(c)further advanced to him by that institution;

but the local authority may at any time by written notice served on an approved lending institution postpone the charge taking effect by virtue of this section to a legal charge securing an amount advanced or further advanced to the purchaser by that institution.

(3)A charge taking effect by virtue of this section is a land charge for the purposes of section 59 of the [1925 c. 21.] Land Registration Act 1925 notwithstanding subsection (5) of that section (exclusion of mortgages), and subsection (2) of that section applies accordingly with respect to its protection and realisation.

(4)The approved lending institutions for the purposes of this section are—

• a building society,

• a bank,

• a trustee savings bank,

• an insurance company,

• a friendly society,

and any body specified, or of a class or description specified, in an order made under section 156 (which makes provision in relation to disposals in pursuance of the right to buy corresponding to that made by this section.

37Restriction on disposal of dwelling-houses in National Parks, etc.

(1)Where a conveyance, grant or assignment executed under section 32 is of a house situated in—

(a)a National Park.

(b)an area designated under section 87 of the National Parks and Access to the [1949 c. 97.] Countryside Act 1949 as an area of outstanding natural beauty, or

(c)an area designated as a rural area by order under section 157 (which makes provision in relation to disposals in pursuance of the right to buy corresponding to that made by this section),

the conveyance, grant or assignment may (unless it contains a condition of a kind mentioned in section 33(2)(b) or (c) (right of pre-emption or restriction on assignment)) contain a covenant limiting the freedom of the purchaser (including any successor in title of his and any person deriving title under him or such a successor) to dispose of the house in the manner specified below.

(2)The limitation is that until such time (if any) as may be notified in writing by the local authority to the purchaser or a successor in title of his, there will be no relevant disposal which is not an exempted disposal without the written consent of the authority; but that consent shall not be withheld if the disposal is to a person satisfying the condition stated in subsection (3).

(3)The condition is that the person to whom the disposal is made (or, if it is made to more than one person, at least one of them) has, throughout the period of three years immediately preceding the application for consent—

(a)had his place of work in a region designated by order under section 157(3) which, or part of which, is comprised in the National Park or area, or

(b)had his only or principal home in such a region;

or has had the one in part or parts of that period and the other in the remainder; but the region need not have been the same throughout the period.

(4)A disposal in breach of such a covenant as is mentioned in subsection (1) is void.

(5)The limitation imposed by such a covenant is a local land charge and, if the land is registered under the [1925 c. 21.] Land Registration Act 1925, the Chief Land Registrar shall enter the appropriate restriction on the register of title as if application therefore had been made under section 58 of that Act.

(6)In this section “purchaser” means the person acquiring the interest disposed of by the first disposal.

38Relevant disposals.

(1)A disposal, whether of the whole of part of the house, is a relevant disposal for the purposes of this Part if it is—

(a)a conveyance of the freehold or an assignment of the lease, or

(b)the grant of a lease of sub-lease (other than a mortgage term) for a term of more than 21 years otherwise than at a rack rent.

(2)For the purposes of subsection (1)(b) it shall be assumed—

(a)that any option to renew or extend a lease or sub-lease, whether or not forming part of a series of options, is exercised, and

(b)that any option to terminate a lease or sub-lease is not exercised.

39Exempted disposals.

(1)A disposal is an exempted disposal for the purposes of this Part if—

(a)it is a disposal of the whole of the house and a conveyance of the freehold or an assignment of the lease and the person or each of the persons to whom it is made is a qualifying person (as defined in subsection (2));

(b)it is a vesting of the whole of the house in a person taking under a will or on an intestacy;

(c)it is a disposal of the whole of the house in pursuance of an order made under section 24 of the [1973 c. 18.] Matrimonial Causes Act 1973 (property adjustment orders in connection with matrimonial proceedings) or section 2 of the [1975 c. 63.] Inheritance (Provision for Family and Dependants) Act 1975 (orders as to financial provision to be made from estate;

(d)it is a compulsory disposal; or

(e)the property disposed of is property included with the house by virtue of the defintiion of “house” in section 56 (yard, garden, outhouses, &c.).

(2)For the purposes of subsection (1)(a), a person is a qualifying person in relation to a disposal if—

(a)he is the person or one of the persons by whom the disposal is made,

(b)he is the spouse or a former spouse of that person or one of those persons, or

(c)he is a member of the family of that person or one of those persons and has resided with him throughout the period of twelve months ending with the disposal.

40Meaning of “compulsory disposal”.

In this Part a “compulsory disposal” means a disposal of property which is acquired compulsorily, or is acquired by a person who has made or would have made, or for whom another person has made or would have made, a compulsory purchase order authorising its compulsory purchase for the purposes for which it is acquired.

41Exempted disposals which end liability under covenants.

Where there is a relevant disposal which is an exempted disposal by virtue of section 39(1)(d) or (e) (compulsory disposal or disposal of yard, garden, &c.)—

(a)the covenant required by section 35 (repayment of discount on early disposal) is not binding on the person to whom the disposal is made or any successor in title of his, and that covenant and the charge taking effect by virtue of section 36 (liability to repay a charge on the premises) cease to apply in relation to the property disposed of, and

(b)any such covenant as is mentioned in section 37 (restriction on disposal of houses in National Parks, etc.) ceases to apply in relation to the property disposed of.

42Treatment of options.

(1)For the purposes of this Part the grant of an option enabling a person to call for a relevant disposal which is not an exempted disposal shall be treated as such a disposal made to him.

(2)For the purposes of section 37(2) (requirement of consent to disposal of house in National Park etc.) a consent to such a grant shall be treated as a consent to a disposal made in pursuance of the option.

43Consent required for certain disposals not within s. 32.

(1)The consent of the Secretary of State is required for the disposal by a local authority, otherwise than in pursuance of Part V (the right to buy), of a house belonging to the authority—

(a)which is let on a secure tenancy, or

(b)of which a lease has been granted in pursuance of Part V,

but which has not been acquired or appropriated by the authority for the purposes of this Part.

(2)Consent may be given—

(a)either generally to all local authorities or to any particular local authority or description of authority, and

(b)either generally in relation to all houses or in relation to any particular house or description of house.

(3)Consent may be given subject to conditions.

(4)Consent may, in particular, be given subject to conditions as to the price, premium or rent to be obtained on a disposal of the house, including conditions as to the amount by which, on a disposal of the house by way of sale or by the grant or assignment of a lease at a premium, the price or premium is to be, or may be, discounted by the local authority.

(5)For the purposes of this section the grant of an option to purchase the freehold of, or any other interest in, a house to which this section applies is a disposal and a consent given under this section to such a disposal extends to a disposal made in pursuance of the option.

44Avoidance of certain disposals of houses without consent.

(1)A disposal of a house by a local authority made without the consent required by section 32 or 43 is void, unless—

(a)the disposal is to an individual (or to two or more individuals), and

(b)the disposal does not extend to any other house.

(2)Subsection (1) has effect notwithstanding section 29 of the [1959 c. 53.] Town and Country Planning Act 1959 and section 128(2) of the [1972 c. 70.] Local Government Act 1972 (protection of purchasers dealing with authority).

(3)In this section “house” does not have the extended meaning applicable by virtue of the definition of “housing accommodation” in section 56, but includes a flat.