Housing Act 1985

F1[F2Value of dwelling-houseE+W

F38(1)For the purposes of the final payment or any interim payment, the value of a dwelling-house is the amount which for those purposes—E+W

(a)is agreed at any time between the parties, or

(b)in default of such agreement, is determined at any time by an independent valuer,

as the amount which, in accordance with this paragraph, is to be taken as its value at that time.

(2)Subject to sub-paragraph (6), that value shall be taken to be the price which the interest of the secure tenant in the dwelling-house would realise if sold on the open market by a willing vendor—

(a)on the assumption that the liabilities mentioned in sub-paragraph (3) would be discharged by the vendor, and

(b)disregarding the matters specified in sub-paragraph (4).

(3)The liabilities referred to in sub-paragraph (2)(a) are—

(a)any mortgages of the interest of the secure tenant,

(b)the liability under the covenant required by paragraph 1, and

(c)any liability under the covenant required by section 155(3) (repayment of discount on early disposal).

(4)The matters to be disregarded in pursuance of sub-paragraph (2)(b) are—

(a)any interests or rights created over the dwelling-house by the secure tenant,

(b)any improvements made by the secure tenant or any of the persons mentioned in section 127(4) (certain predecessors as secure tenant), and

(c)any failure by the secure tenant or any of those persons—

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

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

(5)Sub-paragraph (6) applies where, at the time when the value of the dwelling-house is agreed or determined, the dwelling-house—

(a)has been destroyed or damaged by fire, tempest, flood or any other cause against the risk of which it is normal practice to insure, and

(b)has not been fully rebuilt or reinstated.

(6)That value shall be taken to include the value of such of the following as are applicable, namely—

(a)any sums paid or falling to be paid to the secure tenant under a relevant policy in so far as they exceed the cost of any rebuilding or reinstatement which has been carried out;

(b)any rights of the secure tenant under the covenant implied by paragraph 14(3) of Schedule 6 (covenant to rebuild or reinstate); and

(c)any rights of the secure tenant under the covenant implied by paragraph 15(4) of that Schedule (covenant to use best endeavours to secure rebuilding or reinstatement).

(7) In sub-paragraph (6) “ relevant policy ” means a policy insuring the secure tenant against the risk of fire, tempest or flood or any other risk against which it is normal practice to insure.

(8)References in this paragraph to the secure tenant include references to his successors in title.]