The Housing (Preservation of Right to Buy) Regulations 1989

Completion of purchase in pursuance of right to buy

138.    Duty of landlord to convey freehold or grant lease.

(1) Where a qualifying person has claimed to exercise the right to buy and that right has been established, then, as soon as all matters relating to the grant have been agreed or determined, the landlord shall make to the qualifying person–

(a)if the dwelling-house is a house and the landlord owns the freehold, a grant of the dwelling-house for an estate in fee simple absolute, or

(b)if the landlord does not own the freehold or if the dwelling-house is a flat (whether or not the landlord owns the freehold), a grant of a lease of the dwelling-house,

in accordance with the following provisions of this Part.

(2) If the qualifying person has failed to pay the rent or any other payment due from him as a tenant for a period of four weeks after it has been lawfully demanded from him, the landlord is not bound to comply with subsection (1) while the whole or part of that payment remains outstanding.

(3) The duty imposed on the landlord by subsection (1) is enforceable by injunction.

139.    Terms and effect of conveyance or grant.

(1) A conveyance of the freehold executed in pursuance of the right to buy shall conform with Parts I and II of Schedule 6; a grant of a lease so executed shall conform with Parts I and III of that Schedule; and Part IV of that Schedule has effect in relation to certain charges.

(2) The tenancy held by the qualifying person comes to an end on the grant to him of an estate in fee simple, or of a lease, in pursuance of the provisions of this Part; and if there is then a subtenancy section 139 of the Law of Property Act 1925[1925 c. 20.] (effect of extinguishment of reversion) applies as on a merger or surrender.

140.    Landlord’s first notice to complete.

(1) The landlord may, subject to the provisions of this section, serve on the qualifying person at any time a written notice requiring him–

(a)if all relevant matters have been agreed or determined, to complete the transaction within a period stated in the notice, or

(b)if any relevant matters are outstanding, to serve on the landlord within that period a written notice to that effect specifying the matters,

and informing the qualifying person of the effect of this section and of section 141(1), (2) and (4) (landlord’s second notice to complete).

(2) The period stated in a notice under this section shall be such period (of at least 56 days) as may be reasonable in the circumstances.

(3) A notice under this section shall not be served earlier than one year after the service on the qualifying person of–

(a)where he exercises his right under section 128 (determination of value by district valuer), the notice under subsection (5) of that section (further notice by landlord after determination), or

(b)where he does not exercise that right, the notice under section 125 (landlord’s notice of purchase price and other matters).

(3A) Where the qualifying person is entitled to defer completion, a notice under this section shall not be served earlier than three years after service of the notice under section 122 (qualifying person’s notice claiming to exercise right to buy), if that period expires after whichever is applicable of the periods specified in subsection (3).

(4) A notice under this section shall not be served if–

(b)proceedings for the determination of any relevant matter have not been disposed of, or

(c)any relevant matter stated to be outstanding in a written notice served on the landlord by the qualifying person has not been agreed in writing or determined.

(5) In this section “relevant matters” means matters relating to the grant.

141.    Landlord’s second notice to complete.

(1) If the qualifying person does not comply with a notice under section 140 (landlord’s first notice to complete), the landlord may serve on him a further written notice–

(a)requiring him to complete the transaction within a period stated in the notice, and

(b)informing him of the effect of this section in the event of his failing to comply.

(2) The period stated in a notice under this section shall be such period (of at least 56 days) as may be reasonable in the circumstances.

(3) At any time before the end of that period (or that period as previously extended) the landlord may by a written notice served on the qualifying person extend it (or further extend it).

(4) If the qualifying person does not comply with a notice under this section the notice claiming to exercise the right to buy shall be deemed to be withdrawn at the end of that period (or as the case may require, that period as extended under subsection (3)).

(5) If a notice under this section has been served on the qualifying person and by virtue of section 138(2) (failure of qualifying person to pay rent, etc) the landlord is not bound to complete, the qualifying person shall be deemed not to comply with the notice.

142.    When qualifying person is entitled to defer completion.

(1) A qualifying person is entitled to defer completion if–

(a)his reckonable amount calculated in accordance with Schedule 7A (or the aggregate of such amounts where the right to buy is being exercised by more than one person) is less than the purchase price of the dwelling-house;

(b)he has, within the period mentioned below, served on the landlord a notice claiming to exercise the right to defer completion; and

(c)he has, within the same period, deposited the sum of £150 with the landlord.

(2) The notice must be served and the sum of £150 deposited within the period of three months beginning with the service on the qualifying person–

(a)where he exercises his right under section 128 (determination of value by district valuer), of the notice under subsection (5) of that section (further notice by landlord after determination), or

(b)where he does not exercise that right, of the notice under section 125 (landlord’s notice of purchase price and other matters),

or within that period as extended in writing by the landlord.

(3) Where a qualifying person has served on the landlord a notice under subsection (1)(b), the landlord shall, as soon as practicable after the date on which the notice is served, serve on the qualifying person a notice either–

(a)admitting the qualifying person’s right to defer completion, or

(b)denying it and stating the reasons why, in the landlord’s opinion, the qualifying person does not have the right.

(4) If in pursuance of a notice under this section the qualifying person deposits the sum of £150 with the landlord, then–

(a)if he completes the transaction, the sum shall be treated as having been paid towards the purchase price, and

(b)if he does not complete the transaction but withdraws his notice claiming to exercise the right to buy, or is deemed to have withdrawn it by virtue of section 141(4) (effect of failure to comply with landlord’s second notice to complete), the sum shall be returned to him.

153A.    Qualifying person’s notices of delay.

(1) Where a qualifying person has claimed to exercise the right to buy, he may serve on his landlord a notice (in this section referred to as an “initial notice of delay”) in any of the following cases, namely,–

(a)where the landlord has failed to serve a notice under section 124 within the period appropriate under subsection (2) of that section;

(b)where the tenant’s right to buy has been established and the landlord has failed to serve a notice under section 125 within the period appropriate under subsection (1) of that section; or

(e)where the tenant considers that delays on the part of the landlord are preventing him from exercising expeditiously his right to buy;

and where an initial notice of delay specifies either of the cases in paragraphs (a) and (b) any reference in this section or section 153B to the default date is a reference to the end of the period referred to in the paragraph in question.

(2) An initial notice of delay–

(a)shall specify the most recent action of which the qualifying person is aware which has been taken by the landlord pursuant of this Part of this Act; and

(b)shall specify a period (in this section referred to as “the response period”), not being less than one month, beginning on the date of service of the notice, within which the service by the landlord of a counter notice under subsection (3) will have the effect of cancelling the initial notice of delay.

(3) Within the response period specified in an initial notice of delay or at any time thereafter, the landlord may serve on the qualifying person a counter notice in either of the following circumstances–

(a)if the initial notice specifies either of the cases in paragraphs (a) and (b) of subsection (1) and the landlord has served, or is serving together with the counter notice, the required notice under section 124 or section 125, as the case may be; or

(b)if the initial notice specifies the case in subsection (1)(e) and there is no action under this Part which, at the beginning of the response period, it was for the landlord to take in order to allow the qualifying person expeditiously to exercise his right to buy and which remains to be taken at the time of service of the counter notice.

(4) A counter notice under subsection (3) shall specifiy the circumstances by virtue of which it is served.

(5) At any time when–

(a)the response period specified in an initial notice of delay has expired, and

(b)the landlord has not served a counter notice under subsection (3),

the qualifying person may serve on the landlord a notice (in this section and section 153B referred to as an “operative notice of delay”) which shall state that section 153B will apply to payments of rent made by the qualifying person on or after the default date or, if the initial notice of delay specified the case in subsection (1)(e), the date of the service of the notice.

(6) If, after a qualifying person has served an initial notice of delay, a counter notice has been served under subsection (3), then, whether or not the qualifying person has also served an operative notice of delay, if any of the cases in subsection (1) again arises, the qualifying person may serve a further initial notice of delay and the provisions of this section shall apply again accordingly.

153B.    Payments of rent attributable to purchase price etc.

(1) Where a qualifying person has served on his landlord an operative notice of delay, this section applies to any payment of rent which is made on or after the default date or, as the case may be, the date of the service of the notice and before the occurence of any of the following events (and, if more than one event occurs, before the earliest to occur)–

(a)the service by the landlord of a counter notice under section 153A(3);

(b)the date on which the landlord makes to the qualifying person the grant required by section 138;

(d)the date on which the qualifying person withdraws or is deemed to have withdrawn the notice claiming to exercise the right to buy; and

(e)the date on which the qualifying person ceases to be entitled to exercise the right to buy.

(2) Except where this section ceases to apply on a date determined under paragraph (d) or (e) of subsection (1), so much of any payment of rent to which this section applies as does not consist of–

(a)a sum due on account of rates, or

(b)a service charge (as defined in section 621A),

shall be treated not only as a payment of rent but also as a payment on account by the qualifying person which is to be taken into account in accordance with subsection (3).

(3) In a case where subsection (2) applies, the amount which, apart from this section, would be the purchase price shall be reduced by an amount equal to the aggregate of–

(a)the total of any payments on account treated as having been paid by the qualifying person by virtue of subsection (2); and

(b)if those payments on account are derived from payments of rent referable to a period of more than twelve months, a sum equal to the appropriate percentage of the total referred to in paragraph (a).

(4) In subsection (3)(b) “the appropriate percentage” means 50 per cent.