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PART IIIMISCELLANEOUS PROVISIONS

Amendments relating to the right to buy

Discount

18.—(1) In Article 9 of the Order of 1983—

(a)for paragraph (1) there shall be substituted the following paragraph—

(1) Subject to the following provisions of this Chapter, a person exercising the right to buy is entitled to a discount of a percentage calculated by reference to the period which is to be taken into account in accordance with Part I of Schedule 1A (qualifying period for right to buy and discount).;

(b)for paragraph (2) there shall be substituted the following paragraphs—

(2) The discount is, subject to any order under paragraph (2A)—

(a)in the case of a house, 32 per cent. plus one per cent. for each complete year by which the qualifying period exceeds two years, up to a maximum of 60 per cent.;

(b)in the case of a flat, 44 per cent. plus two per cent. for each complete year by which the qualifying period exceeds two years, up to a maximum of 70 per cent.

(2A) The Department may by order made with the consent of the Department of Finance and Personnel provide that, in such cases as may be specified in the order—

(a)the minimum percentage discount,

(b)the percentage increase for each complete year of the qualifying period after the first two, or

(c)the maximum percentage discount,

shall be such percentage, higher than that specified in paragraph (2), as may be specified in the order.

(2B) An order under paragraph (2A) may contain such incidental, supplementary or transitional provisions as appear to the Department to be necessary or expedient..

(2) In Article 106(3) of the Order of 1983, after the word “under” (where it occurs for the first time), there shall be inserted the words “Article 9(2A)”.

(3) The amendments made by paragraphs (1) and (2) do not apply where—

(a)the tenant’s notice claiming to exercise the right to buy or, as the case may be, to acquire an additional share under an equity-sharing lease was served before the commencement of those paragraphs, and

(b)the Executive has before commencement served its notice as to the terms of exercise of that right, that is, its notice under Article 11 of the Order of 1983 or paragraph 3(4) of Schedule 6 to the Order of 1986,

but without prejudice to the tenant’s right to withdraw the notice served before commencement and serve a new notice.

(4) In the following provisions (which in the case of disposals at a discount require a covenant for repayment of a proportion of the discount if the dwelling-house is disposed of within five years)—

for “five years” there shall be substituted “three years” and for “20 per cent.” there shall be substituted “one-third”.

(5) A conveyance or lease containing the covenant required by any of the provisions mentioned in paragraph (4) which was executed before the amendments made by that paragraph came into operation shall, provided no amount was then or had previously been payable under the covenant, have effect with such modifications as may be necessary to bring it into conformity with the amendments.

Notice of structural defects

19.  In Article 11 of the Order of 1983, at the end there shall be added the following paragraph—

(4) The notice shall contain a description of any structural defect known to the Executive affecting the dwelling-house or the building in which it is situated or any other building over which the tenant will have rights under the conveyance or lease..

Deferment of completion

20.—(1) In Article 17(4)(c) of the Order of 1983 for the words “two years” there shall be substituted the words “three years”.

(2) In Article 17(5)(c), (6) and (8) of that Order and in Articles 29(2)(c) and 33(2) of the Order of 1986, for “£100” there shall be substituted “£150”.

(3) The above amendments apply where notice under Article 17(5) of that Order claiming to be entitled to defer completion is served after the day of the coming into operation of this Article.

(4) The above amendments to Article 17 of the Order of 1983 and Articles 29(2)(c) and 33(2) of the Order of 1986 also apply where notice under Article 17(5) of the Order of 1983 claiming to be entitled to defer completion was served before the day of the coming into operation of this Article if the tenant—

(a)serves a further notice on the Executive claiming the benefit of the longer period, and

(b)at the same time deposits with the Executive an additional £50;

and Article 17(8) of the Order of 1983 applies to the sum so deposited as if it had been deposited in pursuance of a notice under that Article.

(5) No such further notice may be served if the Executive has already served a notice under Article 17(3) of the Order of 1983 or Article 33(3) of the Order of 1986.

(6) Articles 21, 23, 23A and 46 of the Order of 1983 shall apply to the provisions of this Article relating to a further notice or deposit in the same manner as those Articles apply for the purposes of Part II of the Order of 1983.

(7) Article 34 of the Order of 1986 shall apply to the provisions of this Article in the same manner as that Article applies for the purposes of Part III of that Order.

Circumstances in which right to buy does not arise

21.  In Part I of Schedule 1 to the Order of 1983, in paragraph 3(1)(a), for the words “other features” there shall be substituted the words “other major features so far as those have not been provided by the prospective purchaser”.

Right to a loan in certain cases after exercise of right to buy

22.—(1) The Department may by regulations provide that where—

(a)a lease of a flat has been granted in pursuance of Chapter I of Part II of the Order of 1983 (the right to buy), and

(b)the landlord is the Executive,

the tenant has, in such circumstances as may be prescribed, a right to a loan in respect of service charges to which this Article applies.

(2) This Article applies to service charges in respect of repairs (whether to the flat, the building in which it is situated or any other building or land) which are payable in the period beginning with the grant of the lease and ending with the tenth anniversary of the grant or, where the lease provides for service charges to be payable by reference to a specified annual period, with the end of the tenth such period beginning after the grant of the lease.

(3) The regulations may provide that the right—

(a)arises only in respect of so much of a service charge as exceeds a minimum qualifying amount and does not exceed a maximum qualifying amount, and

(b)does not arise unless the amount thus qualifying for a loan itself exceeds a minimum amount,

the amounts being either prescribed or ascertained in a prescribed manner.

(4) The regulations shall provide that the right—

(a)is to leave the whole or part of the service charge outstanding; and

(b)arises only if the tenant is unable to obtain from a lending institution, within the meaning of Article 3(4) of the Order of 1983, a loan sufficient to assist him to meet the service charges.

(5) The regulations may, as regards procedure for exercising the right, provide—

(a)that a demand for service charges in respect of repairs shall inform the tenant whether, in the Executive’s opinion, he is entitled to a loan and, if he is, what he must do to claim it;

(b)that the right must be claimed within a prescribed period of the demand; and

(c)that on the right being claimed the lender shall inform the tenant of the terms of the loan and of the prescribed period within which the tenant may accept the offer.

(6) In this Article “repairs” includes works for making good structural defects.

Power to make loans in other cases

23.—(1) The Department may by regulations provide that where—

(a)the Executive is the landlord of a flat under a long lease granted or assigned by the Executive, and

(b)the tenant is liable under the terms of the lease to pay service charges in respect of repairs (whether to the flat, the building in which it is situated or any other building or land),

the Executive may, in such circumstances as may be prescribed, make a loan to the tenant in respect of the service charges.

(2) Paragraphs (4) and (6) of Article 22 shall apply in relation to a loan made under this Article in the same manner as they apply to a loan made under that Article.

(3) Where the tenant is entitled to a loan in pursuance of regulations made under Article 22, the power conferred by regulations under this Article may be exercised in respect of any part of the service charge which does not qualify for a loan under that Article.

(4) This Article does not affect any other power of the Executive to make loans.

Supplementary provisions as to regulations under Articles 22 and 23

24.—(1) This Article applies to regulations under Article 22 or 23 (regulations conferring right to loan, or power to make loan, in respect of service charges).

(2) The regulations shall provide that the loan—

(a)in the case of a loan made in pursuance of regulations under Article 22 (the right to a loan), shall be on such terms as may be prescribed, and

(b)in the case of a loan made by virtue of regulations under Article 23 (power to make loan), shall be on such terms as the Executive may determine subject to any provision made by the regulations;

and shall, in either case, be secured by a mortgage of the flat in question, but may be made whether or not the flat is adequate security for the loan.

(3) The regulations may—

(a)as regards the rate of interest payable on the loan, either prescribe the rate or provide that the rate shall be such reasonable rate as may be determined by the Executive;

(b)as regards the administrative expenses of the Executive in connection with a loan, provide that the Executive may charge such expenses to the borrower, to the extent that they do not exceed such amount as may be prescribed, and that the expenses so charged may, at the option of the borrower in the case of a loan under Article 22 and that the option of the lender in the case of a loan under Article 23, be added to the amount of the loan.

(4) The regulations may apply whenever the lease in question was granted or assigned or whenever the service charge in question became payable.

(5) The regulations—

(a)may contain such incidental, supplementary and transitional provisions as the Department considers appropriate; and

(b)shall be made subject to negative resolution.