Fire Precautions Act 1971

36 Power of local authorities to make loans to meet expenditure on certain alterations to buildings occasioned by this Act

(1) Where there is in force a notice under section 3 of this Act relating to any premises, any person proposing to incur expenditure in making to any part of the relevant building any structural or other alterations the making of which is requisite as being a step mentioned in a notice served in connection with those premises under section 5(4), 8(5) or 12(8)(b) of this Act, may apply for a loan to the local authority in whose area the premises are situated.

(2) Subject to this section, if the local authority consider that the applicant—

(a) can reasonably be expected to meet obligations assumed by him in pursuance of this section in respect of a loan of the amount of the expenditure to which the application relates; or

(b) cannot reasonably be expected to meet obligations so assumed by him in respect of a loan of that amount, but can reasonably be expected to meet obligations so assumed by him in respect of a loan of a smaller amount,

the local authority may, if they think fit, offer to enter into a contract with the applicant for a loan by the local authority to the applicant of the appropriate amount, to be secured to the local authority by a mortgage of the applicant's interest in the relevant building or the part of it to which the application relates.

In this subsection " the appropriate amount ", in a case falling within paragraph (a) above, means the amount of the expenditure to which the application relates, and in a case falling within paragraph (b) above means the smaller amount there referred to.

(3) The local authority shall not make an offer under the foregoing provisions of this section unless they are satisfied—

(a) that the applicant's interest in the relevant building or the part of it to which the application relates amounts to an estate in fee simple absolute in possession or an estate for a term of years absolute which will not expire before the date for final repayment of the loan; and

(b) that, according to a valuation made on behalf of the local authority, the amount of the principal of the loan does not exceed the value which it is estimated the mortgaged security will bear when the proposed alterations have been carried out.

(4) Subject to subsection (5) of this section, every loan under this section shall bear interest at the rate which, on the date of the contract to make the loan, is the rate for the time being determined by the Treasury in accordance with section 5 of the [1968 c. 13.] National Loans Act 1968 in respect of local loans made on the security of local rates on that date and for the same period as that loan.

In this subsection " local loans " and " made on the security of local rates " have the same meanings as in section 6(2) of the National Loans Act 1968.

(5) Where, on the date of a contract for a loan under this section, there are two or more rates of interest for the time being determined by the Treasury as mentioned in subsection (4) above, the reference in that subsection to the rate so determined shall be read as a reference to such one of those rates as may be specified in a direction given by the Treasury for the purposes of this section.

(6) The Treasury shall cause any direction given under subsection (5) above to be published in the London and Edinburgh Gazettes as soon as may be after giving it.

(7) Subject to the foregoing provisions of this section, the contract offered by the local authority under this section shall require proof of title and shall contain such other reasonable terms as the local authority may specify in their offer.

(8) The local authority's offer may in particular include any such terms as are described in section 43(3)(c) of the [1958 c. 42.] Housing (Financial Provisions) Act 1958 (repayment of principal and interest), and provision for the advance being made by instalments from time to time as the alterations progress.

(9) In its application to Scotland this section shall have effect subject to the following modifications—

(a) in subsection (2), for the words " mortgage of " there shall be substituted the words " heritable security over ", and at the end there shall be inserted the words " and ' heritable security ' means any security capable of being constituted over any interest in land by disposition or assignation of that interest in security of any debt and of being recorded in the Register of Sasines ";

(b) in subsection (3)(a), for the words from " an estate in fee simple " to " years absolute " there shall be substituted the words " ownership or a lease ";

(c) in subsection (3)(b), for the words " mortgaged security " there shall be substituted the words " security subjects ";

(d) in subsection (8), for the words " 43(3)(c) of the Housing (Financial Provisions) Act 1958 " there shall be substituted the words " 49(3)(c) of the [1968 c. 31.] Housing (Financial Provisions) (Scotland) Act 1968 ".