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The Housing (Extension of Right to Buy) Order 1993

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21.  After section 138 insert the following section—

Apportionment of purchase price.

138A.(1) On completion the freeholder shall pay—

(a)to the landlord and to each intermediate landlord (if any), and

(b)to the rent owner of a rentcharge charged on or issuing out of the lease of the landlord or an intermediate landlord,

an amount calculated in accordance with the formula—


  • A is the amount payable to the landlord, intermediate landlord orrent owner;

  • R is the amount which, under this section, is to be taken to be thevalue, immediately before completion, of the lease of the landlordor intermediate landlord (as the case may be) or of the rentchargecharged on or issuing out of such a lease;

  • P is the price payable for the dwelling-house by the tenant (disregarding any reduction to be made under section 153B(3) (payments of rent attributable to purchase price etc.));

  • V is the amount which is the sum of the values, immediately beforecompletion, of the interests in the dwelling-house of—

    • the landlord,

    • intermediate landlords (if any),

    • rent owners as described above (if any), and

    • the freeholder; and

  • S is zero except in a case where the formula is applied to calculate the amount payable to a landlord or an intermediate landlord on which an operative notice of delay (which in this subsection has the same meaning as in section 153B) has been served, and in that case—


    where no operative notice of delay has been served on the freeholder and an operative notice of delay has been served on only one landlord or intermediate landlord, S is the amount of the reduction to be made under section 153B(3), and


    in any other case S is an amount equal to the aggregate of


    the total of any payments on account treated as having been paid by the tenant by virtue of section 153B(2) solely because of the service of the operative notice of delay on the relevant landlord or intermediate landlord, and a rateable apportionment of any such payments as are so treated because of theservice of operative notices of delay both on therelevant landlord or intermediate landlord and on one or more other authorities or bodies, and


    if section 153B(3)(b) applies, a sum equal to the appropriate percentage (as defined in section 153B(4)) of the total referred to in (i) above.

is referred to in sections 150A (apportionment of initial payment), 156A (apportionment of discount recovered) and in paragraph 7Bof Schedule 6A (redemption of freeholder’s share) as the apportionment fraction; and S is referred to in section 150A as rental deduction.

(3) On completion a landlord or intermediate landlord in relation towhich A, under the formula in subsection (1), is a negative amount shallpay to the freeholder an amount equal to A; and that amount shall berecoverable as a civil debt due to the freeholder by that landlord orintermediate landlord.

(4) For the purposes of this section—

(a)the value of an interest immediately before completion shall betaken to be the price which, at that time, it would realise if soldon the open market, free from any mortgage, by a willingvendor on the assumption that this Part did not apply, and

(b)where a lease or a rent charge includes property other than thedwelling-house the value of the interest shall be taken to be that part of the value which is attributable to the dwelling-house.

(5) No payment shall be made under subsection (1) in relation to a lease of the dwelling-house if it is a lease for a term certain and the residue of the term unexpired immediately before completion is a period of less than twelve months or if it is a periodic tenancy.

(6) In this section “rentcharge” and “rent owner” have the same meanings as in the Rentcharges Act 1977.

(7) A landlord or intermediate landlord shall give to the freeholder, if the freeholder so requires by notice in writing served on that landlord or intermediate landlord, such information as that landlord or intermediate landlord has which will assist the freeholder to calculate S under the formula in subsection (1)..

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