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The Housing (Extension of Right to Buy) Order 1993

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33.  After section 150 (duty to convey freehold), insert the following sections—

Apportionment of initial payment.

150A.(1) Subject to section 150B (power to agree final apportionment), on completion the freeholder shall pay—

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

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

a sum calculated by multiplying the amount of the secure tenant’s initial payment (disregarding any rental deduction to be made) by the apportionment fraction applicable to that authority, body or person (ascertained in accordance with section 138A) less, in a case where an operative notice of delay has been served, any rental deduction so applicable (and so ascertained).

(2) On completion a landlord or intermediate landlord in relation to which the amount to be paid by the freeholder under subsection (1) is a negative amount shall pay to the freeholder a sum equal to that amount; and that sum shall be recovered as a civil debt due to the freeholder by that landlord or intermediate landlord.

(3) 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.

(4) In this section—

  • “apportionment fraction” has the meaning given by section 138A(2) (apportionment of purchase price),

  • “operative notice of delay” has the same meaning as in section 153B (payments of rent attributable to purchase price etc.),

  • “rental deduction” has the meaning given by section 138A(2) (apportionment of purchase price), and

  • “rentcharge” and “rent owner” have the same meanings as in the Rentcharges Act 1977.

Power to agree final apportionment.

150B.(1) If it appears to the freeholder and the other authorities, bodies or persons entitled to share in the apportionment of the initial payment to be made by the secure tenant to the freeholder (“the parties”) that the payment is, in all the circumstances, likely to be sufficient to provide adequate compensation for the parties other than the freeholder for the loss of their respective interests in the dwelling-house, the parties may agree that the freeholder shall be solely entitled to the final and any interim payments to be made by the tenant or his successor in title (together, if so agreed, with any discount which may be recovered by the freeholder by virtue of section 155 (repayment of discount on early disposal)).

(2) In the event of all the parties making such an agreement, section 150A (apportionment of initial payment) shall not apply and the parties may make instead such other apportionment as they consider to be fair and reasonable..

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