Housing Act 1985

The right to a mortgage E+W

132 The right to a mortgage. E+W

(1) A secure tenant who has the right to buy has the right, subject to the following provisions of this Part—

(a) to leave the whole or part of the aggregate amount mentioned in section 133(1) outstanding on the security of a first mortgage of the dwelling-house, or

(b) if the landlord is a housing association, to have the whole or part of that amount advanced to him on that security by the [F1 Corporation];

and in this Act that right is referred to as “the right to a mortgage.”

(2) Where the right to buy belongs jointly to two or more persons, the right to a mortgage also belongs to them jointly.

Textual Amendments

F1 Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 140(2), Sch. 17 Pt. II para. 106

133 The amount to be secured. E+W

(1) The amount which a secure tenant exercising the right to a mortgage is entitled to leave outstanding, or have advanced to him, on the security of the dwelling-house is, subject to the limit imposed by this section, the aggregate of—

(a) the purchase price,

(b) so much of the costs incurred by the landlord or the [F2 Corporation] as is chargeable to the tenant under section 178(2) (costs), and

(c) any costs incurred by the tenant and defrayed on his behalf by the landlord or the [F2 Corporation].

(2) The limit is that the amount which the tenant is entitiled to leave outstanding or have advanced to him on the security of the dwelling-house may not exceed—

(a) where the right to a mortgage belongs to one person, the amount to be taken into account, in accordance with regulations under this section, as his available annual income multiplied by such factor as, under the regulations, is appropriate to it;

(b) where the right to a mortgage belongs to more than one person, the aggregate of the amounts to be taken into account in accordance with the regulations as the available annual income of each of them, after multiplying each of those amounts by the factor appropriate to it under the regulations.

(3) The Secretary of State may by regulations make provision for calculating the amount which is to be taken into account under this section as a person’s available annual income and for specifying a factor appropriate to it; and the regulations—

(a) may provide for arriving at a person’s available annual income by deducting from the sums taken into account as his annual income sums related to his needs and commitments, and may exclude sums from those to be taken into account as a person’s annual income, and

(b) may specify different amounts and different factors for different circumstances.

(4) Where the amount which a secure tenant is entitled to leave outstanding on the security of the dwelling-house is reduced by the limit imposed by this section, the landlord may, if it thinks fit and the tenant agrees, treat him as entitled to leave outstanding on that security such amount exceeding the limit, but not exceeding the aggregate mentioned in subsection (1), as the landlord may determine.

(5) References in this Part to a secure tenant being entitled, or treated as entitled, to a “full mortgage” are to his being entitled, or treated as entitled, to leave outstanding or have advanced to him on the security of the dwelling-house an amount equal to the aggregate mentioned in subsection (1).

(6) Regulations under this section—

(a) may make different provision with respect to different cases or descriptions of case, including different provision for different areas, and

(b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

F2 Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 140(2), Sch. 17 Pt. II para. 106

134 Tenant’s notice claiming to exercise right to a mortgage. E+W

(1) A secure tenant cannot exercise his right to a mortgage unless he claims to exercise it by notice in writing served on the landlord, or if the landlord is a housing association, on the [F3 Corporation].

(2) The notice must be served within the period of three months beginning with the service on the tenant 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),

or within that period as extended under the following provisions.

(3) Where there are reasonable grounds for doing so, the landlord or, as the case may be, the [F3 Corporation] shall by notice in writing served on the tenant extend (or further extend) the period within which the tenant’s notice claiming to exercise his right to a mortgage must be served.

(4) If in such a case the landlord or [F3 Corporation] fails to do so, the county court may by order extend or further extend that period until such date as may be specified in the order.

Textual Amendments

F3 Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 140(2), Sch. 17 Pt. II para. 106

135 Landlord’s notice of amount and terms of mortgage. E+W

(1) As soon as practicable after the service on it of a notice under section 134, the landlord or [F4 Corporation] shall serve on the tenant a notice in writing stating—

(a) the amount which, in the opinion of the landlord or [F4 Corporation], the tenant is entitled to leave outstanding or have advanced on the security of the dwelling-house,

(b) how that amount has been arrived at, and

(c) the provisions which, in the opinion of the landlord or [F4 Corporation], should be contained in the deed by which the mortgage is to be effected.

(2) The notice shall be accompanied by a form for use by the tenant in claiming, in accordance with section 142(1), to be entitled to defer completion and shall also inform the tenant of the effect of subsection (4) of that section (right to serve further notice claiming mortgage).

(3) Where, in the opinion of the landlord or [F4 Corporation], the tenant is not entitled to a full mortgage, the notice shall also inform the tenant of the effect of the provisions of this Part relating to the right to be granted a shared ownership lease and shall be accompanied by a form for use by the tenant in claiming to exercise that right in accordance with section 144(1).

(4) The [F4 Corporation] shall send to the landlord a copy of any notice served by it on the tenant under this section.

Textual Amendments

F4 Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 140(2), Sch. 17 Pt. II para. 106