Part 6

Other provisions about housing
Chapter 2

Disposals attracting discounts other than under right to buy

Disposals by housing action trusts

Repayment of discount: periods and amounts payable
203
1
Schedule 11 to the Housing Act 1988 (c. 50)
(provisions applicable to certain disposals of houses) is amended as follows.
2
In paragraph 1(2) for the words from “to pay to the housing action trust” to the end of the sub-paragraph substitute “ to the following effect. ”
3
After paragraph 1(2) insert—
3
The covenant shall be to pay to the housing action trust such sum (if any) as the trust may demand in accordance with sub-paragraph (4) on the occasion of the first relevant disposal (other than an exempted disposal) which takes place within the period of five years beginning with the conveyance, grant or assignment.
4
The trust may demand such sum as it considers appropriate, up to and including the maximum amount specified in this paragraph.
5
The maximum amount which may be demanded by the trust is a percentage of the price or premium paid for the first relevant disposal which is equal to the percentage discount given to the purchaser in respect of the disposal of the house under section 79.
6
But for each complete year which has elapsed after the conveyance, grant or assignment and before the first relevant disposal the maximum amount which may be demanded by the trust is reduced by one-fifth.
7
Sub-paragraphs (4) to (6) are subject to paragraph 1A.

Increase in value of house attributable to home improvements
1A
1
In calculating the maximum amount which may be demanded by the housing action trust under paragraph 1, such amount (if any) of the price or premium paid for the first relevant disposal which is attributable to improvements made to the house—
a
by the person by whom the disposal is, or is to be, made, and
b
after the conveyance, grant or assignment and before the disposal,
shall be disregarded.
2
The amount to be disregarded under this paragraph shall be such amount as may be agreed between the parties or determined by the district valuer.
3
The district valuer shall not be required by virtue of this paragraph to make a determination for the purposes of this paragraph unless—
a
it is reasonably practicable for him to do so; and
b
his reasonable costs in making the determination are paid by the person by whom the disposal is, or is to be, made.
4
If the district valuer does not make a determination for the purposes of this paragraph (and in default of an agreement), no amount is required to be disregarded under this paragraph.
4
The amendments made by this section do not apply in any case where—
a
the purchaser has accepted an offer for the disposal of the house from the housing action trust, or
b
the housing action trust has accepted an offer for the disposal of the house from the purchaser,
before the day on which this section comes into force.
5
Subsection (6), however, applies in any such case if the first relevant disposal by the purchaser to which the covenant for repayment of discount applies takes place on or after the day on which this section comes into force.
6
In the following provisions—
a
paragraph 1(2) of Schedule 11 to the Housing Act 1988 (c. 50)
(as it has effect without the amendments made by this section), and
b
any covenant for repayment of discount,
any reference (however expressed) to a person being liable to pay an amount to the housing action trust on demand is to be read as a reference to his being liable to pay to the trust so much of that amount (if any) as the trust may demand.
7
In subsections (5) and (6)
“covenant for repayment of discount” means the covenant contained in a conveyance, grant or assignment in accordance with paragraph 1 of Schedule 11 to that Act.