The Housing (Right to Acquire) Regulations 1997

Dwelling-houses where the debt is equal to or greater than the purchase price plus discount

13.—(1) The right to acquire does not arise if the net debt or the peak debt attributable to the dwelling-house on the date of service of the tenant’s notice under section 122 (tenant’s notice claiming to exercise right to acquire) is equal to or greater than the purchase price plus the discount.

(2) In sub-paragraph (1) the net debt is the amount of the relevant costs, as defined in sub-paragraph (4), less the amount of public subsidy as defined in sub-paragraph (5).

(3) In sub-paragraph (1) the peak debt is the amount under a loan agreement, as defined in sub-paragraph (6), that is the portion of the maximum amount which the landlord may borrow under a loan agreement which is attributable to the dwelling-house.

(4) In sub-paragraph (2) the “relevant costs” means the costs incurred by the landlord in respect of the dwelling-house, the construction of the dwelling-house (including the costs of development works and the acquisition of land) but does not include the costs of—

(a) works of repair or maintenance;

(b) works to deal with any defect affecting the dwelling-house;

(c) works of improvement where they are paid for on or after the date of service of the tenant’s notice under section 122 unless—

(i) the landlord has before that date entered into a written contract for the carrying out of the works; or

(ii) the tenant has agreed in writing to the carrying out of the works and either the works have been carried out no later than the date of service of the landlord’s notice under section 125 (landlord’s notice of purchase price and other matters) or the works will be carried out under the proposed terms of the conveyance.

(5) In sub-paragraph (2) “public subsidy” means grant or other financial assistance of any kind used by the landlord in whole or in part in connection with the acquisition, construction (including the costs of development and the acquisition of land), repair, maintenance or improvement of the dwelling-house where such grant or assistance is received from—

• the Housing Corporation in England and Housing for Wales in Wales under section 18 of the [1996 c. 52.] Housing Act 1996 (social housing grants),

• the Secretary of State under section 126 of the [1996 c. 53.] Housing Grants, Construction and Regeneration Act 1996 under the programme designated “City Challenge” in England and the programmes designated the “Strategic Development Scheme” and “Welsh Capital Challenge” in Wales,

• a local housing authority where grant is paid pursuant to an application by the landlord under Part VIII (grants towards the costs of improvements and repairs, etc.) of the [1989 c. 42.] Local Government and Housing Act 1989 or Chapter I of Part I (grants &c. for renewal of private sector housing) of the [1996 c. 53.] Housing Grants, Construction and Regeneration Act 1996,

• National Lottery, and

• a local authority in a case where the local authority has conveyed the freehold or the leasehold of land to the landlord at a price which is below the market value of the land at the time of the conveyance.

(6) In sub-paragraph (3) a “loan agreement” means an agreement—

(a) for a loan between a lender and the landlord which is wholly or partly secured by a charge (however created or arising) on the landlord’s interest in the dwelling-house,

(b) which specifies the portion of the maximum amount which the landlord may borrow in any period which is attributable to the dwelling-house, and

(c) which is for the purpose of the provision of monies for use in connection with the acquisition of land held for housing purposes and housing stock pursuant to a disposal under section 32 (power to dispose of land held for the purposes of this Part) of the Housing Act 1985; and where a loan is for such a purpose it may include the construction of dwelling-houses (including the costs of development works and the acquisition of land) and works of repair, maintenance or improvement to dwelling-houses pursuant to such acquisition.