Housing Act 1985

The right to a shared ownership lease

143 Right to be granted a shared ownership lease.

(1) Where a secure tenant has claimed to exercise the right to buy and—

(a) his right has been established and his notice claiming to exercise it remains in force,

(b) he has claimed the right to a mortgage but is not entitled, or treated as entitled, to a full mortgage, and

(c) he is entitled to defer completion,

he also has the right to be granted a shared ownership lease of the dwelling-house in accordance with the following provisions of this Part.

(2) Where the right to buy belongs to two or more persons jointly, the right to be granted a shared ownership lease also belongs to them jointly.

144 Tenant’s notice claiming to exercise right to shared ownership lease.

(1) A secure tenant claims to exercise the right to be granted a shared ownership lease by written notice to that effect served on the landlord stating the initial share which he proposes to acquire.

(2) The notice may be withdrawn or varied at any time by notice in writing served on the landlord.

(3) On the service of a notice under this section, any notice served by the landlord under section 140 or 141 (landlord’s notices to complete purchase in pursuance of right to buy) shall be deemed to have been withdrawn; and no such notice may be served by the landlord whilst a notice under this section remains in force.

(4) If on the service by the tenant of a further notice under section 134 (claim to exercise right to a mortgage) he becomes entitled, or treated as entitled, to a full mortgage, he ceases to be entitled to exercise the right to be granted a shared ownership lease; and any notice of his under this section shall be deemed to have been withdrawn.

(5) Where a notice under this section is withdrawn, or deemed to have been withdrawn, the tenant may complete the transaction in accordance with the provisions of this Part relating to the right to buy.

145 Tenant’s initial share.

(1) The tenant’s initial share in the dwelling-house shall be a multiple of the prescribed percentage and shall not be less than the minimum initial share.

(2) The prescribed percentage is 12.5 per cent. or such other percentage as the Secretary of State may by order prescribe.

(3) The minimum initial share is 50 per cent. or such other percentage as the Secretary of State may by order prescribe.

(4) An order 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) may contain such transitional provisions as appear to the Secretary of State to be necessary or expedient.

(5) An order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

146 Landlord’s notice admitting or denying right.

Where a notice under section 144 (notice claiming to exercise right to shared ownership lease) has been served by the tenant, the landlord shall, unless the notice is withdrawn, serve on the tenant within four weeks a written notice either—

(a) admitting the tenant’s right, or

(b) denying it and stating the reasons why, in the opinion of the landlord, the tenant does not have the right to be granted a shared ownership lease.

147 Landlord’s notice of initial contribution, etc.

(1) Where a secure tenant has claimed to exercise the right to be granted a shared ownership lease and that right has been established (whether by the landlord’s admission or otherwise), the landlord shall, within eight weeks, serve on the tenant a written notice complying with this section.

(2) The notice shall state—

(a) the amount which, in the opinion of the landlord, should be the amount of the consideration for the grant of the lease on the assumption that the tenant’s initial share is that stated in the notice under section 144; and

(b) the effective discount on an acquisition of that share for that consideration,

determined in each case, in accordance with section 148.

(3) The notice shall state the provisions which, in the opinion of the landlord, should be included in the lease.

(4) Where the landlord is not a housing association, the notice shall state any variation in the provisions which, in the opinion of the landlord, should be contained in the deed by which the mortgage is to be effected.

(5) Where the landlord is a housing association, the landlord shall send a copy of the notice to the Housing Corporation, and the Housing Corporation shall, as soon as practicable after receiving the notice, serve on the tenant a written notice stating any variation in the provisions which, in the opinion of the Housing Corporation, should be contained in the deed by which the mortgage is to be effected.

148 Tenant’s initial contribution and effective discount.

(1) The consideration for the grant of a shared ownership lease (the tenant’s “initial contribution”) shall be determined by the formula—

and the effective discount shall be determined by the formula—

where—

C

=

the tenant’s initial contribution,

E

=

the effective discount,

S

=

the tenant’s initial share expressed as a percentage,

V

=

the value of the dwelling-house at the relevant time, determined in accordance with section 127, and

D

=

the discount which if the tenant were exercising the right to buy would be applicable under sections 129 to 131.

(2) In determining the value of the dwelling-house for the purposes of this section, the assumptions to be made under section 127 (which vary according to whether it is the freehold or a lease which is to be acquired) are those applicable in relation to the dwelling-house for the pruposes of the right to buy.

149 Change of landlord after notice claiming to exercise right to shared ownership lease.

Where the interest of the landlord in the dwelling-house passes from the landlord to another body after a secure tenant has given notice claiming to exercise the right to be granted a shared ownership lease, all parties shall be in the same position as if the other body had become the landlord before the notice was given and had been given that notice and any further notice given by the tenant to the landlord and had taken all steps which the landlord had taken.

150 Duty of landlord to grant shared ownership lease.

(1) Where a secure tenant has claimed to exercise the right to be granted a shared ownership lease and that right has been established, then, as soon as all matters relating to the grant and to the amount to be left outstanding or advanced on the security of the dwelling-house have been agreed or determined, the landlord shall grant the tenant a shared ownership lease of the dwelling-house in accordance with the following provisions of this Part.

(2) If the tenant has failed to pay the rent or any other payment due from him as a tenant for a period of four weeks after it has been lawfully demanded from him, the landlord is not bound to comply with subsection (1) while the whole or part of that payment remains outstanding.

(3) The duty imposed on the landlord by subsection (1) is enforceable by injunction.

151 Terms and effect of grant and mortgage.

(1) A grant of a shared ownership lease in pursuance of this Part shall conform—

(a) with Schedule 8 (terms of shared ownership lease), and

(b) subject to that, with Parts I and III of Schedule 6 (terms of lease granted in pursuance of right to buy);

and part IV of Schedule 6 (charges) applies to a shared ownership lease as it applies to a lease granted in pursuance of the right to buy.

(2) The secure tenancy comes to an end on the grant of the shared ownership lease, and if there is then a sub-tenancy section 139 of the [1925 c. 20.] Law of Property Act 1925 (effect of extinguishment of reversion) applies as on a merger or surrender.

(3) Where the transaction is duly completed the sum of £100 deposited by the tenant with the landlord in pursuance of section 142 (deferment of completion) shall be treated as having been paid towards the tenant’s initial contribution.

(4) A deed by which a mortgage is effected where the tenant exercises both the right to a mortgage and the right to be granted a shared ownership lease shall, unless otherwise agreed between the parties, conform with—

(a) Schedule 7 (terms of mortgage granted in pursuance of right to a mortgage), and

(b) without prejudice to that, with Schedule 9 (right to further advances).

152 Landlord’s first notice to complete.

(1) The landlord may, subject to the provisions of this section, serve on the tenant at any time a written notice requiring him—

(a) if all relevant matters have been agreed or determined, to complete the transaction within a period stated in the notice, or

(b) if any relevant matters are outstanding, to serve on the landlord within that period a written notice to that effect specifying the matters,

and informing the tenant of the effect of this section and of section 153(1), (2) and (4) (landlord’s second notice to complete and its effect).

(2) The period stated in a notice under this section shall be such period (of at least 56 days) as may be reasonable in the circumstances.

(3) A notice under this section shall not be served before the end of the period of two years after the service of the tenant’s notice under section 122 (notice claiming to exercise right to buy) or, if later, nine months after the service of the notice under section 135 (landlord’s notice of terms and amount of mortgage).

(4) A notice under this section shall not be served if—

(a) a requirement for the determination or re-determination of the value of the dwelling-house by the district valuer has not been complied with,

(b) proceedings for the determination of any other relevant matter have not been disposed of, or

(c) any relevant matter stated to be outstanding in a written notice served on the landlord by the tenant has not been agreed in writing or determined.

(5) In this section “relevant matters” means matters relating to the grant and to the amount to be left outstanding or advanced on the security of the dwelling-house.

153 Landlord’s second notice to complete.

(1) If the tenant does not comply with a notice under section 152 (landlord’s first notice to complete), the landlord may serve on him a further written notice—

(a) requiring him to complete the transaction within a period stated in the notice, and

(b) informing him of the effect of this section in the event of his failing to comply.

(2) The period stated in a notice under this section shall be such period (of at least 56 days) as may be reasonable in the circumstances.

(3) At any time before the end of that period (or that period as previously extended) the landlord may by a written notice served on the tenant extend it (or further extend it).

(4) If the tenant does not comply with a notice under this section, the notice claiming to exercise the right to be granted a shared ownership lease and the notice claiming to exercise the right to buy shall be deemed to have been withdrawn at the end of that period (or, as the case may require, that period as extended under subsection (3)).

(5) If a notice under this section has been served on the tenant and by virtue of section 150(2) (failure of tenant to pay rent, etc.) the landlord is not bound to complete, the tenant shall be deemed not to comply with the notice.