Housing Act 1985

Payment for outstanding share on disposal E+W

6 (1) The lease shall contain a covenant binding on the tenant and his successors in title to pay to the landlord on demand for the outstanding share an amount determined in accordance with sub-paragraph (2) if, at a time when the tenant’s total share is less than 100 per cent., there is—

(a) a relevant disposal which is not an exempted disposal, or

(b) a compulsory disposal.

(2) The amount payable under the covenant shall be determined by the formula—

where—

• P = the amount payable under the covenant,

• V = the value at the time of the disposal (determined in accordance with paragraph 11) of the dwelling-house or, in the case of a compulsory disposal of a part of the dwelling-house, of the part disposed of, and

• S = the tenant’s total share expressed as a percentage.

(3) Section 156 (liability to repay discount a charge on the premises) applies in relation to the liability that may arise under the covenant required by this paragraph as it applies in relation to the liability that may arise under the covenant required by section 155 (repayment of discount on early disposal).

7 The lease shall provide that, on the discharge of a liablility arising under the covenant required by paragraph 6—

(a) the rent payable under the lease, or

(b) in the case of a compulsory disposal of a part of the dwelling-house, the rent payable under the lease so far as relating to that part,

shall be £10 per annum.

8 (1) Where the dwelling-house is a house and the landlord owns the freehold, the lease shall provide that on the discharge of a liability arising under the covenant required by paragraph 6—

(a) any person in whom the tenant’s interest in the dwelling-house is vested, or

(b) in the case of a compulsory disposal of a part of the dwelling-house, any person in whom that part is vested,

is entitled to require the freehold of the dwelling-house, or as the case may be that part of the dwelling-house, to be conveyed either to himself or to such other person as he may direct.

(2) The right so conferred is exercisable at any time during the term of the lease on the person referred to in sub-paragraph (1)(a) or (b) serving written notice on the landlord.

(3) As soon as practicable after such a right as is mentioned in sub-paragraph (1) has become exercisable by any person, the landlord shall serve on him a written notice—

(a) informing him of the right, and

(b) stating the provisions which, in the opinion of the landlord, should be contained in the conveyance.

(4) A conveyance executed in pursuance of such a right—

(a) shall conform with Parts I and II of Schedule 6 (terms of conveyance in pursuance of right to buy), and

(b) where the lease contains any such covenant as is mentioned in section 157 (restriction on disposal of dwelling-houses in National Parks, etc.), shall preserve the effect of that covenant;

and Part IV of Schedule 6 (charges) applies to such a conveyance as it applies to a conveyance of the freehold in pursuance of the right to buy.

(5) A notice required by this paragraph may be withdrawn at any time by notice in writing served on the landlord.