Housing Act 1985

11 (1) For the purposes of paragraph 3 (additional contributions) and paragraph 6 (payment for outstanding share on disposal) the value of the dwelling-house, or a part of the dwelling-house, at any time is the amount agreed between the parties or determined by the district valuer as the amount which, in accordance with this paragraph, is to be taken as its value at that time.

(2) That value shall be taken to be the price which the interest of the tenant in the dwelling-house or part would realise if sold on the open market by a willing vendor—

(a) on the assumption that the liabilities mentioned in sub-paragraph (3) would be discharged by the vendor, and

(b) disregarding the matters specified in sub-paragraph (4).

(3) The liabilities referred to in sub-paragraph (2)(a) are—

(a) any mortgages of the tenant’s interest,

(b) any liability under the covenant required by paragraph 6 (payment for outstanding share on disposal), and

(c) any liability under the covenant required by section 155 (repayment of discount on early disposal).

(4) The matters to be disregarded in pursuance of sub-paragraph (2)(b) are any interests or rights over the dwelling-house created by the tenant, any improvements made by the tenant or any of the persons mentioned in section 127(4) (certain predecessors as secure tenant) and any failure by the tenant or any of those persons—

(a) where the dwelling-house is a house, to keep the dwelling-house in good repair (including decorative repair);

(b) where the dwelling-house is a flat, to keep the interior of the dwelling-house in such repair.