Housing Act 1985

156 Liability to repay is a charge on the premises. E+W

(1) The liability that may arise under the covenant required by section 155 is a charge on the dwelling-house, taking effect as if it had been created by deed expressed to be by way of legal mortgage.

(2) The charge has priority immediately after any legal charge securing an amount—

(a) left outstanding by the tenant in exercising the right to buy or the right to be granted a shared ownership lease, or

(b) advanced to him by an approved lending institution for the purpose of enabling him to exercise that right, or

(c) further advanced to him by that institution;

but the landlord may at any time by written notice served on an approved lending institution postpone the charge taking effect by virtue of this section to a legal charge securing an amount advanced or further advanced to the tenant by that institution

(3) A charge taking effect by virtue of this section is a land charge for the purposes of section 59 of the M1 Land Registration Act 1925 notwithstanding subsection (5) of that section (exclusion of mortgages), and subsection (2) of that section applies accordingly with respect to its protection and realisation.

[F1 (3A) The covenant required by section 155 (covenant for repayment of discount) does not, by virtue of its binding successors in title of the tenant, bind a person exercising rights under a charge having priority over the charge taking effect by virtue of this section, or a person deriving title under him; and a provision of the conveyance or grant, or of a collateral agreement is void in so far as it purports to authorise a forfeiture, or to impose a penalty or disability, in the event of any such person failing to comply with that covenant.]

(4) The approved lending institutions for the purposes of this section are—

• the [F2 Corporation],

• a building society,

• a bank

• a trustee savings bank,

• an insurance company,

• a friendly society,

and any body specified, or of a class or description specified, in an order made by the Secretary of State with the consent of the Treasury.

(5) An order under subsection (4)—

(a) shall be made by statutary instrument, and

(b) may make different provision with respect to different cases or descriptions of case, including different provision for different areas.

(6) Before making an order varying or revoking a previous order, the Secretary of State shall give an opportunity for representations to be made on behalf of any body which, if the order were made, would cease to be an approved lending institution for the purposes of this section.

Textual Amendments

F1 S. 156(3A) inserted by Housing and Planning Act 1986 (c. 63, SIF 61), s. 24(1)(a), Sch. 5 Pt. I para. 1(2)(5)

F2 Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 140(2), Sch. 17 Pt. II para. 106

Marginal Citations

M1 1925 c. 21.