Housing Act 1985

228 Duty of local housing authority to offer loan to meet expenses of compulsory improvement.

(1) If a person who is liable—

(a) to incur expenditure in complying with an improvement notice served, or undertaking accepted, under this Part, or

(b) to make a payment as directed by a court under section 217(5) (contribution from third party deriving benefit from execution of works),

applies to the local housing authority for a loan, the authority shall, subject to the following provisions of this section, offer to enter into a contract with him for a loan by them to be secured by a mortgage of his interest in the dwelling concerned.

(2) The application shall be made in writing within the period of three months beginning with the date on which the improvement notice becomes operative or the undertaking is accepted or the payment is to be made as directed by the court, or such longer period as the authority by permission given in writing may allow.

(3) The authority shall not make an offer unless they are satisfied that the applicant can reasonably be expected to meet the obligations assumed by him in pursuance of this section in respect of the loan; and if the authority are not so satisfied as regards a loan of the amount applied for, they may, if they think fit, offer a loan of a smaller amount as regards which they are so satisfied.

(4) The authority shall not make an offer unless they are satisfied—

(a) that the applicant’s interest in the dwelling concerned is an estate in fee simple absolute in possession or an estate for a term of years which will not expire before the date for final repayment of the loan, and

(b) that, according to a valuation made on their behalf, the amount of the principal of the loan does not exceed the value which it is estimated that the mortgaged security will bear after improvement of the dwelling to the full standard or, as the case may be, to the reduced standard.

(5) The contract shall contain a condition to the effect that if—

(a) an improvement grant or intermediate grant become payable in respect of the expenditure in question, or

(b) such a grant becomes payable partly in respect of that expenditure and partly in respect of other expenditure or another payment,

the authority shall not be required to lend more than the amount of the expenditure or payment remaining after deducting the grant or, as the case may be, that part of the grant which in the opinion of the authority is attributable to that expenditure or payment.

(6) The contract offered by the authority shall require proof of title and contain such other reasonable terms as the authority may specify in their offer, and in particular may provide for the advance to be made by instalments as the works progress.

(7) The rate of interest payable on the loan shall be such as the Secretary of State may direct, either generally or in any particular case; and the Secretary of State may, if he thinks fit, give directions, either generally or in any particular case, as to the time within which a loan under this section, or any part of such a loan, is to be repaid.