PART XIV LOANS FOR ACQUISITION OR IMPROVEMENT OF HOUSING

Loans in respect of service charges

450AF1Right to a loan in certain cases after exercise of right to buy.

(1)

The Secretary of State may by regulations provide that where—

(a)

a lease of a flat has been granted in pursuance of Part V (the right to buy), and

(b)

the landlord is the housing authority who granted the lease or another housing authority,

the tenant has, in such circumstances as may be prescribed, a right to a loan in respect of service charges to which this section applies.

(2)

This section applies to service charges in respect of repairs (whether to the flat, the building in which it is situated or any other building or land) which are payable in the period beginning with the grant of the lease and ending with the tenth aniversary of the grant or, where the lease provides for service charges to be payable by reference to a specified annual period, with the end of the tenth such period beginning after the grant of the lease.

(3)

The regulations may provide that the right—

(a)

arises only in respect of so much of a service charge as exceeds a minimum qualifying amount and does not exceed a maximum qualifying amount, and

(b)

does not arise unless the amount thus qualifying for a loan itself exceeds a minimum amount,

the amounts being either prescribed or ascertained in a prescribed manner.

(4)

The regulations shall provide that the right is—

(a)

where the landlord is a housing association, a right to an advance from the F2Corporation, and

(b)

in any other case, a right to leave the whole or part of the service charge outstanding.

(5)

The regulations may, as regards the procedure for exercising the right, provide—

(a)

that a demand for service charges in respect of repairs shall inform the tenant whether, in the landlord’s opinion, he is entitled to a loan and, if he is, what he must do to claim it;

(b)

that the right must be claimed within a prescribed period of the demand; and

(c)

that on the right being claimed the lender shall inform the tenant of the terms of the loan and of the prescribed period within which the tenant may accept the offer.

(6)

In this section—

“housing authority” includes any F3registered housing association other than a co-operative housing association and any unregistered housing association which is a co-operative housing association; and

“repairs”includes works for making good a structural defect.