Housing (Scotland) Act 1987

House loans: special cases S

216 House loans to tenants exercising right to purchase. S

(1) A tenant who seeks to exercise his right to purchase a house under Part III and who has received an offer to sell (or, as the case may be, an amended offer to sell) from the landlord shall be entitled, together with any joint purchaser under section 61(6) (and the said tenant and any joint purchaser are referred to in this section as “the applicant”) to apply—

(a) in the case where the landlord is a development corporation (including an urban development corporation) or the Scottish Special Housing Association, to that body; or

[F1 (b) in a case where the landlord is the Housing Corporation or a housing association registered in the register maintained by the Housing Corporation, to the Housing Corporation;

(bi) in a case where the landlord is a housing association registered in the register maintained by Scottish Homes, to Scottish Homes;]

(c) in any other case, to the local authority for the area in which the house is situated,

for a loan of an amount not exceeding the price fixed under section 62 to assist him to purchase the house.

(2) A loan application under subsection (1)—

(a) must be served on the landlord or other body—

(i) within one month after service on the tenant of the offer to sell (or, where there has been service of one or more amended offers to sell or there has been a determination by the Lands Tribunal under section 65(3) which does not require the issue of an amended offer to sell, of the latest of these); or

(ii) within one year and 10 months after service of the application to purchase if the tenant has, in terms of section 67, a fixed price option as regards the house;

(b) shall be in such form as the Secretary of State shall by order made by statutory instrument prescribe, and shall contain—

(i) the amount of the loan which the applicant seeks;

(ii) the applicant’s annual gross income and his net income after payment of income tax and national insurance contributions;

(iii) any liabilities in respect of credit sales or other fixed outgoings of the applicant; and

(iv) a statement that the applicant has applied for and been unable to obtain a sufficient building society loan; and

(c) shall be accompanied by evidence of the matters referred to in sub-paragraphs (ii) to (iv) of paragraph (b).

(3) Subject to such requirements as the Secretary of State may by order made by statutory instrument impose, a landlord or other body which receives an application under subsection (1) shall, where it is satisfied on reasonable inquiry (which shall include reasonable opportunity for the applicant to amend his application) that the information contained in the loan application is correct, serve on the applicant an offer of loan, which shall specify a maximum amount of loan calculated in accordance with regulations made by statutory instrument by the Secretary of State.

(4) A landlord or other body to which application has been made under subsection (1) shall complete its inquiries and either—

(a) issue the offer of loan under subsection (3); or

(b) refuse the application on the ground that information contained in the loan application is incorrect in a material respect,

within 2 months of the date of service of the loan application.

(5) An applicant who wishes to accept an offer of loan shall do so along with his notice of acceptance under sections 66(1) or 67(1).

(6) An offer of loan under subsection (3) together with an acceptance under subsection (5) shall constitute an agreement by the landlord or other body, subject to such requirements as the Secretary of State may by order made by statutory instrument impose, to lend to the applicant for the purpose of purchasing the house—

(a) the maximum amount of loan mentioned in subsection (3); or

(b) the amount of loan sought by the applicant,

whichever is the lesser, on the execution by the applicant of a standard security over the house.

(7) An applicant who is aggrieved by a refusal under subsection (4)(b), or by a failure to comply with the said subsection, or by the calculation of maximum amount of loan mentioned in subsection (3) may, within 2 months of the date of the refusal or failure or of the offer of loan, as the case may be, raise proceedings by way of summary application in the sheriff court for the district in which the house is situated for declarator that he is entitled to a loan in accordance with subsection (3).

(8) Where in proceedings under subsection (7) the sheriff grants declarator that the applicant is entitled to a loan, such declarator shall have effect as if it were an offer of loan of the amount specified in the declarator duly issued under this section by the landlord or other body.

(9) A statutory instrument made under subsection (3) or (6) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

[F2 (10) This section does not apply in the case of the purchase of a house by way of the rent to loan scheme.]

Textual Amendments

F1 S. 216(1)(b)(bi) substituted for s. 216(1)(b) by Housing (Scotland) Act 1988 (c. 43, SIF 61), ss. 1, 3, Sch. 2 para. 13

F2 S. 216(10) inserted (27.9.1993) by 1993 c. 28, s. 143(7); S.I. 1993/2163, art. 2, Sch. 1.

Modifications etc. (not altering text)

C1 S. 216 modified (13.3.1992) by S. I. 1992/325, regs. 3, 5, 7, Sch. 1

217 Duty of local authorities to offer loans to meet expenses of improvement of houses in housing action areas. S

(1) Where the owner or the lessee of a house situated in a housing action area is willing to carry out improvement works which are, in the opinion of the local authority, required in order to bring the house up to the standard specified under section 90(3) or by virtue of section 91(3), he may, not later than 9 months from the date of publication and service of a notice of a final resolution passed under Part I of Schedule 8, apply to the local authority for a loan.

(2) Subject to this section, if the local authority are satisfied that the applicant can reasonably be expected to meet obligations assumed by him in pursuance of this section in respect of a loan of the amount of the expenditure to which the application relates, the authority shall offer to make a loan of that amount to the applicant, the loan to be secured to the authority by a standard security over the premises consisting of or comprising the house.

(3) Subject to this section, if the local authority are not so satisfied, but consider that the applicant can reasonably be expected to meet obligations assumed by him in pursuance of this section in respect of a loan of a smaller amount, the authority may, if they think fit, offer to make a loan of that smaller amount to the applicant, the loan to be secured as aforesaid.

(4) Any offer made by the local authority under this section shall contain a condition to the effect that, if an improvement grant or a repairs grant becomes payable under Part XIII in respect of the expenditure to which the application under this section relates, the authority shall not be required to lend a sum greater than the amount of the expenditure to which the application relates after deduction of the amount of the grant.

(5) The local authority shall not make an offer under the foregoing provisions of this section unless they are satisfied that—

(a) the applicant’s estate or interest in the house amounts to ownership or a lease for a period which will not expire before the date for final repayment of the loan, and

(b) according to a valuation made on behalf of the local authority, the amount of the principal of the loan does not exceed the value which it is estimated the subjects comprised in the security will bear after improvement of the house or houses to the standard specified under section 90(3) or by virtue of section 91(3).

(6) The rate of interest payable on a loan under this section shall be a variable rate calculated under section 219.

(7) Subject to this section, the loan offered by the local authority under this section shall be subject to such reasonable terms as the authority may specify in their offer.

(8) The local authority’s offer may in particular include any such terms as are described in paragraphs 4 to 7 of Schedule 17 (repayment of principal and interest) and provision for the advance being made by instalments from time to time as the works of improvement progress.

(9) Where an improvement grant or repairs grant is payable partly in respect of expenditure to which the application under this section relates, and partly in respect of other expenditure, the reference in subsection (4) to an improvement grant or repairs grant shall be taken as a reference to the part of the grant which in the opinion of the local authority is attributable to the expenditure to which the application under this section relates.

218 Duty of local authority to offer loans to meet expenses of repairs. S

(1) Where the person having control of a house is willing to carry out the works necessary to rectify the defects specified in the notice under section 108(2), he may, not later than 21 days from the date of service of the said notice, or from the date of determination of any appeal, apply to the local authority for a loan.

(2) Subsections (2) to (8) of section 217 shall apply for the purposes of this section as they apply for the purposes of that section, but as if in subsection (5)(b) for the words from “improvement” to the end there were substituted the words “the works necessary to rectify the defects specified in the repair notice have been executed.”.