8 Leases at a low rent.E+W
(1)For the purposes of this Chapter a lease of a flat is a lease at a low rent if either no rent was payable under it in respect of the flat during the initial year or the aggregate amount of rent so payable during that year did not exceed the following amount, namely—
(a)where the lease was entered into before 1st April 1963, two-thirds of the letting value of the flat (on the same terms) on the date of the commencement of the lease;
(b)where—
(i)the lease was entered into either on or after 1st April 1963 but before 1st April 1990, or on or after 1st April 1990 in pursuance of a contract made before that date, and
(ii)the flat had a rateable value at the date of the commencement of the lease or else at any time before 1st April 1990,
two-thirds of the rateable value of the flat on the appropriate date; or
(c)in any other case, £1,000 if the flat is in Greater London or £250 if elsewhere.
(2)For the purposes of subsection (1)—
(a)“the initial year”, in relation to any lease, means the period of one year beginning with the date of the commencement of the lease;
(b)“the appropriate date” means the date of the commencement of the lease or, if the flat in question did not have a rateable value on that date, the date on which the flat first had a rateable value;
(c)section 25(1), (2) and (4) of the M1Rent Act 1977 (rateable value etc.) shall apply, with any necessary modifications, for the purpose of determining the amount of the rateable value of a flat on a particular date;
(d)“rent” means rent reserved as such, and there shall be disregarded any part of the rent expressed to be payable in consideration of services to be provided, or of repairs, maintenance or insurance to be effected by the landlord, or to be payable in respect of the cost thereof to the landlord under the lease or a superior landlord; and
(e)there shall be disregarded any term of the lease providing for suspension or reduction of rent in the event of damage to property demised, or for any penal addition to the rent in the event of a contravention of or non-compliance with the terms of the lease or an agreement collateral thereto.
(3)In subsection (1)(a) above the reference to letting value shall be construed in like manner as, under the law of England and Wales, the reference to letting value is to be construed where it appears in the proviso to section 4(1) of the M2Leasehold Reform Act 1967 (meaning of “low rent”).
(4)Accordingly, in determining the letting value of a flat at any time for the purposes of subsection (1)(a) above, regard shall be had to whether, and (if so) in what amount, a premium might then have been lawfully demanded as the whole or part of the consideration for the letting.
(5)Where, by virtue of section 7(4), a lease which has been renewed on one or more occasions is to be treated as a long lease for the purposes of this Chapter, then for the purpose of determining under this section whether it is for those purposes a long lease at a low rent—
(a)the lease shall be deemed to have been entered into on the date of the last renewal of the lease; and
(b)that date shall be deemed to be the date of the commencement of the lease.
(6)Subsection (2)(a) above shall have effect in relation to any shared ownership lease falling within section 7(1)(d) as if the reference to the date of commencement of the lease were a reference to the date on which the tenant’s total share became 100 per cent; and section 7(7) shall apply for the interpretation of this subsection.
(7)In this section any reference to a flat let under a lease includes a reference to any appurtenant property (within the meaning of section 1) which on the relevant date is let with the flat to the tenant under the lease.