Commentary on Sections Part 6 Section 183: Right to buy: claim suspended or terminated by demolition notice
418.Section 183 of the Housing Act 1985 requires a landlord to complete a Right to Buy sale as soon as all matters relating to the sale have been agreed or determined. Section 183, by the insertion of new section 138A into the Housing Act 1985, suspends that obligation in cases where an initial demolition notice has been served, following the prescribed notification process.
419.The content, period of validity, and the provisions concerning the termination and revocation of initial demolition notices are contained in Schedule 9. Such notices may be served in respect of properties that the landlord intends to demolish within five years. This period may not be extended. Schedule 9 requires landlords to notify tenants of their decision to demolish, giving reasons and the intended timetable for demolition. It also requires them to state (i) the effect of the initial demolition notice (ie, that while it is in force, the landlord's obligation to complete the Right to Buy sale is suspended), (ii) that it does not prevent new Right to Buy applications being made, and (iii) that where a valid Right to Buy claim has been made, the tenant may claim compensation in respect of expenditure reasonably incurred, before the notice was served, on the conveyancing process (see note for new section 138C below).
420.If the landlord subsequently decides not to demolish the property, he must serve a revocation notice upon affected tenants as soon as is reasonably practicable. If it appears to the Secretary of State that a landlord has no intention of demolishing properties subject to an initial demolition notice, he may serve a revocation notice on affected tenants.
421.If a initial demolition notice expires and demolition has not taken place, no further initial demolition notice can be served on that property for a period of five years.
422.Section 183 inserts new section 138A into the Housing Act 1984, which provides that an initial demolition notice suspends the landlord’s obligation to complete the Right to Buy, while new section 138B provides that a final demolition notice terminates an outstanding Right to Buy claim.
423.New section 138C provides that a landlord who serves either an initial or a final demolition notice upon a tenant who has established a valid Right to Buy claim is liable to compensate him for any reasonable costs that he has incurred in respect of the conveyancing process - for example, the costs of legal advice and survey and search fees. Whether costs are reasonable or not can be decided by the county court in the event of disagreement between the tenant and the landlord (see section 181 of the Housing Act 1985). The tenant will have to claim the compensation within three months from the date on which the notice comes into force, and to provide receipts or other documents showing that the expenditure has been incurred.