Arm yourself with a good working knowledge of the complex laws on the rights to buy and acquire, and you could hold on to homes that you’d otherwise have lost

Within a week of coming into office, a Conservative government would tell the ODPM to draft a law extending the right to buy to tenants of registered social landlords. That’s what Caroline Spelman, shadow secretary of state for local and devolved government affairs, said at the recent Conservative party conference.

This remains a controversial topic, with sales under the right to buy dangerously depleting stock in some areas of the country – see “Desperate Newcastle ALMO asks for new limits on right to buy” (HT 8 October, page 13) for a recent example.

However, it is not correct to suggest that housing association tenants do not currently enjoy any right to acquire their homes at a discount: as RSLs know, some of their tenants do indeed have such a right, and many have exercised it. This is a tricky area of law, so it is worth reminding yourself which rights apply to whom, and in what circumstances.

The right to buy

This policy dates back to 1980, and enables secure tenants of certain landlords to acquire, at a discount, the freehold of their home (or a long lease if their home is a flat).

The majority of secure tenants are tenants of local authorities, whereas RSL tenants are usually assured tenants. The right to buy is therefore seen as a right associated with being a local authority tenant. This is misleading because:

  • between the Housing Act 1980 coming into force and the Housing Act 1988 taking effect, housing associations could grant secure tenancies and some of those tenants are still around, with the right to buy
  • when a council transfers homes to a RSL, the existing secure tenants’ rights to buy will usually be preserved; this does not depend on the wording of the tenancy agreement.

That’s confusing enough, but becomes even more so with regard to charitable associations. The secure tenants of charitable RSLs were excluded from the right to buy between the acts of 1980 and 1988, but the transferred right to buy described above does apply even if the new RSL landlord is a charity.

The right to acquire

The right to acquire is a more recent concept, introduced by the Housing Act 1996. The procedure, though, works in a similar way to that for exercising the right to buy.

Married tenants may qualify for the right to acquire by virtue of their spouse’s tenancy history

Again, tenants who benefit from it have a right to acquire the freehold or a long lease of their home, although the discount is less generous than in right to buy purchases.

Furthermore, a tenant does not qualify for the right to acquire solely because he or she has a particular type of tenancy. The right is attached instead to the building that he or she lives in. Broadly speaking, if it was built with public funds, and has always been in the public sector, then there is a good chance that the tenant will have the right to acquire.

The right to acquire therefore attaches to many assured RSL tenants, not just those with secure tenancies.

But even if a tenant has the correct type of tenancy, and lives in a qualifying home, there are numerous other factors that should be checked when an application is made.

The tenant should have lived in a home subject to a “public sector tenancy” for a minimum period, which is shortly to be extended. The period can be made up in different homes, and married tenants may qualify by virtue of their spouse’s history.

The right can be lost if the home is sublet, if the tenant dies, if the landlord obtains a possession order or if the tenant becomes bankrupt. There are also various exceptions based on the property itself: for example, if the property has been adapted for people with special needs.

Procedure

A complex procedure must be followed by landlord and tenant if the right to buy or acquire is exercised. Specific forms must be completed and served within statutory time periods. This is important, as the landlord in Hanoman v Southwark LBC (2004) recently discovered.

Having failed to respond to the tenant’s claim within the appropriate time, the landlord was later forced to complete the sale (HT 30 July, page 10). Landlords should take note, and make sure they have put in place effective guidelines for ensuring that such cases are dealt with promptly.

How it might work

Mr Patel becomes a tenant of ABC District Council in 1986. In 1988 he moves to another property owned by the same council. In 1992, his home is transferred to DoGood Housing Association as part of a large scale voluntary transfer. In 1999 he moves home again, to another property owned by DoGood RSL.

Then, in 2004, he writes to DoGood claiming that he has the right to buy his home and wishes to exercise that right.

Despite all his moves, it is quite possible that Patel does have the right to buy, although all the other qualifying factors and exceptions will have to be taken into account. This is because a preserved right to buy can move with a tenant who moves to another home owned by his RSL.