Right to Buy Landlord’s Completion Notices
by Helen Lisney, Senior Legal Assistant
When the Government delivered its budget on 30 October 2024 it announced that the right to buy discounts would be reduced with effect from 21 November 2024 and a consultation on wider reform to the right to buy scheme would be undertaken.
The maximum discount available when buying a property under the right to buy scheme, dependent on the length of qualifying tenancy, is 70 % of the valuation. This amount is subject to a cap – up until 21 November 2024 the maximum discount was capped at £102,400. From that date the cap for the East Midlands was amended to £24,000.
Unsurprisingly, this change led to a sudden influx of right to buy applications within that 3 week period up to 21 November – we had more applications in that period than we had in the previous 12 months!
Most of the applications were received in reaction to the budget and it is likely that many of the applicants are not in a position to buy. In view of this, and as there will be a huge increase in administration, it is a good idea to have a process to manage the applications in the most efficient way possible.
The right to buy process is set out in part V of the Housing Act 1985 (the Act). The Act sets out specific timescales for each part of the process. There are notices that the tenant can serve but this note details the notices that the Landlord can serve to ensure that all matters are dealt with in a timely fashion
S.125E – Landlord’s Notice in Default
Once the Landlord has served the section 125 offer notice setting out the purchase price and other matters in relation to the purchase, the tenant has 12 weeks to serve a written notice on the Landlord stating that he intends to pursue the claim, or wishes to withdraw it.
If at the end of that 12 week period the Landlord has not received such a notice then it may serve the tenant a written notice requiring to serve the notice within 28 days, and informing him of the effect of not complying. If the tenant does not comply with this notice (or any agreed extension) then the right to buy shall deemed to be withdrawn at the end of the 28 day period.
S.140 – Landlord’s First Notice to Complete
If at any time after the tenant has served a notice of the intention to proceed the matter is failing to progress, and not less than three months after the service of the section 125 offer notice, the Landlord can serve a first notice to complete on the Tenant requiring him to complete the purchase with a period stated in the notice (which shall be at least 56 days from service).
S.141 – Landlord’s Second Notice to Complete
If the tenant fails to comply with the first notice to complete within the time specified in the notice, the Landlord can serve a second notice to complete on the tenant. This notice gives the tenant a further period of at least 56 days to complete the purchase. If the tenant fails to complete the purchase then at the end of the period specified in the notice the right to buy application is deemed to be withdrawn.
If the application is deemed to be withdrawn, the tenant will need to make a fresh application to proceed with the right to buy. Any such application would be subject to the discount cap applicable at that time.
