This page is targeted at housing professionals. Our main site is at www.shelter.org.uk

Right to acquire

This content applies to England

The right to acquire for tenants of private registered providers of social housing.

What is the right to acquire

The right to acquire was for tenants of private registered providers of social housing (PRPSHs) was introduced in Housing Act 1996 but is now contained in the Housing and Regeneration Act 2008.[1] It applies to assured and secure tenants of all PRPSHs (whether charitable or not and including housing trusts) but excluding co-operative housing associations.[2]

The provisions governing the Right to buy scheme apply in relation to the right to acquire except where regulations specify otherwise, for example in relation to the available discounts.[3]

Qualifying

In order to qualify for the right to acquire:

  • the tenant must be an assured tenant or a secure tenant.[4] This includes assured shorthold tenancies provided that they were granted on or after 1 April 2012 and run for a fixed term of two years or more. Tenants with ASTs which are periodic, run for a fixed term of less than two years or began before 1 April 2012 will be excluded as will long leaseholders and tenants paying intermediate rent (this usually relates to shared ownership).[5]
  • neither the tenancy nor the tenant must fall into one of the exclusions to the right to buy (see 'exclusions from exercising the right to buy' on the page on the Right to buy scheme for details), unless the exclusion relates to lettings by charitable registered providers of social housing or trusts, PRPSHs that have not received grants from certain public funds, and some properties specifically for older people[6]
  • the tenant must meet the residence requirements as for the Right to buy scheme.[7]
  • the property must have been built or acquired wholly or in part on or after 1 April 1997 with a social housing grant, using money in the disposal proceeds fund of the registered social landlord or bought from a public sector landlord (eg a local authority).[8]
  • the accommodation must not be in a designated rural area: the Secretary of State may designate certain rural areas as ones where the right to acquire does not arise - this has been done on a number of occasions[9]
  • the property must not be normally be let to people who have special needs and are provided with 'intensive housing assistance' by the landlord.[10]
  • the amount of debt owed on the property must not exceed the purchase price plus the discount due to the tenant.[11]

Joint tenants and members of the tenant's family can exercise the right to acquire in the same way as for the right to buy (see 'eligibility for the right to buy' on the page on the right to buy scheme).[12]

A tenant who has the right to acquire may, with the consent of the landlord, exercise it to buy another property from the same landlord.[13]

Property valuation

The mechanism for calculating the property value and the discount is the same as for the right to buy - see the page Right to buy discounts. However, the Secretary of State has specified a different amount or rate of discount.[14] The discount varies between £9,000 and £16,000 according to the local authority area and is also limited by the provision that the maximum discount is less than 50 per cent of the market value of the property.[15]

Procedure for exercising right

The right to acquire procedure is similar to the right to buy procedure.

Tenant application

Tenants first need to complete form RTA1, which should be available from their landlord.[16] The landlord should then reply to the tenant, telling her/him whether s/he has the right to acquire. This should be done within four weeks, or eight weeks if part of the tenant's qualifying period for the right to acquire has been spent with another landlord. If the landlord denies the tenant the right to acquire, then reasons must be given.

Tenants who have been granted the right to acquire may be offered an alternative property to purchase from their landlord. Landlords do not have a duty to offer an alternative property, and tenants do not have to accept one.

Landlord response

The landlord should then send the tenant an offer notice on form RTA3, within eight weeks of notifying the tenant that they have the right to acquire, or 12 weeks if the property is a flat or maisonette.[17] The offer notice should contain certain information, such as the sale price, an estimate of the next five-years' service charges for repairs and improvements, and the tenant's discount entitlement.[18] Tenants may appeal against the landlord's valuation within three months of receiving the offer notice and the district valuer will make a determination.[19] There is also a right to a review of the valuer's opinion.[20]

Accepting or rejecting the offer

From the time of receiving the offer notice (or where the tenant has appealed, the time of receiving the valuer's determination or redetermination), the tenant has 12 weeks to respond in writing letting the landlord know whether s/he wishes to go ahead with the right to acquire purchase or to withdraw the application.[21] If the tenant does not respond within this time, the landlord can serve a notice requiring such a response within 28 days, and unless unreasonable to do so can treat the application as withdrawn if the tenant does not respond by the deadline.[22] Where there are no disputes about the purchase price or other terms or such disputes have been settled, the landlord can, not less than three months after serving the offer notice, serve a notice requiring the tenant to complete the purchase within a set time frame or to provide details of matters outstanding.[23]

Service charges

A tenant who buys the leasehold of a flat, or sometimes, the lease of a house, will have to pay service charges. There are restrictions on the total amount that can be recovered from the tenant in service charges for repairs, maintenance and improvements work in:

  • the five years following the sale of the property[24]
  • any five-year period, where specified conditions apply[25].

For information on these restrictions see the page Statutory control of service charges.

With effect from 12 August 2014, a PRPSH has the power to waive or reduce service charges for repair, maintenance or improvement works if it considers that the tenant will suffer exceptional hardship otherwise. For more information see the page Paying service charges.

Selling a property bought under the right to acquire

The rules for selling a property bought under the right to acquire are the same as those for the right to buy - see the page on the Sale of property by occupier. Tenants who completed a purchase under the right to acquire before 18 January 2005 will have to repay some or all of their discount if they sell the property within three years, and tenants who completed a purchase under the right to acquire on or after 18 January 2005 will have to repay some or all of the discount if the property is sold within five years of purchase. Deferred sale agreements (see 'sale of the property to a finance company' on the page on sale of property by occupier) will also trigger the repayment of any discount from the date of the sale agreement.

If a tenant who purchased a property under the right to acquire sells it within ten years of purchase, the landlord has the right of first refusal (see 'local authority's right of first refusal' on the page on the Sale of property by occupier).

Wales

The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

[1] s.180 Housing and Regeneration Act 2008

[2] s.180 Housing and Regeneration Act 2008; s.17(2) Housing Act 1996 and para 2, schedule 5, Housing Act 1985.

[3] s.17(2)(b) Housing Act 1996, as amended by s.184 Housing and Regeneration Act 2008.

[4] s.180(1)(b) and s.180(2) Housing and Regeneration Act 2008

[5] s.180(2A) Housing and Regeneration Act 2008, as amended by s.165 Localism Act 2011; reg.4 The Transfer of Tenancies and Right to Acquire (Exclusions) Regulations 2012 SI 2012/696.

[6] schedule 5, Housing Act 1985 as amended by s.17(2)(b) Housing Act 1996 and reg 2(1) and para 40, Schedule 2, The Housing (Right to Acquire) Regulations 1997 SI 1997/619

[7] s.180(1)(e) Housing and Regeneration Act 2008

[8] s.180(1)(c) and s.181, Housing and Regeneration Act 2008

[9] para 1A, Sch.5, Housing Act 1985 as inserted by para 40, sch.2 Housing (Right to Acquire) Regulations 1997 SI 1997/619. See also Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the West Midlands) Order 1997 SI 1997/620; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the South West) Order 1997 SI 1997/621; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the North West and Merseyside) Order 1997 SI 1997/622; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the East) Order 1997 SI 1997/623; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the North East) Order 1997 SI 1997/624; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the South East) Order 1997 SI 1997/625; Housing (Right to Acquire or Enfranchise) (Designated Rural Areas) Order 1999 SI 1999/1307.

[10] para 13, Sch.5, Housing Act 1985 as inserted by para 40, sch.2 Housing (Right to Acquire) Regulations 1997 SI 1997/619

[11] para 12, Sch.5 Housing Act 1985, as amended by Housing Act 2004.

[12] s.17(2) Housing Act 1996, as amended.

[13] s.124A Housing Act 1985, as amended by para 5, sch.2 Housing (Right to Acquire) Regulations 1997 SI 1997/619.

[14] s.17(1)(a) Housing Act 1996, as amended by s.184 Housing and Regeneration Act 2008 and Housing (Right to Acquire) (Discount) Order 2002 SI 2002/1091

[15] Art.2 and Sch. 1 Housing (Right to Acquire) (Discount) Order 2002 SI 2002/1091.

[16] s.122 Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

[17] s.125 Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

[18] s.125(2)-s.125(5) Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

[19] s.128 Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

[20] s.128A and s.128B Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

[21] s.125D Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

[22] s.125E Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

[23] s.140 Housing Act 1985 as amended by Housing (Right to Acquire) Regulations 1997 SI 1997/619.

[24] s.17(2) Housing Act 1996, as amended by s.184 Housing and Regeneration Act 2008; paras 16B – D Sch.6 Housing Act 1985.

[25] Social Landlords Mandatory Reduction of Service Charges (England) Directions 2014.

Back to top