Council tenant right to buy process

When a tenant is applying for the right to buy their home, there are a series of steps that the landlord and tenant must follow. In general, there are prescribed forms that have to be used at different stages.

The tenant should complete the form RTB1,[1] which can be obtained from the landlord, or from Gov.uk.

The form must name the people who are claiming the right to buy, including any joint tenants or members of the family.[2]

RTB2

When the landlord receives the completed RTB1 form, it sends a notice (form RTB2) stating whether or not the tenant has the right to buy.[3] The landlord must send this within four weeks, or within eight weeks if the tenant has not been a tenant of that landlord for three years. If the landlord denies the tenant the right to buy, reasons must be given. The reasons must be based on objective grounds, for example, if the tenant does not meet the qualifying criteria.

A tenant who disagrees with these reasons, or who simply gets no reply from the landlord, should firstly raise it with the landlord and can ultimately apply to the county court for a ruling. Alternatively, the tenant can ask the Secretary of State to intervene.[4]

If the landlord refuses the sale on the basis that the property is particularly suitable for older people then the tenant can appeal to the First-tier Tribunal (Property Chamber) in England.[5] The appeal must be made within 56 days of the tenant receiving the RTB2 form.

RTB 6/RTB 7

The tenant can serve an 'initial notice of delay' (form RTB6) if the landlord does not provide the RTB2 within the time limit. The RTB2 notice must give the landlord at least one month to comply with its obligations.[6] Within this period, the landlord can serve a counter notice (form RTB7). This notice allows the landlord to meet its obligations, to state it has already done so, or to deny that it has not met its obligations.

RTB8

If the landlord does not serve the counter notice within the time limit, then the tenant can serve an 'operative notice of delay' (form RTB8).[7] This has the effect of net rent payments during the delay period, counting both as rent and as payment towards the purchase of the property. Housing Benefit paid within this period counts as rent.[8]

The tenant must continue to pay the rent during the right to buy procedure, or they could risk possession proceedings being taken. An outright order would mean the loss of the right to buy and rent arrears would mean that the landlord might not need to complete the sale.

If the landlord agrees that there is a right to buy, it must send an offer notice (sometimes called a section 125 notice) stating the sale price, amount of discount, an estimate of service charges and improvement costs, details of any structural defects and other terms and conditions of the sale.[9]

Time limits

The landlord must send this notice within eight weeks of sending the RTB2 form in the case of freehold properties, and within 12 weeks for leasehold properties. If the landlord does not serve the section 125 notice within the time limit, then the tenant can take action, for example by applying to the county court. In one case, the landlord's failure to send a section 125 notice resulted in the tenant having to reapply for the right to buy, and therefore pay more for her property as there had been an increase in the property's value over time.

The Ombudsman found that there had been maladministration on the part of the local authority, and ordered it to pay the applicant the difference between the two prices, together with compensation.[10]

The tenant can appeal to the district valuer if they believe the landlord's valuation is too high, for example because the landlord's valuation does not take account of physical defects in the property.

To appeal, the tenant must write to the landlord within three months of service of the section 125 notice, to say that the tenant wants a determination of value under section 128 of the Housing Act 1985. The tenant then has four weeks to put a case to the district valuer. This may include the tenant's own surveyor's report or valuer's report. Clearly, price comparisons with similar properties will be of vital importance. If the tenant has any concerns that any structural defects have not been taken into account in the section 125 notice they must be raised at this stage.[11]

The district valuer's decision is final and may increase, decrease or confirm the landlord's valuation.

If the tenant wants to question any other term of the section 125 notice, such as service charges or level of discount, they should first raise it with the landlord.

The tenant can apply to the county court for a ruling if there is still disagreement.

Within 12 weeks of receiving the section 125 notice, or of receiving the district valuer's valuation, the tenant must write to the landlord to let them know whether they wish to go ahead with the right to buy[12] or to withdraw the application.

A reminder can be sent if the tenant does not contact the landlord following the section 125 notice.[13]

The tenant has 28 days to respond, or longer if the landlord allows or if it is unreasonable to expect the tenant to respond in 28 days (for example if they are in hospital, for instance).

The application fails if the tenant does not respond to the reminder letter in the time allowed.

The landlord can amend the valuation set out in the section 125 notice where the valuation was made as a result of an error or omission,[14] or in line with statutory protection following a change in the level of discount.

Whilst the Court of Appeal held that a tenant agreed to a revised offer by signing the related acceptance form and discharged by mutual agreement any previous notice, [15] it is unclear if a landlord can unilaterally amend an offer in circumstances other than as a result of an error or omission.

Once the terms have been agreed and accepted, the purchase can be completed.

The landlord does not have to complete if circumstances have changed (for example loss of secure tenancy, outright possession order, rent arrears).

If the tenant wants to go ahead, they should get an independent survey, in addition to the mortgage lender's survey.

If during the period of the application the tenant thinks that the landlord is delaying the tenant's exercise of the right, then the tenant can take the action described in Landlord's reply, above.

The tenant can also apply to the county court for an injunction to enforce the landlord to comply with its duties.[16]

The tenant cannot seek damages from the landlord for a breach of its duties.[17]

If a tenant fails to complete or agree to the terms then the landlord can serve a section 140 notice (the landlord's first notice to complete) giving the tenant at least eight weeks to complete. This notice can only be served after three months of the service of a section 125 notice.[18]

If the tenant has not completed once the section 140 notice has expired, then the landlord can serve a section 141 notice (landlord's second notice to complete). This again must give at least eight weeks for the tenant to complete.

The right to buy application is considered as being withdrawn if the tenant does not complete, or has rent arrears that were sought more than four weeks ago.

The tenant can make a fresh application at any time in the future provided they still meet the qualifying criteria.

Even though there is no statutory mechanism for abandoning a claim for the right to buy, the right to buy can be deemed to have been abandoned where the circumstances show that the claimant has decided not to pursue that claim, or where the tenant behaves in a way inconsistent with the right to buy application.

Once abandoned, the claim is not capable of being revived.

Case law has also found that if a tenant makes a second application for the right to buy, this means that their first application is automatically withdrawn.[19]