Right to buy scheme for council tenants

The right to buy enables secure tenants who meet the qualifying requirements to buy the freehold or leasehold of the property at a discounted price.

The right to buy applies to tenants whose landlords are:

• district councils

• county councils

• London borough councils

• new towns

• urban development corporations

• housing action trusts

• non-charitable private registered provider of social housing

• the City of London

• the Council of the Isles of Scilly

• the Homes and Communities Agency

• the residuary bodies that replaced the Greater London Council and metropolitan county councils

All landlords offering secure tenancies must publish information about tenants' right to buy, such as details of the costs and responsibilities of home ownership and any restrictions on future disposals imposed, to enable tenants to decide whether to exercise the right.[1] The information must be available to tenants on request.[2]

The failure to provide full information about restrictions imposed on future disposals of properties originally bought under the right to buy procedure has been found to constitute maladministration causing injustice.[3]

In order to qualify for the right to buy and to be able to proceed with the purchase:

• the tenant must be a secure tenant[4] or secure licensee[5]

• neither the tenancy nor the tenant falls into one of the exceptions to the right to buy[6]

• the tenant must meet the residence requirements for the right to buy[7]

Flexible tenancies are a form of secure tenancies and also qualify.

Only secure tenants (this includes flexible tenants) have the right to buy. The only exception is for some previously secure council tenants whose tenancies have transferred to a private registered provider of social housing (PRPSH), formerly known as registered social landlord, for example under the Large Scale Voluntary Transfer (LSVT) provisions. These tenants (who will now be assured tenants) have a 'preserved right to buy'.[8] Other assured tenants of PRPSHs may be able to purchase under the right to acquire.

The right to buy is not available if the tenant does not occupy the property as their only or principal home, however a joint tenant or the tenant's spouse can occupy on their behalf.

Introductory tenants do not have the right to buy. However, time spent as an introductory tenant counts towards the qualifying period for the right to buy and the amount of discount that can be claimed.[9]

Tenants who have had their tenancy demoted due to antisocial behaviour do not have the right to buy while their tenancy is demoted.[10] A PRPSH tenant who has a secure tenancy or who has the preserved right to buy, and who has their tenancy demoted, loses the right to buy that property permanently. This is because, following the period of demotion, their tenancy becomes a standard assured tenancy. They may still have the right to acquire.

Periods spent as a demoted tenant do not count towards the qualifying period for the right to buy.[11]

Where there are joint tenants, any combination of them may exercise the right to buy as long as they all agree.[12] If not all the joint tenants are living in the property as their 'only or principal home', then at least one of the tenants who is occupying in this way must be included in the application.

A tenant has the right to share the right to buy with up to three non-tenants who are members of their family,[13] as long as they all live in the property as their only or principal home and are either:

• the tenant's spouse, or

• a member of the family who has lived in the property with the tenant for the 12 months prior to the application

The landlord has discretion to allow other members of the family who do not meet the residence condition to be included.

Members of the family who are to be included in the right to buy must be included in the tenants' notice claiming the right. Once they have been included, they are treated as if they are joint tenants for the purposes of the right to buy.

Right to buy after a council tenant dies

Successors to secure tenancies can exercise the right to buy and count their own period of occupation before they succeeded to the tenancy for the purposes of calculating the minimum period for the exercise of the right, and the discount.[14]

Where a secure tenant dies during the right to buy procedure, a successor can require that the transaction is completed on the same terms (including the discount) as would have been available if the tenant had lived.[15] However, if no one qualifies to succeed, the right to buy usually ceases to exist as the tenancy is no longer secure, even where the council has been guilty of delaying the transaction.[16]

If a member of the tenant's family was joined to the right to buy under the co-purchaser procedure,[17] and the tenant dies leaving the other applicant in occupation, that other applicant is deemed to be a secure tenant for the purpose of completing the right to buy transaction, provided that they remain in occupation. They can therefore require that the sale be completed, even if there has been a previous succession.[18]

There are a number of situations where the right to buy is not available or where the right can be lost during the period between the point in time when the tenant claims the right to buy and completes on the purchase. These situations may relate to the type of landlord, the type of letting, the landlord's ownership of the property, and factors concerning the tenant's conduct.

There are some situations where the right to buy will not be available. These include the following situations:[19]

• where the tenancy or licence is not secure

• lettings by charitable PRPSHs or trusts, some co-operative housing associations and registered social landlords that have not received grants from certain public funds

• some properties let in connection with employment where the main purpose of the building or buildings is not related to housing. This might include, for example, properties within school grounds

• where the property is in a cemetery and is let in connection with employment

• some properties specifically for physically or mentally disabled people

• some properties specifically for older people

• most properties held by the landlord on a tenancy from the Crown

• where the tenant is an undischarged bankrupt, has a bankruptcy hearing pending or has an outstanding arrangement with creditors

• where the tenancy ceases to be secure

• where the property is a house, if the authority does not own the freehold of the house, the tenant will have a right to buy a leasehold interest only if the landlord is able to grant a lease of over 21 years

• where the property is a flat, if the authority does not own the freehold of the block, the tenant has the right to buy the leasehold only if the landlord is able to grant a lease of over 50 years

• some properties that are due to be demolished within 24 months[20]

In one case where a secure tenant contended that demolition of his flat amounted to a violation of his rights under Article 1 of Protocol 1 of the European Convention on Human Rights as it interfered with his right to exercise the right to buy the flat, the High Court held that the statutory right to exercise the right to buy did not constitute ‘possession’ for the purposes of the Protocol, and that any such interference would anyway be proportionate and justified by the need to facilitate redevelopment.[21]

There are some circumstances where the right to buy might have initially been available, but is then lost or suspended owing to a change in circumstances.

A local authority can initially accept that the tenant has the right to buy, but can then refuse to complete the sale if any of the circumstances below apply:

• if the tenancy ceases to be secure before completion (eg if the tenant moves out)[22]

• where the council has obtained a court order, which obliges the tenant to give up possession.[23] This includes postponed and suspended possession orders[24]

• where the council has obtained a 'suspension order' under section 121A of the Housing Act suspending the right to buy because of anti-social behaviour [25]

• where the council has applied to the court for:[26]

  • a demotion order

  • a possession order under ground 2 or 2ZA, or section 84A of the Housing Act (antisocial behaviour grounds)

  • a suspension order (under section 121A of the Housing Act)

• in the case of certain properties that are due to be demolished within 24 months, the right to buy application will be suspended[27]

If the council is seeking a possession order while the tenant is seeking an injunction to enforce the right to buy, then it is for the court to decide when and in what order it will deal with the cases.[28] The court should consider the sequence of events and the seriousness of the allegations against the tenant when deciding how to exercise its discretion.[29] For example, in one case[30] where a tenant had succeeded to a tenancy and applied for the right to buy, and the local authority subsequently commenced possession proceedings on the grounds of under-occupation, the court held that the right to buy application should be allowed to proceed. In another case, the court granted an injunction compelling the local authority to complete the purchase even though it was seeking possession on the basis of anti-social behaviour/nuisance.[31]

The Court of Appeal held that it is wrong to assume that alternative accommodation is unsuitable on the grounds that the effect of a possession order is to deprive the tenant of their right to buy. It is important that in these cases the court has regard to the housing stock of the local authority and assess whether possession is reasonable or not. In that case, the Court of Appeal held that where a property had been possessed on the ground of under-occupation, the right to buy would not be extinguished in respect of the next property a tenant occupied as a secure tenant.[32]

Where possession is sought under ground 16 (or 15A) for under-occupation and the tenant has applied to exercise the right to buy, both claims should be heard together and judged evenly on their merits.[33]

There is a qualifying period before the right to buy can be claimed. This requires that the applicant has occupied a 'public sector' tenancy for:[34]

• at least three years, if their first public sector tenancy began on or after 18 January 2005 (prior to 26 May 2015 the requirement was at least five years' occupation), or

• at least two years, if their first public sector tenancy began before 18 January 2005

The minimum period of occupation does not have to be continuous or in the same property and occupation may not always need to be by the tenant.

Any of the following periods can be counted:[35]

• periods before application for the right to buy where the applicant is a joint or sole public sector tenant, ie any time spent by the tenant as a public sector tenant. This can include any time spent as an introductory tenant, but not time spent as a demoted tenant

• periods before application for the right to buy where the applicant's spouse is a joint or sole public sector tenant and the applicant occupies the property as their only or principal home, the period where the spouse is a public sector tenant even if the spouse is not living there but as long as the applicant is

• periods before the application where the applicant's spouse (who the applicant is living with at the time of the application) occupied a property as their only or principal home and was the public sector tenant (joint or sole)

• periods before the application where the applicant's spouse (who the applicant is living with at the time of the application) occupied a property as their only or principal home and their spouse at that time (a former spouse) was the public sector tenant

• periods of occupation with a preserved right to buy

• periods occupying forces accommodation by the applicant and their (late or current) spouse

Succession and the qualifying period

Where the applicant's spouse has died and the applicant was living with them at the time of death, the following periods can be counted:

• periods where the spouse was the sole or joint tenant

• periods where the deceased spouse's spouse (a former spouse) was the public sector tenant and the deceased spouse was living in the property as their only or principal home.

Where the tenant is a successor to their parents' tenancy, they can count the time as tenant after the succession.[36] Also, time before the succession can be included where they reached the age of 16 and lived in the property as their only or principal home. If there was a gap of more than two years between periods of occupation, then only those periods since the gap count.

A public sector tenancy is defined[37] as a tenancy or licence with certain public landlords, as long as the tenant (or tenants) was an individual and the tenant or at least one of the joint tenants occupied the property as an only or principal home.

The list of public landlords that are included for the purposes of the residence requirements is broader than those landlords whose tenancies are subject to the right to buy and can be added to by statutory instrument. The main public landlords in England are:

• a local authority

• a new town corporation

• a housing action trust

• urban development corporations

• private registered providers of social housings (excluding most co-operative housing associations)

• the Homes and Communities Agency

A long list of landlords has been added by statutory instrument.[38] These include a variety of public bodies such as government departments, parish councils and the post office. Temporary licences given to squatters are not included.

Section 157 of the Housing Act 1985 allows the landlord to impose restrictions on future disposals of properties located in:

• National Parks

• areas of outstanding natural beauty

• designated rural areas

Rural areas are designated by the Secretary of State.[39]

In one case, the Ombudsman has found that the local authority's failure to provide full information about these restrictions to prospective buyers constituted maladministration leading to injustice. [40]

A fraudulent claim for the right to buy is a criminal offence under the Fraud Act 2006.

From 6 April 2014 in England, and 28 March 2014 in Wales, local authorities can compel listed organisations to provide them with information where it is reasonably required for the purpose of preventing, detecting or securing evidence for the conviction of an offence of making a fraudulent claim.[41]

The listed organisations are:

• banks

• building societies

• other providers of credit

• telecommunications providers

• utilities companies

The government Right to Buy guide includes information about the application process and discounts.

General advice on the right to buy scheme and contact details for Right to Buy Agent service is available on Gov.uk.

Own your home has further advice for tenants interested in the right to buy scheme.