Introduction

This advice guide is not meant to describe or give a full interpretation of the law; only the courts can do that. Nor does it cover every case. If you are in any doubt about your rights and duties, then seek specific advice.

Since 1980 council tenants have been allowed to buy their home (Right to Buy), whether it is a flat or a house, at a lower price than the market value. The amount of the discount available depends on how long you have been a secure tenant (if you’ve rented a council property for 12 months or more you’re likely to be a secure tenant). The property must be your only or principal home and be self-contained.

The Right to Buy may be exercised jointly with certain family members who have lived with you for the previous 12 months, or together with someone who is a joint tenant.

It is not possible to exercise Right to Buy if the court has made a possession order, you are an undischarged bankrupt, have a bankruptcy petition pending against you or have made an arrangement with creditors, and there is still money outstanding.

The council can also turn down your application to buy on the grounds that the home is particularly suitable for occupation by elderly people. Should you dispute this you have 56 days from the date the council refuses to sell to ask the Residential Property Tribunal to decide if the landlord’s decision is correct.

Should the council intend to demolish your home, an ‘initial demolition notice’ may have been served on you. This is valid for up to five years and suspends the council’s obligation to complete a Right to Buy sale.

Once you make the application any improvements or repairs that are due to be carried out will be cancelled except where the work is required by law to keep the property weather-tight. The reason for this is that the valuation is based on the date the application was made and any improvements or repairs after that date would affect the valuation.

The property bought under the Right to Buy scheme can be sold at any time. However, should you resell within the discount repayment period the whole or part of the discount may have to be repaid.

For houses: if you have been a council tenant for between three and five years you will receive a 35% discount. If you have been a council tenant for longer than five years the discount increases by 1% for every extra year up to a maximum of 70%.

For flats: if you have been a council tenant for between three and five years you will receive a 50% discount. If you have been a council tenant for longer than five years the discount increases by 2% for every extra year up to a maximum of 70%.

In April 2015, the maximum discount is £77,900 in England with the exception of London boroughs where it is £103,900. The maximum discount will go up each year in April in line with the consumer price index.

If you bought under the Right to Buy scheme on or after 18th January 2005 and wish to sell your property within 10 years of buying it, you must first offer it to your old landlord, e.g. the council, or another social landlord in the area.

Your home should be offered at the full sale price, which must be agreed between you and the landlord. If you can’t agree on the price for your home, a district valuer will say how much your home is worth and set the price. You won’t have to pay for their valuation.

If the landlord doesn’t agree to buy your home within 8 weeks, you can sell your home to anyone on the open market.

The procedure for exercising Right to Buy is fairly straightforward. Obtain a Right to Buy claim form (Form RTB1) from the council, complete it fully and send it to the council. Within four weeks from receiving it the council must send you a notice (Form RTB2) stating whether or not you are eligible for the Right to Buy. An explanation should be given if the application is declined. If you dispute the explanation you should take legal advice about what to do next.

If the council agree to sell to you, within 12 weeks after you receive the RTB2 they should send you a separate offer notice called a Section 125 notice. This is a crucial document which you should read carefully and keep safely. It will describe the following:

• the property you have the right to buy
• the price
• the market value and discount awarded
• estimates of the service charges, repair or improvement costs to pay during the first 5 years after purchase
• any structural defects of which the landlord has knowledge
• the terms of the lease.

You should also receive an Energy Performance Certificate with the Section 125 notice. You are entitled to challenge the price if you consider the market value shown in the Section 125 notice is too high. If you wish to do this you must inform the council not later than three months after receiving the Section 125 notice, and request that the district valuer make a determination, which will be final.

Otherwise, you have 12 weeks from receiving the Section 125 notice to tell the council if you want to go ahead and buy and serve a Notice of Intention. If the property has been valued by the district valuer you have 12 weeks from their decision to let the council know if you will proceed with the purchase.

Should you fail to let the council know within the 12-week limit, you will be given 28 days’ notice to decide, failing which it will be assumed that you do not want to proceed.

If you return the Notice of Intention stating you wish to proceed with the Right to Buy but do nothing further for three months from the date of the Section 125 notice, the council can send you two notices requiring you to complete the sale. Should you not answer within 56 days of the second such notice the application will be deemed withdrawn.

Once you have decided to buy, the council will prepare the leasehold documents including the plan. The papers will be sent to your conveyancing solicitor.