Right to Buy policy

1. Overview of policy

This document outlines the Council’s Right to Buy Policy which includes Administration fees and charges, case, and day to day management. It sets out the approach to delivering this service and the collection of any associated charges.

The policy relates to all prospective tenants exercising their Right to Buy.

The policy described here takes into account legislation and Reading Borough Council policies.

1.1 Policy statement

The Homeownership team will work closely with it’s tenants to ensure that the Right to Buy process is clearly explained, equitable, and presented in a format that takes account of individual tenants needs and requirements.

They will also work closely with the Council’s internal departments to prevent fraudulent Right to Buy’s.

2. Policy

2.1 Aims

• To ensure tenants have the information and support they need to guide them through the Right to Buy process.
• To provide tenants with information about:
  •  Who is eligible
  • Costs of buying
  • Discount
  • Becoming a homeowner (Leasehold or freehold) and the associated costs
  • Becoming a homeowner (Leasehold or freehold) and the associated responsibilities

2.2 Objectives

This document relates to the policy and procedural arrangements for selling properties under the Right to Buy scheme in compliance with the Housing Act 1985.  The document will be referred to as “the policy” and describes how the Council will enact the Right to Buy in all cases; however, the Council reserves the right to deviate from this policy in exceptional circumstances.

The policy operates in conjunction with the authority’s existing Anti- Money Laundering Policy, Housing Management Policy, CIT policy, Allocation policy and Garage Policy and will be reviewed in parallel with any future changes to these policies.

This document makes reference to the legal requirements and policies that must be adhered to for the purposes of making a Private Sector Offer.

This document was drafted with regard to the following legislation including (but not limited to) the following:

• Housing Act 1985, Section 156 (As amended by Section 120 of Leasehold Reform, Housing and Urban Development Act 1993).
• Housing Act 1985 Section 122
• Housing and Regeneration Act 2008
• Commonhold and Leasehold Reform Act 2002
• Housing and Planning Act 1986

This policy has regard to the Department of Communities and local Government  (DCLG) guidance.

Reading Borough Council will consider

The Tenant:

• 2.2.1 Reading Borough Council is a responsible landlord and we are committed to ensuring that our customers are aware of any risk associated with taking out additional borrowing.
• 2.2.2 Reading Borough Council is a responsible landlord and we are committed to ensuring that our existing customers do not in any way subsidise former tenants.

The Property:

• Reading Borough Council will protects its interest in properties sold under the Right to Buy
• 2.2.3 Reading Borough Council is a responsible landlord and we are committed to ensuring that our existing customers do not in any way subsidise former tenants.

2.3 Requirements

We will abide by any statutory requirements in delivering this service to our tenants.

Some properties do not qualify for the Right to Buy irrespective of the type of tenure.

3. Related policies

Leasehold Management Policy

This policy covers those tenants who have brought their flats and who subsequently become leaseholders.

It includes:

• Service Charges
• Section 20

3.1 Communication of the policy

A copy of the policy will be available to applicants via the Council’s website.

4. Procedure

RBC will follow the current procedure and deadlines set as per rules of the Governments Right to Buy scheme.

The process currently set out is listed below:

Stage	Reason	Timescale
Step 1	Applying to buy
Step 2	RTB2 (admitting or denying the Right to Buy)	Within 4 weeks from submission of application
Step 3	Section 125 Notice	Within 8 weeks for a house, 12 weeks for a flat after admittance
Step 4	Accepting offer/requesting determination/withdrawing	No later than 12 weeks after Section 125 Notice
Step 4	Default Notice	28 days after expiry of offer
Step 5a	Termination of Right to Buy	28 days after Default Notice
Step 5b	Purchase of property	Any time after offer accepted

Tenants do not have the Right to Buy if:

• The property is particularly suitable for occupation by elderly persons, taking into account its location, size, design, heating  system and other features
• Was let to them for occupation by a person aged 60 or over, whether they were the tenant or not: and
• Was first let (to them or someone else) before 1 January 1990.
• Sheltered Housing for the elderly, the physically disabled, the mentally ill or the mentally disabled
• Houses and flats on land which has been bought for development
• Tenancies of employees who have to live in homes owned by their employers so they can be near their work
• Tenancies of employees whose home is inside the boundaries of a school, a service home, or another type of operational building or a cemetery

5. Who has the Right to Buy

For any current tenant(s) who have been a secure tenant of a Right to Buy landlord for 3 years.

Different addresses can be included providing the tenancies were secure qualifying tenancies but do not necessarily need to be consecutive.

Confirmation of the secure tenancy(ies) will need to be provided by the tenant at application stage.

5.1 Verification

The documents requested as part of the RTB application including Identification, residency and financial, will be verified to support the RTB application and for the prevention of Fraud and Money Laundering.

5.2 Over 60s

For all RTB applications received for tenants over the age of 60, a 1-1 interview will take place to ensure they are aware of the obligations of purchasing.

5.3 Joint tenant not wishing to be part of RTB

Any joint tenant not wishing to purchase the property and be part of the RTB will have to sign documentation along with the disclosure section of the RTB1 application.

Their tenancy will automatically come to an end when the property is purchased by the remaining tenant.

The tenant not wishing to purchase should also sign the RBC document confirming they understand what giving up their RTB will mean.

These persons will be deemed intentionally homeless if they were to seek accommodation through Homechoice in the future.

6. Amendment to RTB application

Any request by an applicant or applicants to add, remove or amend existing applicants details will only be done prior to RTB2 stage.

7. Additional land

Any land that the applicant may have acquired or lost, either inside or outside of the boundaries, will need to reinstated back to the original boundary lines before purchase.

For any other land which is not within their boundary lines which they may currently maintain and wish to include in the purchase will need to be specified in the additional information sheet with the RTB1.

For shared access points, Right of Way will be given to enable both parties to access the land within their boundaries.

Application requests to purchase land within a communal area as part of the sale, will be looked at on an individual basis.

8. Garages

If an applicant wishes to purchase a garage that they currently rent as part of their application, this should be specified in the additional information sheet with the RTB1. Decisions regarding garage purchases will be made in conjunction with the Garage Policy.

9. Section 125 for leaseholders

These will be provided to the tenant as part of the offer to give a maximum cost of works/services that will take place over the next 5 years with effect from 1 April following purchase.

10. Local agreements

Local area agreements are in place with internal departments to ensure service requirements/delivery is met.

11. Debt

In order for a Right to buy application to be made, any Housing or Housing Benefit debt owed by any applicant must be cleared prior to submitting the RTB1.

If any debt is incurred by the applicants during the RTB process this will need to be cleared in full on or before completion.

12. Structural surveys

12.1 Reading Borough Council survey

Reading Borough Council will carry out a survey of the property and the report will contain any structural defects that are identified.

12.2 Independent building survey

Applicants are advised to have their own independent Building/Home buyers Survey’s carried out in addition to RBC’s survey.

13. Discount received

The scheme gives applicants a discount on the market value of their home. Legislation will confirm what the maximum discount amount and % currently is.

14.0 Future sales

14.1 Right of first refusal

For any applicants that purchase their home under the Right to Buy scheme and wish to sell or dispose of it within 10 years, they will be required to offer it back to RBC to purchase at full market value. Each case will be looked at on an individual basis.

14.2 Repayment of discount

Former social tenants who wish to sell or transfer the home they purchased under the Right to Buy scheme will have to request this in writing and will have to repay upon demand by us, all or part of the discount they received as part of the sale. Legislation specifies how much they will need to repay.

We will respond to the request within 10 working days.

14.3 Exemption of repayment of discount

14.4 Sales or transfers

Certain sale or transfers may be exempt from the requirement to repay discount e.g. transfers between certain family members unless the family member that the property is being transferred or sold to already own a property within the UK, and/or, have previously had a property originally transferred under the Right to Buy scheme transferred to them by a family member where the discount was not repaid.

14.5 Hardship

In exceptional circumstances we may agree to the owner repaying part or none of the discount where they would experience extreme financial hardship by having to repay the discount due to the value of the property reducing since purchase.

15. Deed of postponement

If within the five years of purchase the owner makes a request to their mortgage lender to release equity from the property, this must be for approved purposes only as specified in Section 156 of the Housing Act 1985.

This request can be made by the owner or the registered lender, together with a current valuation of the property carried out by a certified surveyor.

The request must include a copy of the mortgage offer for the additional borrowing, the amount of the existing mortgage, what the additional borrowing is for and for how much, plus 3 separate quotes from registered businesses.

Reading Borough Council will refuse requests for additional borrowing for the following reasons:

• For conservatories, extensions, garden landscaping, kitchen appliances, any other white goods or for cosmetic purposes.
• Where there is not sufficient information to make a decision
• Where the quotes provided for works are not from registered businesses
• Where the additional borrowing will compromise our discount security
• Where the Property Valuation is older than 3 months

16. Review of policy

This policy will be reviewed at least every two years or sooner if there are changes to Law, Legislation or corporate requirements.