Scottish Government

PART 3: THE TRANSITION TO THE MODERNISED RIGHT TO BUY

Introduction

106. This part of the guidance explains how the modernised RTB will be introduced after the relevant sections of the 2001 Act have been commenced. In particular, it explains the details of the protection given to tenants with an existing RTB entitlement when their tenancy is converted to a Scottish secure tenancy as provided for by the Introduction of the Scottish Secure Tenancy Order 2002.

Timetable for the introduction of the modernised Right to Buy

107. The modernised RTB will be introduced at the same time as other aspects of the Scottish secure tenancy. The current intention is that the Scottish secure tenancy will be introduced throughout Scotland from 30 September 2002.

108. Some aspects of the modernised RTB will apply to all Scottish secure tenants following the introduction of the Scottish secure tenancy. These are:

• the replacement of the existing exemption for tenants in sheltered housing schemes by the exemption for group housing schemes designed for persons with special needs ( see part 2, paragraph 20 );
• the ability of landlords to refuse the RTB where there are arrears of rent or council tax or where the tenant is subject to recovery of possession on conduct grounds ( see part 2, paragraphs 77 to 85 );
• the new power for the Scottish Ministers to refuse to sell houses liable for demolition ( see part 2, paragraphs 86 to 92 );
• the abolition of the "rent to mortgage" scheme ( see part 2, paragraph 103 );
• the repeal of the obligation on landlords to act as lender of last resort ( see part 2, paragraph 102 );
• the extension of the power of the Scottish Ministers to authorise refusal to sell houses provided for persons of pensionable age ( see part 2, paragraph 22 ).

The 10-year limitation for Registered Social Landlords

109. The 10-year limitation for tenants of certain properties owned by registered social landlords will also commence immediately following the introduction of the Scottish secure tenancy. (The scope of this limitation and the way it is intended to work is explained in full in part 2, paragraphs 43 to 48 .)

The pressured areas limitation

110. It will be possible for local authorities to submit proposals for pressured areas to the Scottish Ministers for their consideration immediately following the implementation of the Scottish secure tenancy. The procedures for submitting proposals for pressured areas and the effect of the designation, i.e. the tenants whose RTB will be suspended if the designation is made, is explained in part 2, paragraphs 49 to 67 .

Right to buy - terms and conditions

111. The phrase "terms and conditions" is used here to refer to:

• the discount to which the tenant is entitled; and
• the initial qualifying period before the tenant becomes eligible to exercise the RTB.

112. An effect of the Introduction of the Scottish Secure Tenancy Order 2002 will be to ensure that tenants with a right to buy their house before the introduction of the Scottish secure tenancy will continue, after their tenancy is converted to a Scottish secure tenancy, to be able to exercise that right on the pre-2001 Act terms and conditions, rather than the terms and conditions which apply to the "modernised" RTB. These will be secure tenants of local authorities, RSLs and water authorities and some assured tenants of RSLs who have a preserved RTB. These tenants will, therefore, continue to be able to exercise the RTB after a 2-year qualifying period and be eligible, depending on the length of residence, to a maximum discount of up to 60% in the case of houses and 70% in the case of flats. If the tenant has not completed the initial qualifying period at the point at which the Scottish secure tenancy is introduced, he or she will still be able to exercise the RTB on pre-2001 Act terms and conditions, rather than those associated with the modernised RTB.

113. Subject to the exceptions described in paragraphs 114 and 116 below, this protection will only be available for tenants in tenancies which are converted from secure or assured tenancies to Scottish secure tenancies. In general, tenants of new tenancies created after the introduction of the Scottish secure tenancy, including new tenancies created as a result of transfers or exchanges by existing tenants, will only be able to exercise the RTB on "modernised" terms and conditions (i.e. they will be subject to a 5-year qualifying period and be eligible for a maximum discount of 35% subject to a cap of £15,000). Tenants who would otherwise continue to be eligible for the RTB on pre-2001 Act terms and conditions who are contemplating a transfer or exchange should be advised of the possible implications of this, so that they can consider their position.

114. The Introduction of the Scottish Secure Tenancy Order 2002 does, however, provide for certain exemptions to this general rule to take account of the fact that, in some cases, tenants are required by their landlord to move to a new tenancy. Tenants will be able to retain the RTB on pre-2001 Act terms and conditions following a transfer to a new tenancy in two sets of circumstances:

• where the landlord has sought to recover possession of the tenancy under section 14 of the 2001 Act under the following "management grounds" (as set out in schedule 2) which requires the landlord to provide suitable alternative accommodation:
  • the house is overcrowded within the meaning of section 135 of the 1987 Act (paragraph 9 of schedule 2);
  • it is intended to demolish or carry out substantial work on the house (paragraph 10 of schedule 2);
  • the house has been designed or adapted for persons with special needs and there is no longer any such person in the house and the landlord requires it for another household containing a person with relevant needs (paragraph 11 of schedule 2);
  • the house forms part of a group of houses designed or provided with special facilities or located near special facilities for persons with special needs and, as above, there is no longer a person with such needs in the house and it is required for another person (paragraph 12 of schedule 2);
  • the landlord leases the house and the lease has terminated or is soon to terminate (paragraph 13 of schedule 2);
  • the landlord is an Islands Council, the house is held by the Council for educational staff and is required for this purpose (paragraph 14 of schedule 2);
  • the landlord wishes to transfer the tenancy to the tenant's spouse, former spouse or co-habitee where the tenant no longer wishes to live in the house (paragraph 15 of schedule 2);
• where the landlord has made a decision to demolish the house even if formal recovery proceedings have not been instigated and the tenant has agreed to move to other accommodation.

115. Where a tenant moves out of the house for a temporary period while the house is being renovated and subsequently returns, the tenancy is not terminated and any entitlement to the RTB on pre-2001 Act terms and conditions will continue as a matter of course.

116. The Introduction of the Scottish Secure Tenancy Order 2002 also provides that specified "qualifying persons" who succeed to existing tenancies under the provisions of section 22 and schedule 3 of the 2001 Act will have a RTB entitlement based on the "modernised" terms and conditions, providing the house in question is not subject to any of the specified exemptions. As a result, with some limited exceptions, persons succeeding to tenancies where the tenant that died had a protected entitlement to the RTB on the pre-2001 Act terms and conditions, will only be eligible for the RTB on "modernised" terms and conditions. The exceptions to this where the qualifying persons under the rules of succession will also inherit the entitlement to the RTB on pre-2001 Act terms and conditions are:

• the qualifying person is a tenant's spouse who occupied the house at the time of the tenant's death as their only or principal home;
• the qualifying person is a co-habitee or same sex partner of the tenant and had been living in the house as their only or principal home for at least six months before the tenant's death;
• the qualifying person is a joint tenant.

117. The Introduction of the Scottish Secure Tenancy Order also provides that any RTB entitlement of persons who are assigned a tenancy under the provisions of section 32 and schedule 5 of the 2001 Act is limited to the "modernised" terms and conditions. Again this will apply even if the tenant who assigns the tenancy has a RTB entitlement based on the pre-2001 Act terms and conditions.

The exemption for Registered Social Landlords with charitable status

118. The exemption for registered social landlords and others included by order (see paragraph 18 above) who obtained charitable status before the 2001 Act received Royal Assent (18 July 2001) will apply at the introduction of the Scottish secure tenancy to:

• all tenants who before that date did not have the RTB either because they had an assured tenancy which did not give an entitlement to the RTB or they were also exempt from the RTB on account of the previous exemption for housing associations with charitable status as set out in section 61(4)(e) of the 1987 Act;
• new tenants whose tenancy started after the introduction of the Scottish secure tenancy.

119. The Introduction of the Scottish Secure Tenancy Order 2002 protects the RTB for tenants of RSLs with charitable status obtained before Royal Assent, where the tenant had an entitlement to the RTB before the introduction of the Scottish secure tenancy and the modernised RTB. This will include:

• tenants of housing associations with a charitable exemption under the 1987 Act who had a preserved RTB following a stock transfer from Scottish Homes or a local authority to the RSL in question;
• tenants of RSLs with secure tenancies or tenants with an assured tenancy with a preserved RTB who obtained an exemption for the first time as a result of the 2001 Act.

120. Where a tenant of a RSL continues to have an entitlement to the RTB as a result of this protection, this will be on pre-2001 Act terms and conditions.

121. Protection for tenants in houses owned by RSLs with a charitable status exemption applies only for as long as the tenancy is in existence. Tenants of new tenancies, including new tenancies created as a result of existing tenants moving to a different house, will be subject to the exemption and will not, therefore, have a statutory RTB. The same exceptions to this will apply in the case as described in paragraphs 114 and 116 above, i.e.:

• tenants who are compulsorily transferred or who are required to transfer to a different house because their house is to be demolished, will continue to retain their RTB entitlement (although the discount they enjoy may change as a result of the cost floor);
• persons succeeding to tenancies will lose any protected entitlement enjoyed by the previous tenant (with the exception of spouses, cohabitees, same sex partners and joint tenants);
• persons who are assigned a tenancy will also lose any protected entitlement enjoyed by the previous tenant.

122. RSLs with charitable status will, therefore, need to take account of these provisions if they wish to acquire local authority or Scottish Homes housing through a stock transfer. Local authority or Scottish Homes tenants with tenancies which started before the introduction of the Scottish secure tenancy will continue to enjoy the same right to buy entitlement as before. If, following the introduction of the Scottish secure tenancy, they move to a new tenancy within the stock owned by the charitable RSL, then they will lose their right to buy entitlement unless they are covered by one of the exceptions described above, i.e. they are compulsorily transferred for one reason or another. Similarly, tenants whose tenancies started after the introduction of the Scottish secure tenancy, will lose their "modernised" right to buy entitlement when the house transfers to the charitable RSL. It is, however, possible for the RSL to consider whether it wishes and is able to offer a contractual RTB in these circumstances ( see paragraph 4 ).