OPINION

Marion Thomson (Applicant) v South Ayrshire Council (Respondents)

Introduction

[1] This is an application for a finding in terms of Section 68(4) of the Housing (Scotland) Act 1987 (“the 1987 Act”), as amended, that the applicant, who is a tenant of the respondents, has a right to purchase. The respondents resist the application and rely on the designation of the area in which the applicant’s house is situated as a “pressured area” under section 61B, a provision added by the Housing (Scotland) Act 2001. Subsequent to the raising of this application, the relevant parts of the 1987 Act providing for the right to purchase have been repealed by the Housing (Scotland) Act 2014 with effect from 1 August 2016.

Legislation

[2] The 1987 Act, prior to the above repeal, provided as follows:

“61.— Secure tenant's right to purchase

(1) Notwithstanding anything contained in any agreement, a tenant of a house to which this section applies (or such one or more of joint tenants as may be agreed between them) shall, subject to this Part, have the right to purchase the house at a price fixed under section 62…

61B Limitation on right to purchase: pressured areas

(1) A local authority may designate any part of their area as a pressured area if they consider that—

(a) the needs of that part for housing accommodation in houses provided by the authority or by registered social landlords exceed substantially, or are likely to exceed substantially, the amount of such housing accommodation which is, or is likely to be, available in that part, and

(b) the exercise by tenants of houses in that part of the right under section 61(1) to purchase such houses is likely to increase the extent by which such needs exceed the amount of such housing accommodation.

(3) For so long as an area is designated as a pressured area, section 61(1) does not apply in relation to a house in the area—

(a) let under a tenancy created on or after the date specified in relation to the landlord in an order under section 11(1) of the Housing (Scotland) Act 2001 (asp 10), …

(9) A local authority may make a further designation under subsection (1) in relation to a part of their area despite a designation under that subsection being, or having been, in force in relation to that part.”

[3] Without quoting detailed secondary legislation, subsection (3)(a) has the effect of suspending the right to buy for Scottish secure tenancies created after 30 September 2002 where an area is designated as a pressured area. Tenancies created after this date are normally described as having the “modernised” right to buy. Section 61B as quoted above replaced an earlier version with effect from 30 June 2011. In essence the earlier version allowed Scottish Ministers (as opposed to the local authority) to make a designation for up to 5 years.

[4] The 1987 Act further provides:

“63.— Application to purchase and offer to sell

(1) A tenant who seeks to exercise a right to purchase a house under section 61 shall serve on the landlord a notice (referred to in this Part as an “application to purchase”) which shall be in such form as the Secretary of State shall by order made by statutory instrument prescribe, and shall contain—

(a) notice that the tenant seeks to exercise the right to purchase;

(2) Where an application to purchase is served on a landlord, and the landlord does not serve a notice of refusal under sections 68 to 70 it shall, within 2 months after service of the application to purchase, serve on the tenant a notice (referred to in this Part as an “offer to sell”)

68.— Refusal of applications

(1) Where a landlord on which an application to purchase has been served disputes the tenant's right to purchase a house under section 61, it shall by notice (referred to in this Part as a “notice of refusal”) served within one month after service of the application to purchase—

(a) refuse the application; …

(4) Where a landlord serves a notice of refusal on a tenant under this section, the tenant may within one month thereafter apply to the Lands Tribunal for a finding that he has a right to purchase the house under section 61 on such terms as it may determine.

71.— Reference to Lands Tribunal

(1) Where—

(a) a landlord who has been duly served with an application to purchase fails to issue timeously either an offer to sell… or a notice of refusal;

(c) the Lands Tribunal has made a finding under section 68(4) (refusal of right to purchase) or has made an order under subsection (2)(b) of this section and the landlord has not duly progressed the application to purchase in accordance with that finding or, as the case may be, order, within 2 months thereafter;

the tenant… may refer the matter to the Lands Tribunal by serving on the clerk to that body a copy of any notice served and of any finding or determination made under this Part, together with a statement of his grievance…”

(2) Where a matter has been referred to the Lands Tribunal under subsection (1), the Tribunal shall consider whether in its opinion—

(a) any of paragraphs (a) to (c) of that subsection apply, and if it so finds it may—

(i) give any consent, exercise any discretion, or do anything which the landlord may give, exercise or do under or for the purposes of sections 61 to 84 and

(ii) issue such notices and undertake such other steps as may be required to complete the procedure provided for in sections 63…”.

Authorities referred to

East of Scotland Water Authority v Livingstone 1999 SC 65
Maclennan v Dunedin Canmore Housing Association Ltd LTS/TR/2013/06, 4 February 2014
Warren v South Ayrshire Council LTS/TR/2008/11, 7 April 2009

Procedure

[3] The application to the Tribunal is made under section 68(4) of the 1987 Act. The originating application to purchase was submitted on 24 February 2016 although bears to have been received by the respondents on 1 March 2016. A notice of refusal was issued on 4 May 2016 by the respondents. A hearing on the application to the Tribunal was held on 31 October 2016. The applicant was unrepresented and gave evidence herself. The respondents were represented by Ms Christine McMenamin, Legal Services Coordinator for the respondents. She called Ms Karen Briggs, the Legal and Licensing Manager of the respondents to give evidence.

Background facts and circumstances

[4] There was no significant factual dispute. The applicant is the tenant of her house at 2 Robertson Crescent, Ayr. The respondents are her landlords. There was no dispute that she has a Scottish secure tenancy which commenced in 2008. As the tenancy commenced after 30 September 2002, we infer she had the “modernised” right to buy in terms of the 1987 Act, as amended by the 2001 Act.

[5] The applicant has previously had tenancies of other properties with the respondents and their statutory predecessors prior to 2008, going back to 1986.

[6] The applicant’s house is situated within the area of Craigie. Scottish Ministers designated Craigie as a pressured area under the unamended section 61B of the 1987 Act for a period of five years, from, we understood, 24 June 2011. The respondents themselves extended this period, under the amended section, from 24 June 2016 until 1 August 2016 at a council meeting held on 15 March 2016. This coincided with the ending of the right to buy for all council tenants in Scotland.

[7] The respondents initially appeared to accept that the applicant had the right to purchase. A valuer from the Valuation Office Agency attended her property, we understood in April 2016, for this purpose. However, the respondents subsequently refused the application on the basis that the property was situated in a pressured area. The respondents admitted in their answers that the notice of refusal was outwith the one month time limit specified in section 68(1) of the 1987 Act.

Applicant’s submission

[8] The applicant pointed out that other tenants had been given an offer to sell by the respondents despite living in a pressured area. She felt she was being discriminated against. She also complained that the notice of refusal had come late in that it was issued after the surveyor had attended to value the property.

Respondents’ submission

[9] The respondents submitted that the area in question was a pressured area and that accordingly the right to buy had been suspended. The possibility that other tenants had been given offers to sell despite living within a pressured area could be explained by the fact that they might have had the benefit of tenancies in existence prior to 30 September 2002 so that section 61B did not apply.

[10] Accordingly section 61 did not apply in this case. It therefore followed that the application was invalid. The council was therefore able to defend the application despite the late notice of refusal. The Tribunal should follow its previous decision in Maclennan v Dunedin Canmore Housing Association Limited which was in point. There the Tribunal had held that the suspension of the right to buy was fundamental and that the statutory machinery could not be applied so as to “create” a right which did not exist.

[11] We raised with parties a question whether Maclennan had been correctly decided in the light of the Inner House authority East of Scotland Water Authority v Livingstone. Livingstone, unlike the present case, involved an application under section 71. The majority held that a late notice of refusal meant the respondents were too late to argue that a tenancy was not a secure tenancy. The Tribunal in Maclennan distinguished Livingstone on the basis that the suspension of the right to purchase the house was fundamental to the statutory procedure. The applicant did not seek to argue that Maclennan was incorrectly decided or, at our suggestion, invite us to review the decision. The respondents submitted that Maclennan had been correctly decided.

Discussion by Tribunal

[12] We have accepted the evidence that the area in question was designated as a pressured area within the meaning of section 61B of the 1987 Act. We also accept that this designation was in existence at the time of the applicant’s application to purchase. It follows that the applicant’s right to purchase had been suspended since section 61 had been disapplied by section 61B(3)(a).

[13] We also accept the likelihood ventured by the respondents that any other tenants who had succeeded in purchasing their property within a pressured area were likely to have done so because their tenancy of the specific property would have commenced prior to 30 September 2002. Section 61B did not apply to such cases and so any such tenants continued to have the right to purchase. There was no question of the council unlawfully discriminating against the applicant. The council would have had no option but to accept applications to purchase from tenants where they had been in occupation of the same tenancy since before 30 September 2002.

[14] The fact that the applicant had previous tenancies with the respondents or their predecessors was not explored in argument. Nevertheless it can be dealt with shortly. We infer her previous tenancies would have been secure tenancies prior to 30 September 2002. But even if the transitional reliefs regarding the “preserved” right to buy applied, and we have no reason to think that they did since the applicant has been tenant of different property since that date, the reliefs do not apply to relieve the effect of a pressured area designation. This point involving the history of the amendment of the relevant transitional provisions was discussed by the Tribunal in Warren v South Ayrshire Council which made it clear that the transitional reliefs did not include relief from the effect of the “pressured area” designation.

[15] As we have mentioned above it was not argued that the respondents’ failure to serve a notice of refusal within one month of the application to purchase rendered the respondents under an obligation to serve an offer to sell under section 63(2). In these circumstances, albeit with some unease, we propose to follow the Tribunal’s decision in Maclennan. This decision is to the effect that where the right to purchase has been suspended, the application is invalid and, as it could not be engaged by the statutory machinery, leaves the respondents free to argue there is no right to purchase.

Decision

[16] We have decided to refuse the application since the applicant’s right to purchase had been suspended because her property fell within a pressured area. We therefore dismiss the application.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 9 November 2016

Neil M Tainsh – Clerk to the Tribunal