OPINION

Christopher and Jacqueline Simpson (Applicants) v Hillcrest Housing Association Limited (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 applicants have a right to purchase. The respondents resist the application. They maintain that they are a registered social landlord with charitable status since 1 January 1992 and are exempt from the right to purchase provisions. Their solicitors further maintain that the application is incompetent since there was no application to purchase in terms of Section 63 of the 1987 Act, which application is required to trigger the statutory sale process. Since the date of the application to the Tribunal, the right to purchase has been repealed with effect from 1 August 2016.

Legislation

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…

“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;

(b) a statement of any period of occupancy of a house on which the tenant intends to rely for the purposes of section 61 and 62; and

(c) the name of any joint purchaser within the meaning of section 61(6)

(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; …

(2) Where a landlord on which an application to purchase has been served, after reasonable enquiry (which shall include reasonable opportunity for the tenant to amend his application), is of the opinion that information contained in the application is incorrect in a material respect it shall issue a notice of refusal within 2 months of the application to purchase.

(3) A notice of refusal shall specify the grounds on which the landlord disputes the tenant's right to purchase or, as the case may be, the accuracy of the information.

(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.

… ”

The Right to Purchase (Application Form) (Scotland) Order 2011/97 (“the 2011 Order”) prescribes the form to be used in terms of section 63(1).

Housing Scotland Act 2014 (“the 2014 Act”)

Section 1(1) of the 2014 Act repealed the right to purchase provisions, namely section 61 et seq of the 1987 Act. In terms of the Housing Scotland Act 2014 (Commencement No 1. Transitional and Saving Provisions) Order 2014/264 that repeal took effect from 1 August 2016. In terms of Art 4, applications to purchase under section 63(1) before 1 August 2016 were saved.

Authority referred to

East of Scotland Water Authority v Livingstone 1999 SC 65.

Procedure

[2] The application to the Tribunal is made under Section 68(4) of the 1987 Act. The applicants were unrepresented. The respondents were initially unrepresented but subsequently we received representations on their behalf from Ms Shirley Evans of Anderson Strathern LLP, solicitors. Parties agreed to the case being determined by written submissions.

Background facts and circumstances

[3] A Scottish secure tenancy agreement in respect of the subjects 143 Charles Avenue, Arbroath was produced. It is between the respondents and the second applicant, who signed it “Mrs J Livesely”. The tenancy commenced on 12 December 2003.

[4] The second applicant approached the respondents with a view to purchasing the subjects. This initially appears to have been in October 2015. A representative of the respondents indicated that the applicants did not have the right to buy. A further enquiry was made, the details of which were not specified, but which we infer took place in or about July 2016. In response the respondents sent a letter of 18 July 2016 explaining why they considered the second applicant did not have the right to buy. In summary, the letter stated that the “modernised” right to buy did not apply to housing associations which became registered charities before the coming into effect of the Housing (Scotland) Act 2001, and that the respondents were registered as a charity in 1992. Accordingly the respondents maintained that their properties were exempt. The letter also provided links to two websites giving advice on the right to purchase, one by the Scottish Ministers and the other by a well-known charity.

[5] The foregoing letter prompted the application to the Tribunal, received 25 July 2016. The second applicant did not accept the respondents’ explanation and pointed to the fact that a neighbour had been able to purchase a property from the respondents who had not occupied the property for as long as her. In response, the respondents stated that they were exempt from the right to purchase where the tenancy commenced after the coming into effect of the Housing (Scotland) Act 2001, which was prior to the tenancy in question which commenced on 12 December 2003. They maintained that the neighbouring property had been acquired as part of a stock transfer from Angus Council in 1997, and one of the conditions of the transfer was that the transferring tenants received a “preserved” right to buy on certain conditions.

[6] As we have indicated, the respondents’ solicitors have added in a letter to us dated 5 October 2016 that there was no formal application by the applicants to purchase the property under section 63 of the 1987 Act. Accordingly, in terms of the statutory procedures, the stage had not been reached whereby they could apply to the Tribunal under section 68(4). We infer from the correspondence to us that the applicants accept there was no formal application to purchase, and none was produced to us. Instead the applicants sent a letter dated 19 October 2016 to a manager of the respondents stating:

“We formally wish to apply to purchase 143 Charles Avenue. We are also requesting that our formal application be backdated to 18 July 2016 as we have had two telephone conversations with yourself regarding the sale/purchase of our home and at no time did you say we would have to formally apply, instead telling us we did not have the right to buy and that there was nothing we could do about this. This could be perceived as being obstructive and detrimental in our quest to buy our home …”

Discussion by Tribunal

[7] We agree with the respondents that the statutory procedures to obtain a finding of a right to purchase have not been engaged in this case. It is clear from section 63, as quoted above, that the application to purchase requires to be made in a statutory form and to contain a certain amount of prescribed detail. When that formal application has been made to the landlord, the landlord has a certain period in which to serve a notice of refusal should it dispute the right to purchase, and where the information contained in the application is disputed there is a further time limit for the notice of refusal. Once there is a notice of refusal by the landlord, the Tribunal has jurisdiction to determine, on a timeous application by the tenant, whether there is a right to purchase under section 68(4). But the failure by the landlord to serve a notice of refusal within the prescribed timescale can have a draconian effect even where it might seek to argue there was no secure tenancy in existence, as was the case in Livingstone. Once the application is not disputed within the timescales, in terms of section 63(2), the landlord “shall” serve an offer to sell. So the landlord needs to know that the statutory process is being engaged by an application in the prescribed form. Parliament has intended the detailed procedures to be important.

[8] In these circumstances we are satisfied that the inquiry made to the respondents sometime prior to 18 July 2016 was not an application to purchase in statutory form. Indeed neither does the applicants’ letter dated 19 October 2016 seeking to describe itself as a formal document meet the statutory criteria as a formal application to purchase. It is not in statutory form and does not contain the information prescribed by section 63(1)(b) or (c). The application form prescribed by the 2011 Order runs to several pages and contains, amongst other things, a declaration of accuracy of certain particulars. The applicants’ letter does not do this.

[9] Moreover there is no provision which would permit an application to be backdated so as to trigger the statutory machinery from an earlier date, far less to date prior to 1 August 2016 when the right to purchase was repealed. The 2014 Act and subordinate legislation only save applications to purchase under section 63 which were made prior to 1 August 2016.

[10] It follows from the above that as there was no statutory application to purchase, the respondents were not obliged to serve a notice of refusal as could trigger an application to the Tribunal under section 68(4). The respondents’ letter of 25 July 2016 although making it clear there was no right to buy, did not need to be a formal notice of refusal and, quite sensibly, was not so termed. In these circumstances section 68(4) has not been engaged and we are accordingly unable to proceed to make a finding as to whether or not there is a right to purchase the house.

[11] That is sufficient to dispose of the application. Had it been necessary to determine whether the respondents were exempt from the right to purchase on account of their charitable status and fact they are a housing association, it would have been necessary for us to obtain a more detailed analysis of the facts and legislation than was provided to us. However, this matter does not arise.

Decision

[12] We dismiss the application on the basis that the respondents did not receive a statutory application to purchase from the applicants.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 22 November 2016

W Douglas Ballantyne – Deputy Clerk to the Tribunal