OPINION

Alan Maloney (Applicant) v The City of Edinburgh Council (Respondents)

[1] This is a referral under sec 71(1)(d) of the Housing (Scotland) Act 1987 (“the 1987 Act”) in which the applicant contends that he is entitled to buy his home at 26 (2F2) Stenhouse Avenue West, Edinburgh, from the respondents under the terms of what has become known as “the preserved right to buy” rather than the “modernised right to buy” which the respondents have offered him. The practical difference is the more generous discount on purchase price to which a tenant is entitled under the former. Parties have agreed that we can decide the case on their pleadings and written submissions.

The facts

[2] The applicant has been a secure tenant (in terms of the 1987 Act) of the respondents since 7 June 1993 when he entered into the tenancy of a house at 2/1 Medwin House South, Edinburgh.

[3] On or around 21 April 2005, somewhere in the vicinity of that address, he was the victim of a serious assault which resulted in severe brain injury and multiple, profound and long-lasting difficulties with his health. He was in hospital for six months and required surgery.

[4] As a result of this assault he was advised by police that it would not be safe for him to return to his former home because his assailants lived nearby. He asserts, although it is denied, that the respondents refused to allow him to return to the property although he wanted to do so. He says the respondents forced him to enter a new tenancy.

[5] Before any of this happened he had been thinking about buying his home under the right to buy provisions of the 1987 Act so he wanted to be sure that a move to another house would not affect the amount of his discount. He says that he was assured that it would not, since the move was not at his request. The respondents say that the consequences of entering a new tenancy were explained to him, including the fact that the modernised right to buy would apply from then on. Be that as it may, a new tenancy was entered into with effect from 31 October 2005. That tenancy, of 26 (2F2) Stenhouse Avenue West, continues in force.

[6] On 21 July 2016 the applicant applied to the respondents to be allowed to buy his home. For reasons which are not explained in the papers an offer to sell was not issued until 20 January 2017, a period well outwith the two months allowed by sec 63(2) of the 1987 Act. It was an offer to sell on the basis of the modernised right to buy, with the discount capped at £15.000. It is that offer, and particularly that cap, which the applicant challenges in this application.

The law

[7] Chapter 1 of Part 2 of The Housing (Scotland) Act 2001 (“the 2001 Act”) introduced a new type of tenancy called a “Scottish secure tenancy”. By virtue of The Housing (Scotland) Act 2001 (Scottish Secure Tenancy etc.) Order 2002 SSI 2002 No. 318 (“the 2002 Order”) all local authority secure tenancies (under the 1987 Act) became Scottish secure tenancies with effect from 30 September 2002 (“the conversion date”).

[8] Scottish secure tenancies were to be subject to less favourable right to buy provisions than secure tenancies under the 1987 Act. The new terms and conditions became known as the “modernised right to buy”. These changes were effected by extensive amendment of the 1987 Act including the amendment of sec 62 of that Act by sec 49 of the 2001 Act so as to read, so far as it is necessary to quote it for present purposes:

“62 The price

(1) Subject to subsection (6A), the price at which a tenant entitled to purchase a house under this Part shall be fixed as at the date of service of the application to purchase by subtracting a discount from the market value of the house.

(2) The market value for the purposes of this section shall be determined by either—

(a) a qualified valuer nominated by the landlord and accepted by the tenant; or

(b) the district valuer,

as the landlord thinks fit as if the house were available for sale on the open market with vacant possession at the date of service of the application to purchase.

For the purposes of this subsection, no account shall be taken of any element in the market value of the house which reflects an increase in value as a result of work the cost of which would qualify for a reimbursement under section 29 of the Housing (Scotland) Act 2001 (asp 10).

(3) Subject to subsection (5), the discount for the purposes of subsection (1) shall be—

(a) 20 per cent of the market value of the house,

together with

(b) an additional one per cent of the market value for every year beyond 5 of occupation by the appropriate person preceding the date of service of the application to purchase, of a house (including accommodation provided as mentioned in section 61(11)(n) or of a succession of houses provided by any persons mentioned in section 61(11),

up to a maximum discount of 35 per cent or £15,000, whichever is less.”

[8] These changes took effect from 30 September 2002 (The Housing (Scotland) Act 2001 Commencement No. 5, Transitional Provisions and Savings) Order 2002 SSI 2002 No. 321). Prior to this amendment the maximum discount had been 60% and there was no cap.

[9] Transitional provisions, regulating the rights of existing tenants as at the conversion date, are contained in the 2002 Order (No.318), Article 4 of which provides:

“Transitional provisions and savings – right to buy

4.—(1) Where, immediately before the conversion date, a tenant had a right to purchase under section 61 of the 1987 Act, the provisions of the 1987 Act and the 2001 Act shall, after the conversion date and until the earliest of–

(a) the termination of the tenancy (within the meaning of paragraph (3) below);

(b) the assignation of the tenancy; or

(c) the passing of the tenancy by operation of section 22 (succession to Scottish secure tenancy) of the 2001 Act other than to a person referred to in paragraph 2 of Schedule 3 to the 2001 Act,

apply in relation to that tenancy subject to the modifications mentioned in paragraph (2) below.

(2) The modifications mentioned in paragraph (1) above are that–

(a) section 61A and 61B of the 1987 Act shall not apply;

(b) the qualifying period of occupation in relation to the tenant’s right to purchase should be as provided for in section 61(2)(c) of the 1987 Act as that provision applied immediately before the conversion date;

(c) the discount in relation to the tenant’s right to purchase should be as provided for in section 62(3) of the 1987 Act as that provision applied immediately before the conversion date; and

(d) section 61 of the 1987 Act shall continue to apply as it applied immediately before the conversion date notwithstanding the fact that the landlord under the tenancy is a recognised body within the meaning of section 1(7) (Scottish charities) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990.

(3) For the purposes of this article, a tenancy is terminated if it is brought to an end under any of the circumstances listed in section 12(1) of the 2001 Act other than circumstances where–

(a) an order for recovery of possession has been made under section 16(2) of the 2001 Act and the ground on which proceedings for recovery of possession have been raised falls within grounds 9 to 15 of Schedule 2 to the 2001 Act; or

(b) the tenancy is terminated by written agreement between the landlord and the tenant and–

(i) the landlord has made a decision to demolish the house; and

(ii) as a result of that decision, the landlord has made other accommodation available to the tenant.”

Paragraph (2) is of Article 4 is, therefore, the provision which effects the “preserved right to buy”.

Applying the law to the facts

[10] Applying the foregoing law to the foregoing facts, there is no doubt that the applicant continued to have the preserved right to buy at least until the tenancy of 2/1 Medwin House South came to an end on 31 October 2005, notwithstanding the coming into effect of the 2001 Act changes on 30 September 2002. As to the termination of that tenancy, among the ways in which a tenancy can be terminated under sec 12(1) of the 2001 Act is “(e) by written agreement between the landlord and the tenant”. Although no document terminating the previous tenancy has been produced and the new tenancy agreement, which has been produced, contains no reference to the termination of the previous one, it is not disputed that the original tenancy came to an end when the new one began.

[11] Accordingly, whether the applicant continued to enjoy the preserved right to buy once the new tenancy had started depends on whether one or other of the two exceptions contained in para (3) of Article 4 of the 2002 Order applies. Plainly neither does: there was no order for recovery of possession of the Medwin House South property and no written agreement terminating the tenancy because the respondents had decided to demolish it.

Parties’ submissions

[12] The applicant does not dispute any of that. Instead, what he says is (a) that he was forced to move by the respondents, (b) that, although he was told about the modernised right to be he was reassured on two occasions that it would not apply to him, and (c) that justice demands that it should not apply.

[13] The respondents, for their part, rely on the law as we have set it out above and say it gives them no discretion to make an exception in this, or any other, case, notwithstanding their considerable sympathy for the applicant. They maintain that the change in status and subsequent loss of rights were explained to the applicant when he took on the new tenancy and deny having forced him to do so.

Tribunal’s consideration

[14] This is not the first hard case under the provisions of the 2002 Order, although it is, perhaps, the hardest. In Rizza v Glasgow Housing Association LTS/TR/2007/11, decision dated 25 March 2008, the applicant was claiming a preserved right to buy based on her previous occupancy, with her husband, of a warden’s flat in a sheltered housing complex of which her husband was warden. The respondents had refused her application to buy the house they had moved into from this flat because her husband had required to occupy the warden’s flat for the better performance of his duties, which meant that it was not a secure tenancy under the 1987 Act. In that case, on the basis of the same statutory provisions as we are dealing with here, the Tribunal (Lord McGhie) said “There is nothing in the statutory provisions which gives the landlords any discretion in the matter. Her tenancy is not covered by the provisions of Article 4 of the Order. It is a tenancy under the ‘modernised’ provisions. It follows that we cannot make the finding requested in the present case”.

[15] Carey v Glasgow Housing Association LTS/TR/2010/05, decision of 5 January 2011, was closer on its facts to the present case, in as much as it involved an applicant who required to be rehoused for medical reasons. His case is conveniently summarised at para [5] of the judgement:

“the applicant complains about the procedure and lack of advice given to him when he signed the tenancy agreement in July 2003; suggests that his termination of the former tenancy and acceptance of the new tenancy was not voluntary and that he may be being discriminated against by reason of his disability; and also raises a number of other complaints about the respondents’ conduct”.

So it had strong similarities to the present case.

[16] That case was decided by Mr John Wright QC, who, in deciding to follow Lord McGhie in Rizza, said this (at para [7]):

“As the Tribunal pointed out in Rizza v Glasgow Housing Association, another case involving the discount following the coming into force of the 2001 Act, there is nothing in the legislation which gives us any discretion to depart from these provisions. In particular, although we can understand the suggestion that where a tenancy has been given up, and a new tenancy accepted, for essential medical reasons, this may be said to be ‘outwith the control’ of the tenant, there is no provision giving us any discretion to depart from the statutory provisions for such a reason.”

[17] As we have said, the applicant does not question the law; what he argues is that an exception should be made in his case. Regrettably, we see no way of achieving that result. Whatever assurances he was given does not change the law. Nor does the fact that he felt coerced into moving house. The law simply does not give social landlords any discretion as to allow a preserved right to buy to be carried forward into a new tenancy except in the limited circumstances set out in para (3) of Article 4 of the 2002 Order. In those circumstances assurances of the kind which the applicant describes ought not to have been given to him.

Decision

[18] Accordingly, our conclusion is that the applicant is not entitled to the preserved right to buy. The application for an order under sec 71(2)(b) of the 1987 Act, ordaining the respondents to serve an offer to sell on that basis, therefore has to be dismissed. That is a very unfortunate decision to have to reach on the facts of this case but, like its predecessors, the case has to be decided in accordance with the law.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 5 July 2017

W Douglas Ballantyne – Deputy Clerk to the Tribunal