OPINION

Karen Margaret Taylor (Applicant)
v
North Lanarkshire Council (Respondents)

Subjects: 70 Blairhill Street, Coatbridge

Introduction and Procedure

1. This is an application for a determination in terms of section 65(2) of the Housing (Scotland) Act 1987 of disputed matters relating to an offer to sell a dwellinghouse. The application has been amended in terms of an “amended response” to the respondents’ answers, whereby the applicant also makes reference to section 71 of the 1987 Act. The applicant has made a wide range of complaints in her pleadings in respect of the respondents’ actings, but for present purposes includes the issue whether a date of entry proposed by the respondents amounted to an unreasonable condition in the offer to sell. The applicant contends that the stipulated date of entry was not satisfactory to her, but she only proposed an alternative date outwith the period provided by the s 65 mechanism for seeking a variation to the conditions. A preliminary question has emerged whether the applicant can nevertheless avail herself of the procedure provided by s 71(1)(d) in order to obtain an offer in proper form. As will be seen another more fundamental issue has also emerged.

2. A debate was held on preliminary matters on 20 February 2019. The debate was on the questions:

(1) Whether the application, as an application under s 65(2) of the 1987 Act is time barred, and

(2) If it is, whether the application discloses any other remedy (s 71 of the Act having been referred to by the applicant) which may be available to the applicant and is in the Tribunal’s power to grant.

3. The applicant represented herself at the hearing. The respondents were represented by Mr Gardiner, solicitor, a legal manager of the respondents.

4. The applicant’s case also mentions the fact that the respondents’ offer to sell was itself made outwith the statutory timescales, and refers to s 71(1)(a) of the 1987 Act. While at avizandum following the debate it appeared to the Tribunal that two cases which had not been cited, namely Fullerton v Monklands District Council 1983 SLT (Lands Tr) 15 and Thomson v Stirling District Council 1985 SLT (Lands Tr) 4 may be in point. In summary the Tribunal had previously held under predecessor provisions of the Tenants’ Rights Etc. (Scotland) Act 1980, that a late offer to sell by a local authority was non statutory, and thus a tenant had the right to proceed directly to the remedies provided by the forerunners to s 71(1)(a) and s 71 (2)(a) of the 1987 Act (namely ss 7(2)(a) and (3) of the 1980 Act.). In Thomson this was held to be the case even where the tenant had submitted a qualified acceptance to the late offer. We referred parties to these cases and invited further written submissions, which were duly received.

Legislation

The Housing (Scotland) Act (“the 1987 Act”), prior to repeal of the right to purchase provisions on 1 August 2016, provided as follows:

“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 …

(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”) containing—

(d) any conditions which the landlord intends to impose under section 64…

64.— Conditions of sale.

(1) …an offer to sell under section 63(2) shall contain such conditions as are reasonable, provided that—

(a) the conditions shall have the effect of ensuring that the tenant has as full enjoyment and use of the house as owner as he has had as tenant;

(b) the conditions shall secure to the tenant such additional rights as are necessary for his reasonable enjoyment and use of the house as owner…; and

(c) the conditions shall include such terms as are necessary to entitle the tenant to receive a good and marketable title to the house.

65.— Variation of conditions.

(1) Where an offer to sell is served on a tenant and he wishes to exercise his right to purchase, but—

(a) he considers that a condition contained in the offer to sell is unreasonable; or

(b) he wishes to have a new condition included in it;

he may request the landlord to strike out or vary the condition, or to include the new condition, …, as the case may be, by serving on the landlord within one month after service of the offer to sell a notice in writing setting out his request; and if the landlord agrees, it shall accordingly serve an amended offer to sell on the tenant within one month of service of the notice setting out the request.

(2) A tenant who is aggrieved by the refusal of the landlord to agree to strike out or vary a condition, or to include a new condition, … or by his failure timeously to serve an amended offer to sell under the said subsection, may, within one month or, with the consent of the landlord given in writing before the expiry of the said period of one month, within two months of the refusal or failure, refer the matter to the Lands Tribunal for determination.

(3) In proceedings under subsection (2), the Lands Tribunal may, as it thinks fit, uphold the condition or strike it out or vary it, or insert the new condition … and where its determination results in a variation of the terms of the offer to sell, it shall order the landlord to serve on the tenant an amended offer to sell accordingly within 2 months thereafter.

66.— Notice of acceptance.

(1) Where an offer to sell is served on a tenant and he wishes to exercise his right to purchase and—

(a) he does not dispute the terms of the offer to sell by timeously serving a notice setting out a request under section 65(1) or by referring the matter to the Lands Tribunal under subsection (1)(d) of section 71; or

(b) any such dispute has been resolved;

the tenant shall serve a notice of acceptance on the landlord within 2 months of whichever is the latest of—

(i) the service on him of the offer to sell;

(ii) the service on him of an amended offer to sell (or if there is more than one, of the latest amended offer to sell);

(iii) a determination by the Lands Tribunal under section 65(3) which does not require service of an amended offer to sell;

(iv) a finding or determination of the Lands Tribunal in a matter referred to it under section 71(1)(d) where no order is made under section 71(2)(b);

(v) the service of an offer to sell on him by virtue of subsection (2)(b) of section 71

(2) Where an offer to sell (or an amended offer to sell) has been served on the tenant and a relative notice of acceptance has been duly served on the landlord, a contract of sale of the house shall be constituted between the landlord and the tenant on the terms contained in the offer (or amended offer) to sell.

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 (even if only such offer to sell as is mentioned in paragraph (d)) or a notice of refusal; or

(b) the Lands Tribunal has made a determination under section 65(3) (variation of terms of offer to sell) and the landlord has failed to issue an amended offer to sell within 2 months thereafter; or

(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; or

(d) a landlord has served an offer to sell whose contents do not conform with the requirements of paragraphs (a) to (e) of section 63(2) (or where such contents were not obtained in accordance with the provisions specified in those paragraphs),

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 and 65 to 66C;

and any consent given, any discretion exercised, or anything done, under the foregoing provisions of this subsection shall have effect as if it had been duly given, exercised or done by the landlord; or

(b) paragraph (d) of that subsection applies, and if it so finds it may order the landlord to serve on the tenant an offer to sell, in proper form, under section 63(2)within such time (not exceeding 2 months) as it may specify.

…”

The right to buy provisions of the 1987 Act were repealed by section 1 of Housing (Scotland) Act 2014. Saving provisions under the Housing (Scotland) Act 2014 (Commencement No. 1, Transitional and Saving Provisions) Order 2014/264 provided:

“4. Despite the commencement of section 1 (abolition of the right to buy) of the Act, the provisions repealed or modified by subsection (1) of that section … continue to have effect as they had effect on 31st July 2016 in relation to—

(a) any application to purchase submitted under section 63(1) of the 1987 Act before 1st August 2016;

(b) any contract to purchase, and any purchase, following on from such an application.”

Cases

Fullerton v Monklands District Council 1983 SLT (Lands Tr) 15
Thomson v Stirling District Council 1985 SLT (Lands Tr) 4
East of Scotland Water Authority v Livingstone 1999 SC 65
Graham v Northern Joint Police Board 2000 SLT (Lands Tr) 7
Smith v Aberdeen City Council 2001 Hous.L.R. 93
Ogg v Perth & Kinross Council 2005 Hous.L.R.18
Fletcher v South Lanarkshire Council 2006 SLT (Lands Tr) 51
Pettigrew v River Clyde Homes 2017 Hous.L.R.15
Nimmo v City of Edinburgh Council LTS/TR/2017/008; 19 April 2018

Background facts and circumstances

5. The following narrative does not appear to be in dispute for the purpose of determining the preliminary issues. The applicant is a secure tenant of the respondents in respect of her house 70 Blairhill Street, Coatbridge. She submitted an application to purchase the house on 21 July 2016, shortly before the right to buy was abolished on 1 August 2016. The respondents submitted a formal offer to sell the subjects to her on 23 March 2017, i.e. outwith the two month period provided by s 63(2). We were informed that the delay in the offer to sell was due to the significant increase in volume of applications received by the respondents in the period leading up to the repeal of the 1987 Act. The applicant challenged the offer to sell by letter dated 11 May 2017. Her letter referred to certain matters of valuation and the statutory discount proposed in the offer. The respondents submitted a second offer to sell on 31 May 2017 which contained a reduction in the price. The applicant challenged this offer by letter dated 6 July 2017 on the basis that the offer did not address the previously stated issue of the discount. The respondents proceeded to submit a third offer to sell dated 13 September 2017, which increased the rate of discount thereby further reducing the price payable.

6. The third offer provided for a date of entry of 4 December 2017 or such other date as may be mutually agreed in writing, when the price would be payable. Condition 20 of the offer stated that the offer would remain open for unqualified acceptance for two months from the date thereof and for qualified acceptance for one month from the date thereof, unless previously withdrawn by the council in writing, “when failing acceptance it shall lapse”. So unless a qualified acceptance was received by 13 October 2017 or an unqualified acceptance was received by 13 November 2017, the offer would lapse. The one month and two month time limits in condition 20 would appear to coincide with the time limits specified in s 65(1) and s 66(1)(b)(i) respectively.

7. The applicant instructed solicitors to deal with the transaction on her behalf. On 24 October 2017 they submitted a qualified acceptance purporting to accept the offer of 13 September 2017, but proposing a new date of entry to be 31 January 2018. Various informal correspondence ensued. We were unclear whether some of it may be in dispute so we do not attempt to detail it all here. However, the correspondence which has been lodged indicates that the respondents took the position that the qualified acceptance was outwith the one month time limit in order to qualify the conditions. On 25 October the respondents made this point by email and asked for a “de plano” acceptance. They also asked the reason for changing the date of entry. The applicant’s solicitors replied on 1 November stating that the change in date was in order for funds to be arranged for the purchase.

8. As it transpired no unqualified acceptance was submitted by the two month deadline of 13 November 2017. The applicant’s solicitors indicated by email dated 29th November that they had been unable to get instructions and referred to certain personal circumstances of the applicant. They further indicated that she wished to proceed with the transaction. By email of 30 November 2017 the respondents took the position that the application was time barred since there had been no acceptance within the 2 month period, and the council had no discretion to extend the time limits. Further correspondence took place where, by a letter dated 13 December, the applicant’s solicitors indicated that funding could be arranged within two weeks of 4 December 2017 and asked the respondents to resurrect the transaction. An officer of the council replied by email dated 21 December. This expressed sympathy for the applicant’s personal circumstances but concluded that the offer had fallen and that the council had no discretion to accept a notice of acceptance or otherwise issue a fresh offer.

9. As we understand it, the applicant proceeded to make certain complaints about certain actings of the respondents to the respondents themselves as well as to the Scottish Public Services Ombudsman. The applicant also proceeded to make the application to the Tribunal on 8 October 2018.

Submission for respondents

10. The initial application to the Tribunal was based upon s 65(2) of the 1987 Act. This provides a framework for a tenant who is aggrieved by the refusal of a landlord to agree to strike out or vary a condition, or to include a new condition, to apply to the Lands Tribunal within certain time periods. The section requires the tenant to seek to strike out or vary the condition within one month after service of the offer to sell. This would have required the qualified acceptance to have been submitted by 13 October 2017, but was only done on 24 October 2017. The periods in which an application to the Tribunal could be made were one month from the refusal or failure of the landlord to strike out or vary the condition or, with the consent of the landlords, a period of two months from the refusal or failure. It was clear that on any view the application nearly a year after the relevant correspondence was out of time. Section 65 refers to “conditions” and the date of entry was a “condition,” so the section applied. The Tribunal should follow the approach in Nimmo v City of Edinburgh Council at paragraph 20, which was that s 65(2) operated as a time bar.

11. It was further submitted that there was no other remedy available to the applicant, and in particular no other remedy under s 71. The offer to sell had lapsed in terms of condition 20, which time limit of 2 months for an acceptance was consistent with the time limit under s 66.

12. The respondents’ position was fortified by Smith v Aberdeen City Council. The Tribunal at paragraph [28] had commented that the machinery adopted for implement of the tenant’s right to buy is to create procedures which replicate, where possible, the essentials for consensual sale. This underlined the position that the offer had lapsed according to its terms and should not be revived. Emphasis was made to the fact there was no concluded contract between the parties. Reference was made to Pettigrew v River Clyde Homes where an offer had lapsed and the Tribunal had questioned the availability of a remedy. However we did not understand the respondents to table a formal plea of waiver or acquiescence, which concepts had been mentioned in the discussion in that case and other cases.

13. During the debate we questioned whether the reasonableness of conditions might be challenged via s 71 by virtue of s 63(2)(d) and s 64(1), and whether the applicant’s “amended response” did not put this in issue in respect of the stipulated date of entry. The respondents’ written submissions contended that the applicant’s pleadings had not disclosed any of the deficiencies in the offer mentioned by s 63(2) which might be challenged under an application under s 71(1)(d). However the respondents’ solicitor accepted that if the application was not time barred then this branch of the case would require evidence to be heard.

14. The respondents underlined the importance of the fact that s 65 provided a timetable for the variation of conditions at the behest of a tenant, and that it would be odd if the tenant could get a second bite at the cherry via s 71. We put to the respondents’ solicitor the fact the council had apparently been prepared to accept that the first two offers should be revised after representations by the applicant were made only after the one month period referred to in s 65(1). We understood him to submit that there the issue had been the valuation and the level of discount, which were different types of condition to the date of entry condition now in issue.

15. There were public policy reasons why tenants should comply with the statutory timescales, since there were administrative costs on local authorities in attending to the applications. There were a number of offers to sell issued by the respondents in response to the large number of applications made shortly prior to the repeal of the Act, which offers had now lapsed. Tenants should not have the right to be able to revive them simply by invoking s 71. This would give rise to uncertainty and additional costs for the respondents. It was not accepted that the Tribunal could require a new offer to sell to be issued. A further offer could not be compelled since the provisions of the right to buy legislation had been repealed.

16. With reference to Fullerton v Monklands District Council and Thomson v Stirling District Council, it was submitted that the Tribunal was not bound by their earlier decisions. The Tribunal should follow the more recently decided case of Pettigrew v River Clyde Homes which was dealing with essentially the same legislation. There the Tribunal had been prepared to consider the reasonableness of conditions in the offer to sell, even although the offer had been issued outwith the two month period specified in s 63. Having issued an offer to sell on 13 September 2017, the respondents’ obligations to do so under s 63 had been discharged.

17. It was further submitted that the offer to sell contained a time limit for acceptance of equal length to that specified in s 66 and was a statutory offer. Reference was made to Smith v Aberdeen City Council in this context. There was a public policy rationale for landlords to be able to benefit from the certainty of time limits imposed by the 1980 and 1987 Acts, since the matter related to the availability of their resources.

Submissions for applicant

18. The applicant’s written arguments are somewhat wide ranging and diffuse, and we do not attempt to summarise them all here. At the hearing she submitted that if that part of her application under s 65 was held to be time barred, she still wished to proceed with the application under s 71. In summary we understood her position to be that the offer was not in proper form because the condition specifying the date of entry as at 4 December 2017 was not reasonable in the circumstances, and it was not reasonable that that date should be immutable.

19. The applicant adopted the views of the Tribunal in Fullerton and Thomson, namely that where the offer to sell had been outwith the statutory timetable, the tenant could thereupon proceed to invoke s 71(1)(a) of the 1987 Act.

Discussion by Tribunal

20. This is an unfortunate case. Both parties had been seeking to proceed with the transaction, but at the point of the offer lapsing the respondents took the view that they could not proceed in the light of the statute. As we discuss below, however, we consider that there are potentially two routes open to deal with the matter.

Section 71(1)(a) and (2)(a)

21. It is logical to deal first with the fact that the respondents’ offer to sell was served outwith the two month period specified by s 63(2) of the 1987 Act. In Fullerton and Thomson it was accepted that a late offer meant that the tenant could insist on proceeding under the forerunner of s 71(1)(a). In this event the Tribunal had no alternative but to make a finding under what is now s 72(2)(a) and then take such steps themselves (unless certain other provisions were engaged) to complete the necessary procedures for the transaction. What the Tribunal could not do was, in effect, to convert a late, and therefore non-statutory offer, into a statutory one. In Thomson the Tribunal went on to hold that the tenant’s submission of a qualified acceptance to the offer did not amount to a positive waiver of the initial time bar by opting to treat the non-statutory offer as statutory.

22. The respondents did not argue that Fullerton and Thomson were wrongly decided, or that such changes in the wording between the 1980 and 1987 Acts meant that a different result should now apply. The respondents’ position was that we should follow the approach in Pettigrew. In Pettigrew the Tribunal were being asked to insert a new condition into missives over 5 years after the date of the offer in question. There was no apparent explanation for the delay. Although the offer had lapsed under its own terms, no argument of waiver or acquiescence was made against the applicant. The Tribunal expressed a certain amount of unease with the situation, and pointed out that for the transaction to proceed there would require to be found a way of dealing with the fact the offer had lapsed. If a remedy was appropriate, this could be provided by requiring a fresh offer to be made. Mention was also made in passing that the landlord’s offer had been served outwith the two month period. It would have been possible for the tenant to take action, but as an offer was ultimately made, any order from the Tribunal to require the respondents to make another offer would have appeared unnecessary.

23. Strictly speaking, the Pettigrew case involved ss 71(1)(d) and (2)(b), whereas the present branch of the case invokes different subsections namely ss (1)(a) and (2)(a). In Fullerton and Thomson the Tribunal were considering the remedy whereby the Tribunal in effect displaced the landlords and themselves required to take all the necessary steps for completing the statutory procedures. Subsection (1)(a) is the provision which entitles the tenant to seek a remedy where the landlord has failed to serve a timeous offer to sell, and although mention was made by one of the parties in Pettigrew of a late offer, the provision was not in fact being invoked. One would not therefore have expected reference to Fullerton and Thomson in this context, and theywere not cited; the hesitation which the Tribunal expressed in dealing with the case after lengthy delay was obiter, since the Tribunal dealt with the case on its merits.

24. So in summary we are not persuaded that we should avoid the Tribunal’s reasoning in Fullerton and Thomson. This was not the result of the decision in Pettigrew. We are persuaded that on the face of it the applicant, as a tenant receiving a non-statutory offer to sell, which has now lapsed, has a right to proceed under ss 71(1)(a) and (2)(a) to the remedy there provided. So for the purposes of the preliminary debate we would conclude that the application discloses a remedy which may be available to the applicant and is within the T Tribunal’s power to grant.

Section 65

25. Turning to the next branch of the case, we agree with the respondents to the extent that the applicant cannot avail herself of the s 65 procedure. Assuming the qualified acceptance constituted a notice to vary a condition for the purpose of ss (1), namely to postpone the proposed date of entry, it was served upon the respondents outwith the statutory one month period from the date of the offer. Moreover, the one and two month periods for an application to the Tribunal under ss (2) had long expired before the proceedings in fact commenced in October 2018. The s 65(2) part of the application is therefore time barred.

Section 71(1)(d) and (2)(b)

26. This leaves the applicant’s case under s 71(1)(d). As we understood her submissions in context, she contends that one of the conditions, namely the proposed date of entry for 4 December 2017, was not reasonable. She needed time to arrange finance. That is why her qualified acceptance sought to change the entry date to 31 January 2018. There also appear to have been some difficult personal circumstances for her during the period of the offer and proposed transaction. We note that the offer, had it been accepted in terms of condition 20, i.e. within 2 months of 13 September 2017, could have left as little as 3 weeks between the date of conclusion of missives and the proposed date of settlement. In this period it would have been necessary to ensure relevant documents were to hand, complete the examination of title, complete the conveyancing and complete the loan and security documentation. The applicant indicates there would have been no prejudice to the respondents in delaying the date of entry since the new date was in the same financial year. There had been no prior discussion for a date of entry prior to the offer. It was difficult to see why a particular date of entry should be important to the respondents given the lengthy delays on their part in producing an offer, and indeed the “correct” offer. The respondents’ solicitor accepted that the merits of the applicant’s case would require the hearing of evidence should the case succeed at this preliminary stage. We agree with that assessment, and say no more about the merits here.

27. We now deal with the transitional provisions. The consequence of Art 4 of the 2014 Order is that the right to purchase provisions of the 1987 Act are saved in respect of any application to purchase submitted before 1 August 2016, and in respect of any contract to purchase or purchase following thereon. Here the application to purchase was timeous. There has been no concluded contract following upon the application, but the transitional provisions still apply in respect of the application itself. The saved provisions include the procedures under s 65 and s 71. It seems to us that only if the statutory procedures can be said to have been exhausted in respect of a relevant application, or an applicant’s rights in the application have been extinguished or rendered unenforceable under some recognised legal concept, can it be concluded that the savings no longer apply. Put simply, the question is whether the application to purchase is still live in these circumstances.

28. The respondents make reference to Smith v Aberdeen City Council. There the respondents had withdrawn their (timeous) offer, and the Tribunal found that for the purposes of s 71 it should be treated as if it had never validly existed (paragraph 31). If the offer was treated as nullified on withdrawal, the tenant would still have the same protection as if the offer had never been made, and would be able to apply to the Tribunal under s 71. This emphasises that tenants’ rights under the Act are not readily undermined.

29. In Pettigrew v River Clyde Homes the Tribunal at paragraph [18] contrasted sections 65(2) and 71 by reference to Ogg v Perth and Kinross Council and Fletcher v South Lanarkshire Council. It is worth quoting the relevant passages in full. In Ogg the Tribunal said:

“[44] Although the Act envisages challenges to the reasonableness of conditions contained in offers to sell being pursued by applications under s 65(2), such questions can also be raised in applications, such as the present, under s 71. The issue is essentially the same, namely whether the conditions offered meet the test of reasonableness set out in s 64(1). Put shortly, the applicants are entitled to be offered conditions which are reasonable but which also have the effect of ensuring that they have as full enjoyment and use of the house as owners as they have had as tenants; to such additional rights as are necessary for their reasonable enjoyment and use of the house as owners (subject to any relative duties); and to such terms as are necessary to entitle them to receive a good and marketable title to the house.”

30. In other words the Tribunal thought that applications concerning the right to reasonable conditions under s 64(1) could be brought under the procedures mentioned both by s 65(2) and s 71(1)(d). The latter subsection makes reference to contents of the offer conforming with s 63(2)(a) to (e) and “the provisions specified in those paragraphs” (our emphasis). Paragraph (d) of s 63(2) is one of “those paragraphs” and refers to “conditions which the landlord intends to impose under section 64.” Section 64(1) expressly provides for the conditions to be reasonable. Thus the requirement for reasonableness under s 64(1) also falls under the jurisdiction of the Tribunal via any application under s 71(1)(d). We do not read the Tribunal as having taken a narrow approach to s 64(1) in Ogg.

31. So for present purposes if a condition specifies a date of entry which is unreasonably short, such that the transaction is rendered impracticable for the tenant, it is difficult to see how the requirement for terms necessary to entitle the tenant to receive a good and marketable title has been fulfilled in a meaningful way. If the tenant cannot settle the transaction on the due day, she will risk not receiving a title at all.

32. In Fletcher the Tribunal said:

“We do not accept the respondents’ submission that this application lodged just over two months from the date of the offer to sell was not lodged timeously. We consider, as the tribunal did in Graham v Northern Joint Police Board, that there is no short time limitation period for applications under s 71. The absence of express limitation in this section, by contrast with a series of specific time limit provisions in other sections of this part of the Act, seems to us to make the matter clear. We do accept that this case arises under quite different circumstances from those in Graham, but we did not find Mrs Cairns’ attempt to deduce a time limit through s 66 convincing. Section 66(1), as amended by the Housing (Scotland) Act 2001, provides as follows:-

“(1) Where an offer to sell is served on a tenant and he wishes to exercise his right to purchase and –

(a) he does not dispute the terms of the offer to sell by timeously serving a notice setting out a request under section 65(1) or by referring the matter to the Lands Tribunal under subsection (1)(d) of section 71 …

the tenant shall serve a notice of acceptance on the landlord within 2 months of whichever is the latest of …” (a series of specified events).

We agree with Mr Kelly that s 66(1) cannot be read as importing a time limit into s 71 as well as s 65(1): to the contrary, its wording seems to confirm the distinction in this respect between s 65 and s 71.

The overlap between s 71(1)(d) and the procedure under s 65 for seeking variation in the terms of the offer to sell, with only the latter procedure being subject to specific time limits, may be seen as producing this slightly unfortunate distinction between the two procedures, but that is the result where a tenant is able to bring himself within s 71(1)(d) as well as having a complaint which can be advanced through s 65.”

33. The specified events being referred to in s 66(1) include certain outcomes of procedure under s 71(1)(d). So where a tenant has availed herself of s 71(1)(d), a time limit for acceptance may only emerge under s 66 sometime after, and perhaps well after, the date of the impugned offer to sell. But it seems to us that the above passages make it clear that the reasonableness of a respondents’ offer can still be challenged under s 71(1)(d), for which there is no short time limit, despite the timescales for a challenge under s 65(2) having expired. The respondents’ solicitor did not submit that the above cases were incorrectly decided. We accept his position that there is something of an anomaly in the legislation, as has been highlighted in the several previous cases. But we have no reason to depart from the views previously expressed by the Tribunal. We do not think that the application under s 71(1)(d) is time barred.

34. We now turn to the respondents’ contention that the offer had lapsed under condition 20. A qualified acceptance was received on behalf of the applicant, but some 11 days outwith the one month period stipulated for the submission of a qualified acceptance. The respondents had thereupon asked for an unqualified acceptance, but this was not forthcoming. Since no unqualified acceptance was received within two months of the date of the offer, it expressly lapsed and, as we understood the argument, could not be revived.

35. We do not think a purely contractual approach is appropriate in dealing with the issue of the offer lapsing. The applicant’s right to purchase is underpinned by statute and the Tribunal has a role to assess the reasonableness of the conditions. It is apparent that if the applicant is correct in her contention that the date of entry was unreasonably short in terms of timescale, it may also be unfair to hold her to condition 20. Having failed to secure a later date of entry by agreement, the applicant could only avoid the offer lapsing by making an unqualified acceptance within the stipulated two month period. That might mean accepting an inconvenient date of entry, and for aught yet seen risk her being unable to settle on the due date and thus being in breach of missives. In other words there is a possible scenario that the lapse of the offer is merely a consequence of the impugned condition as to date of entry. In these circumstances we do not think we can find at this stage that the Tribunal is prevented from making an order under s 71(2)(b), i.e. to require a fresh offer to be made. The possibility of a resulting fresh offer was raised, if not formally determined, in the Tribunal’s comments in Pettigrew.

36. We now turn to the respondents’ submission that there are public policy considerations behind the requirement for tenants to comply with time limits in the legislation. However that may be, we are not persuaded that such considerations assist the respondents in the present case. Although we have found that the interplay between s 65(2) and s 71 produces an anomaly, which has perhaps become more significant upon the repeal of the statute, we do not think the language is ambiguous such that we require to resort to any particular canon of construction. As we have said, the construction of the words by the Tribunal in previous cases was not challenged, and we do not think we can interpret the words of s 71 differently just because they have now been repealed. There are also dicta to the effect that the procedures in the Act were conceived against a background where Parliament anticipated that some local authority landlords would be hostile to the sale of council houses. Thus the procedures were designed to ensure that if they were followed, a tenant with a valid right to purchase would end up with a contract for the sale of the house in question: see East of Scotland Water Authority v Livingstone, Lord President at 72G and Lord Coulsfield at 85C. On the face of it this background to the legislation would not tend to support a somewhat narrow interpretation of the statute as would produce the opposite result to that under discussion.

37. The suggested consequence of s 71 applications being used only for the purpose of “resurrecting” lapsed offers to sell, such offers having been made in response to applications to purchase submitted before 1 August 2016, seems to us to be debateable. Whether such cases could be subject to a plea, for example, of waiver or acquiescence in the light of the facts, was not explored in argument. These concepts may have the potential to address the respondents’ concerns, but we would reserve our opinion on the matter.

Decision

38. In summary we accept the respondents’ argument that the application insofar as based upon s 65(2), is time barred. We would dismiss the application insofar as it is based under this head. However, we consider that the application as based under s 71(1)(a), or alternatively (d) is not time barred by statute, and we are satisfied that the Tribunal would have power to grant a remedy should the application be well founded on its merits. We shall therefore allow the remaining application to proceed as accords.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 18 April 2019

Neil M Tainsh – Clerk to the Tribunal