Sale of Houses
Powers of Sale
Local authorities have the power to sell or lease dwellings under a purchase scheme to another housing authority or to other persons where the dwellings are not occupied. Regulations may be made in relation to
- the classes of houses to which a purchase scheme may apply
- the determination of the discount,
- allowance to be deducted from the purchase price
- and other terms and conditions,
- other related matters
- together with the period for which the scheme will apply.
The 1997 Act placed restrictions on the sale by local authorities and State-subsidised housing. The sale need not be made if it considers that the tenant or a member of this house is or has engaged in antisocial behaviour or the sale would not be in the interests of good estate management.
Post-Sale
Where a dwelling is sold under a purchase scheme, the housing authority is not liable for any charges payable in relation to the dwelling, in relation to services, insurance or the management of control of common areas after the date of the sale.
The former duty to ensure that houses were sold in good repair was repealed. However, there is a common law duty on local authorities in relation to fitness for habitation of houses sold.
Sale of Apartments
The 2009 Act allows for the sale of local authority apartments. When an authority considers an apartment complex as suitable for sale, it is to hold a vote. The housing authority continues as landlords of unsold units.
Tenant purchasers may have the option to purchase their properties by incremental equity purchases over a 20 to 30-year period. In this case, a charge is based on the property for the proportion of the equity not paid for, which declines over a 20 to 30-year period of occupancy.
The housing authority may invoke provisions allowing suspension in cases where the purchaser breaches the terms of the lease. Under the scheme, the equity portion may effectively be given free of charge to the purchaser, provided the terms of the scheme are complied with.
If the tenant purchaser wishes to resell the apartment during the period, the authority has the first option to purchase it back. The authority must repay the value of any outstanding charge on the property.
Criteria for Sale
The authority may propose the sale of the apartments where
- it is satisfied that the sale is consistent with good estate management;
- the complex is suitable for designation.
- it is satisfied with the management and maintenance arrangement;
- that the complex is structurally sound and
- has a good and marketable title that can be transferred to the management company.
Where 65% of tenants are entitled to vote, vote in favour, and a minimum number agree they are willing to serve as directors of the owners’ management company. The OMC accepts ownership leases back to the authority, the unsold apartments. Tenants are permitted to purchase under the incremental purchase scheme.
In order for the owner’s management company to proceed, a minimum number of sales must proceed, and a minimum number of 10 tenants must have indicated their willingness to act as directors for the initial period.
Part IV of the legislation applies to separate and self-contained dwellings in an apartment complex, which require arrangements for management and upkeep. This is similar to the Multi-Unit Developments Act legislation.
Priority of Charges
A housing authority may, in the case of homeowners who purchased their homes under previous schemes, enter an agreement with a lending institution as regards the priority of charges to enable a subsequent equity release or ‘top-up’ mortgage by the homeowner (for example, to finance an extension). This is in respect of affordable homes provided under Part V of the Planning and Development Act 2000 and Part 2 of the Housing (Miscellaneous Provisions) Act 2002.