Rent is Payment Towards Purchase.

A tenant who exercises his right to buy is entitled to expect the process to be carried out with reasonable speed by the landlord. When this does not occur, the tenant can serve an 'operative notice of delay' on the landlord. The effect of issuing such a notice is that any rent then paid is treated as being a payment on account of the purchase price.

In a recent case, a tenant served such a notice on Southwark London Borough Council. The tenant claimed that the whole of the £17,000 purchase price for the property had been paid as rent during the period of the Council's delay and this therefore constituted a payment on account of the purchase price. The Council argued that since the tenant's rent had been paid by way of housing benefit, the payments did not count towards the purchase price.

The Court of Appeal rejected the Council's arguments. It did not matter who paid the rent during the delay period, only that the rent was paid.

Partner Note
Hanoman v Southwark London Borough Council (No 2) [2008] EWCA Civ 624. See http://www.lawreports.co.uk/WLRD/2008/CACiv/jun0.7.htm.

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