Leasehold Reform, Housing and Urban Development Act 1993 (c. 28)

(The document as of February, 2008)

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(a) is prescribed by or under this Part for the giving of any notice, or the making of any application, in connection with the tenant's notice; and

(b) was current at the time when the suspension of the operation of the tenant's notice began.

(11) For the purposes of this section--

(a) "the relevant claim under Chapter I", in relation to a notice under section 13, means the claim in respect of which that notice is given; and

(b) any such claim is current if--

(i) that notice continues in force in accordance with section 13(11), or

(ii) a binding contract entered into in pursuance of that notice remains in force, or

(iii) where an order has been made under section 24(4)(a) or (b) or 25(6)(a) or (b) with respect to any such premises as are referred to in subsection (1) or (2) above (as the case may be), any interests which by virtue of the order fall to be vested in the nominee purchaser for the purposes of Chapter I have yet to be so vested.

55 Effect on tenant's notice of institution of compulsory acquisition procedures

(1) A notice given by a tenant under section 42 shall be of no effect if on the relevant date--

(a) any person or body of persons who has or have been, or could be, authorised to acquire the whole or part of the tenant's flat compulsorily for any purpose has or have, with a view to its acquisition for that purpose--

(i) served notice to treat on the landlord or the tenant, or

(ii) entered into a contract for the purchase of the interest of either of them in the flat or part of it, and

(b) the notice to treat or contract remains in force.

(2) A notice given by a tenant under section 42 shall cease to have effect if, before a new lease is entered into in pursuance of it, any such person or body of persons as is mentioned in subsection (1) serves or serve notice to treat as mentioned in that subsection.

(3) Where subsection (2) applies in relation to a notice given by a tenant under section 42, then on the occasion of the compulsory acquisition in question the compensation payable in respect of any interest in the tenant's flat (whether or not the one to which the relevant notice to treat relates) shall be determined on the basis of the value of the interest subject to and with the benefit of the rights and obligations arising from the tenant's notice and affecting that interest.

Grant of new lease

56 Obligation to grant new lease

(1) Where a qualifying tenant of a flat has under this Chapter a right to acquire a new lease of the flat and gives notice of his claim in accordance with section 42, then except as provided by this Chapter the landlord shall be bound to grant to the tenant, and the tenant shall be bound to accept--

(a) in substitution for the existing lease, and

(b) on payment of the premium payable under Schedule 13 in respect of the grant,

a new lease of the flat at a peppercorn rent for a term expiring 90 years after the term date of the existing lease.

(2) In addition to any such premium there shall be payable by the tenant in connection with the grant of any such new lease such amounts to the owners of any intermediate leasehold interests (within the meaning of Schedule 13) as are so payable by virtue of that Schedule.

(3) A tenant shall not be entitled to require the execution of any such new lease otherwise than on tendering to the landlord, in addition to the amount of any such premium and any other amounts payable by virtue of Schedule 13, the amount so far as ascertained--

(a) of any sums payable by him by way of rent or recoverable from him as rent in respect of the flat up to the date of tender;

(b) of any sums for which at that date the tenant is liable under section 60 in respect of costs incurred by any relevant person (within the meaning of that section); and

and, if the amount of any such sums is not or may not be fully ascertained, on offering reasonable security for the payment of such amount as may afterwards be found to be payable in respect of them.

(4) To the extent that any amount tendered to the landlord in accordance with subsection (3) is an amount due to a person other than the landlord, that amount shall be payable to that person by the landlord; and that subsection has effect subject to paragraph 7(2) of Schedule 11.

(5) No provision of any lease prohibiting, restricting or otherwise relating to a sub-demise by the tenant under the lease shall have effect with reference to the granting of any lease under this section.

(6) It is hereby declared that nothing in any of the provisions specified in paragraph 1(2) of Schedule 10 (which impose requirements as to consent or consultation or other restrictions in relation to disposals falling within those provisions) applies to the granting of any lease under this section.

(7) For the purposes of subsection (6), paragraph 1(2) of Schedule 10 has effect as if the reference to section 79(2) of the [1988 c. 50.] Housing Act 1988 (which is not relevant in the context of subsection (6)) were omitted.

57 Terms on which new lease is to be granted

(1) Subject to the provisions of this Chapter (and in particular to the provisions as to rent and duration contained in section 56(1)), the new lease to be granted to a tenant under section 56 shall be a lease on the same terms as those of the existing lease, as they apply on the relevant date, but with such modifications as may be required or appropriate to take account--

(a) of the omission from the new lease of property included in the existing lease but not comprised in the flat;

(b) of alterations made to the property demised since the grant of the existing lease; or

(c) in a case where the existing lease derives (in accordance with section 7(6) as it applies in accordance with section 39(3)) from more than one separate leases, of their combined effect and of the differences (if any) in their terms.

(2) Where during the continuance of the new lease the landlord will be under any obligation for the provision of services, or for repairs, maintenance or insurance--

(a) the new lease may require payments to be made by the tenant (whether as rent or otherwise) in consideration of those matters or in respect of the cost thereof to the landlord; and

(b) (if the terms of the existing lease do not include any provision for the making of any such payments by the tenant or include provision only for the payment of a fixed amount) the terms of the new lease shall make, as from the term date of the existing lease, such provision as may be just--

(i) for the making by the tenant of payments related to the cost from time to time to the landlord, and

(ii) for the tenant's liability to make those payments to be enforceable by distress, re-entry or otherwise in like manner as if it were a liability for payment of rent.

(3) Subject to subsection (4), provision shall be made by the terms of the new lease or by an agreement collateral thereto for the continuance, with any suitable adaptations, of any agreement collateral to the existing lease.

(4) For the purposes of subsections (1) and (3) there shall be excluded from the new lease any term of the existing lease or of any agreement collateral thereto in so far as that term--

(a) provides for or relates to the renewal of the lease,

(b) confers any option to purchase or right of pre-emption in relation to the flat demised by the existing lease, or

(c) provides for the termination of the existing lease before its term date otherwise than in the event of a breach of its terms;

and there shall be made in the terms of the new lease or any agreement collateral thereto such modifications as may be required or appropriate to take account of the exclusion of any such term.

(5) Where the new lease is granted after the term date of the existing lease, then on the grant of the new lease there shall be payable by the tenant to the landlord, as an addition to the rent payable under the existing lease, any amount by which, for the period since the term date or the relevant date (whichever is the later), the sums payable to the landlord in respect of the flat (after making any necessary apportionment) for the matters referred to in subsection (2) fall short in total of the sums that would have been payable for such matters under the new lease if it had been granted on that date; and section 56(3)(a) shall apply accordingly.

(6) Subsections (1) to (5) shall have effect subject to any agreement between the landlord and tenant as to the terms of the new lease or any agreement collateral thereto; and either of them may require that for the purposes of the new lease any term of the existing lease shall be excluded or modified in so far as--

(a) it is necessary to do so in order to remedy a defect in the existing lease; or

(b) it would be unreasonable in the circumstances to include, or include without modification, the term in question in view of changes occurring since the date of commencement of the existing lease which affect the suitability on the relevant date of the provisions of that lease.

(7) The terms of the new lease shall--

(a) make provision in accordance with section 59(3); and

(b) reserve to the person who is for the time being the tenant's immediate landlord the right to obtain possession of the flat in question in accordance with section 61.

(8) In granting the new lease the landlord shall not be bound to enter into any covenant for title beyond that implied from the grant, and a person entering into any covenant required of him as landlord shall be entitled to limit his personal liability to breaches of that covenant for which he is responsible.

(9) Where any person--

(a) is a third party to the existing lease, or

(b) (not being the landlord or tenant) is a party to any agreement collateral thereto,

then (subject to any agreement between him and the landlord and the tenant) he shall be made a party to the new lease or (as the case may be) to an agreement collateral thereto, and shall accordingly join in its execution; but nothing in this section has effect so as to require the new lease or (as the case may be) any such collateral agreement to provide for him to discharge any function at any time after the term date of the existing lease.

(10) Where--

(a) any such person ("the third party") is in accordance with subsection (9) to discharge any function down to the term date of the existing lease, but

(b) it is necessary or expedient in connection with the proper enjoyment by the tenant of the property demised by the new lease for provision to be made for the continued discharge of that function after that date,

the new lease or an agreement collateral thereto shall make provision for that function to be discharged after that date (whether by the third party or by some other person).

(11) The new lease shall contain a statement that it is a lease granted under section 56; and any such statement shall comply with such requirements as may be prescribed by rules made in pursuance of section 144 of the [1925 c. 21.] Land Registration Act 1925 (power to make general rules).

58 Grant of new lease where interest of landlord or tenant is subject to a mortgage

(1) Subject to subsection (2), a qualifying tenant shall be entitled to be granted a new lease under section 56 despite the fact that the grant of the existing lease was subsequent to the creation of a mortgage on the landlord's interest and not authorised as against the persons interested in the mortgage; and a lease granted under that section--

(a) shall be deemed to be authorised as against the persons interested in any mortgage on the landlord's interest (however created or arising), and

(b) shall be binding on those persons.

(2) A lease granted under section 56 shall not, by virtue of subsection (1) above, be binding on the persons interested in any such mortgage if the existing lease--

(a) is granted after the commencement of this Chapter, and

(b) being granted subsequent to the creation of the mortgage, would not, apart from that subsection, be binding on the persons interested in the mortgage.

(3) Where--

(a) a lease is granted under section 56, and

(b) any person having a mortgage on the landlord's interest is thereby entitled to possession of the documents of title relating to that interest,

the landlord shall, within one month of the execution of the lease, deliver to that person a counterpart of it duly executed by the tenant.

(4) Where the existing lease is, immediately before its surrender on the grant of a lease under section 56, subject to any mortgage, the new lease shall take effect subject to the mortgage in substitution for the existing lease; and the terms of the mortgage, as set out in the instrument creating or evidencing it, shall accordingly apply in relation to the new lease in like manner as they applied in relation to the existing lease.

(5) Where--

(a) a lease granted under section 56 takes effect subject to any such subsisting mortgage on the existing lease, and

(b) at the time of execution of the new lease the person having the mortgage is thereby entitled to possession of the documents of title relating to the existing lease,

he shall be similarly entitled to possession of the documents of title relating to the new lease; and the tenant shall deliver the new lease to him within one month of the date on which the lease is received from Her Majesty's Land Registry following its registration.

(6) Where--

(a) the landlord fails to deliver a counterpart of the new lease in accordance with subsection (3), or

(b) the tenant fails to deliver the new lease in accordance with subsection (5),

the instrument creating or evidencing the mortgage in question shall apply as if the obligation to deliver a counterpart or (as the case may be) deliver the lease were included in the terms of the mortgage as set out in that instrument.

(7) A landlord granting a lease under section 56 shall be bound to take such steps as may be necessary to secure that the lease is not liable in accordance with subsection (2) to be defeated by persons interested in a mortgage on his interest; but a landlord is not obliged, in order to grant a lease for the purposes of that section, to acquire a better title than he has or could require to be vested in him.

59 Further renewal, but no security of tenure, after grant of new lease

(1) The right to acquire a new lease under this Chapter may be exercised in relation to a lease of a flat despite the fact that the lease is itself a lease granted under section 56; and the provisions of this Chapter shall, with any necessary modifications, apply for the purposes of or in connection with any claim to exercise that right in relation to a lease so granted as they apply for the purposes of or in connection with any claim to exercise that right in relation to a lease which has not been so granted.

(2) Where a lease has been granted under section 56--

(a) none of the statutory provisions relating to security of tenure for tenants shall apply to the lease;

(b) after the term date of the lease none of the following provisions, namely--

(i) section 1 of the [1954 c. 56.] Landlord and Tenant Act 1954 or Schedule 10 to the [1989 c. 42.] Local Government and Housing Act 1989 (which make provision for security of tenure on the ending of long residential tenancies), or

(ii) Part II of that Act of 1954 (business tenancies),

shall apply to any sub-lease directly or indirectly derived out of the lease; and

(i) Part VII of the [1977 c. 42.] Rent Act 1977 (security of tenure for protected tenancies etc.) or any enactment applying or extending that Part of that Act,

(ii) the [1976 c. 80.] Rent (Agriculture) Act 1976, or

(iii) Part I of the [1988 c. 50.] Housing Act 1988 (assured tenancies etc.).

(3) Where a lease has been granted under section 56, no long lease created immediately or derivatively by way of sub-demise under the lease shall confer on the sub-tenant, as against the tenant's landlord, any right under this Chapter to acquire a new lease (and for this purpose "long lease" shall be construed in accordance with section 7).

(4) Any person who--

(a) grants a sub-lease to which subsection (2)(b) and (c) will apply, or

(b) negotiates with a view to the grant of such a sub-lease by him or by a person for whom he is acting as agent,

shall inform the other party that the sub-lease is to be derived out of a lease granted under section 56, unless either he knows that the other party is aware of it or he himself is unaware of it.

(5) Where any lease contains a statement to the effect that it is a lease granted under section 56, the statement shall be conclusive for the purposes of subsections (2) to (4) in favour of any person who is not a party to the lease, unless the statement appears from the lease to be untrue.

Costs incurred in connection with new lease

60 Costs incurred in connection with new lease to be paid by tenant

(1) Where a notice is given under section 42, then (subject to the provisions of this section) the tenant by whom it is given shall be liable, to the extent that they have been incurred by any relevant person in pursuance of the notice, for the reasonable costs of and incidental to any of the following matters, namely--

(a) any investigation reasonably undertaken of the tenant's right to a new lease;

(b) any valuation of the tenant's flat obtained for the purpose of fixing the premium or any other amount payable by virtue of Schedule 13 in connection with the grant of a new lease under section 56;

but this subsection shall not apply to any costs if on a sale made voluntarily a stipulation that they were to be borne by the purchaser would be void.

(2) For the purposes of subsection (1) any costs incurred by a relevant person in respect of professional services rendered by any person shall only be regarded as reasonable if and to the extent that costs in respect of such services might reasonably be expected to have been incurred by him if the circumstances had been such that he was personally liable for all such costs.

(3) Where by virtue of any provision of this Chapter the tenant's notice ceases to have effect, or is deemed to have been withdrawn, at any time, then (subject to subsection (4)) the tenant's liability under this section for costs incurred by any person shall be a liability for costs incurred by him down to that time.

(4) A tenant shall not be liable for any costs under this section if the tenant's notice ceases to have effect by virtue of section 47(1) or 55(2).

(5) A tenant shall not be liable under this section for any costs which a party to any proceedings under this Chapter before a leasehold valuation tribunal incurs in connection with the proceedings.

(6) In this section "relevant person", in relation to a claim by a tenant under this Chapter, means the landlord for the purposes of this Chapter, any other landlord (as defined by section 40(4)) or any third party to the tenant's lease.

Landlord's right to terminate new lease

61 Landlord's right to terminate new lease on grounds of redevelopment

(1) Where a lease of a flat ("the new lease") has been granted under section 56 but the court is satisfied, on an application made by the landlord--

(a) that for the purposes of redevelopment the landlord intends--

(i) to demolish or reconstruct, or

(ii) to carry out substantial works of construction on,

the whole or a substantial part of any premises in which the flat is contained, and

(b) that he could not reasonably do so without obtaining possession of the flat,

the court shall by order declare that the landlord is entitled as against the tenant to obtain possession of the flat and the tenant is entitled to be paid compensation by the landlord for the loss of the flat.

(2) An application for an order under this section may be made--

(a) at any time during the period of 12 months ending with the term date of the lease in relation to which the right to acquire a new lease was exercised; and

(b) at any time during the period of five years ending with the term date of the new lease.

(3) Where the new lease is not the first lease to be granted under section 56 in respect of a flat, subsection (2) shall apply as if paragraph (b) included a reference to the term date of any previous lease granted under that section in respect of the flat, but paragraph (a) shall be taken to be referring to the term date of the lease in relation to which the right to acquire a new lease was first exercised.

(4) Where an order is made under this section, the new lease shall determine, and compensation shall become payable, in accordance with Schedule 14 to this Act; and the provisions of that Schedule shall have effect as regards the measure of compensation payable by virtue of any such order and the effects of any such order where there are sub-leases, and as regards other matters relating to orders and applications under this section.

(5) Except in subsection (1)(a) or (b), any reference in this section to the flat held by the tenant under the new lease includes any premises let with the flat under that lease.

Supplemental

62 Interpretation of Chapter II

(1) In this Chapter--

"the existing lease", in relation to a claim by a tenant under this Chapter, means the lease in relation to which the claim is made;
"the landlord", in relation to such a claim, has the meaning given by section 40(1);
"mortgage" includes a charge or lien;
"qualifying tenant" shall be construed in accordance with section 39(3);
"the relevant date" (unless the context otherwise requires) has the meaning given by section 39(8);
"the tenant's notice" means the notice given under section 42;
"the terms of acquisition" shall be construed in accordance with section 48(7);
"third party", in relation to a lease, means any person who is a party to the lease apart from the tenant under the lease and his immediate landlord.

(2) Subject to subsection (3), references in this Chapter to a flat, in relation to a claim by a tenant under this Chapter, include any garage, outhouse, garden, yard and appurtenances belonging to, or usually enjoyed with, the flat and let to the tenant with the flat on the relevant date (or, in a case where an application is made under section 50(1), on the date of the making of the application).

(3) Subsection (2) does not apply--

(a) to any reference to a flat in section 47 or 55(1); or

(b) to any reference to a flat (not falling within paragraph (a) above) which occurs in the context of a reference to any premises containing the flat.

(4) In the application of section 8 for the purposes of this Chapter (in accordance with section 39(3)) references to a flat shall be construed in accordance with subsection (2) above, instead of in accordance with subsection (7) of section 8.

Chapter III Enfranchisement under Leasehold Reform Act 1967

Extension of right to enfranchise

63 Extension of right to enfranchise to houses whose value or rent exceeds applicable limit

After section 1 of the [1967 c. 88.] Leasehold Reform Act 1967 there shall be inserted--

" 1A Right to enfranchisement only in case of houses whose value or rent exceeds limit under s.1 or 4

(1) Where subsection (1) of section 1 above would apply in the case of the tenant of a house but for the fact that the applicable financial limit specified in subsection (1)(a)(i) or (ii) or (as the case may be) subsection (5) or (6) of that section is exceeded, this Part of this Act shall have effect to confer on the tenant the same right to acquire the freehold of the house and premises as would be conferred by subsection (1) of that section if that limit were not exceeded.

(2) Where a tenancy of any property is not a tenancy at a low rent in accordance with section 4(1) below but is a tenancy falling within section 4A(1) below, the tenancy shall nevertheless be treated as a tenancy at a low rent for the purposes of this Part of this Act so far as it has effect for conferring on any person a right to acquire the freehold of a house and premises. "

64 Tenancies terminable after death or marriage

(1) The following section shall be inserted in the Leasehold Reform Act 1967 after the section 1A inserted by section 63 above--

" 1B Right to enfranchise-ment only in case of certain tenancies terminable after death or marriage

Where a tenancy granted so as to become terminable by notice after a death or marriage--

(a) is (apart from this section) a long tenancy in accordance with section 3(1) below, but

(b) was granted before 18th April 1980 or in pursuance of a contract entered into before that date,

then (notwithstanding section 3(1)) the tenancy shall be a long tenancy for the purposes of this Part of this Act only so far as this Part has effect for conferring on any person a right to acquire the freehold of a house and premises. "

(2) In section 3(1) of that Act (meaning of "long tenancy")--

(a) after "and includes" there shall be inserted "both a tenancy taking effect under section 149(6) of the Law of Property Act 1925 (leases terminable after a death or marriage) and"; and

(b) in the proviso (which prevents certain categories of tenancies terminable after death or marriage being long tenancies), for the words from "if either" onwards there shall be substituted " if--

(a) the notice is capable of being given at any time after the death or marriage of the tenant;

(b) the length of the notice is not more than three months; and

(i) its assignment otherwise than by virtue of section 92 of the Housing Act 1985 (assignments by way of exchange), and

(ii) the sub-letting of the whole of the premises comprised in it. "

65 Additional "low rent" test

After section 4 of the [1967 c. 88.] Leasehold Reform Act 1967 there shall be inserted--

" 4A Alternative rent limits for purposes of section 1A(2)

(1) For the purposes of section 1A(2) above a tenancy of any property falls within this subsection if either no rent was payable under it in respect of the property during the initial year or the aggregate amount of rent so payable during that year did not exceed the following amount, namely--

(a) where the tenancy was entered into before 1st April 1963, two-thirds of the letting value of the property (on the same terms) on the date of the commencement of the tenancy;

(b) where--

(i) the tenancy was entered into either on or after 1st April 1963 but before 1st April 1990, or on or after 1st April 1990 in pursuance of a contract made before that date, and

(ii) the property had a rateable value at the date of the commencement of the tenancy or else at any time before 1st April 1990,

two-thirds of the rateable value of the property on the relevant date; or

(2) For the purposes of subsection (1) above--

(a) "the initial year", in relation to any tenancy, means the period of one year beginning with the date of the commencement of the tenancy;

(b) "the relevant date" means the date of the commencement of the tenancy or, if the property did not have a rateable value on that date, the date on which it first had a rateable value; and

and it is hereby declared that in subsection (1) above the reference to the letting value of any property is to be construed in like manner as the reference in similar terms which appears in the proviso to section 4(1) above.

(3) Section 1(7) above applies to any amount referred to in subsection (1)(c) above as it applies to the amount referred to in subsection (1)(a)(ii) of that section. "

66 Price payable by tenant on enfranchisement by virtue of section 63 or 64

(1) In section 9 of the [1967 c. 88.] Leasehold Reform Act 1967 (purchase price and costs of enfranchisement, etc.), after subsection (1B) there shall be inserted--

" (1C) Notwithstanding subsection (1) above, the price payable for a house and premises where the right to acquire the freehold arises by virtue of any one or more of the provisions of sections 1A and 1B above shall be determined in accordance with subsection (1A) above; but in any such case--

(a) if in determining the price so payable there falls to be taken into account any marriage value arising by virtue of the coalescence of the freehold and leasehold interests, the share of the marriage value to which the tenant is to be regarded as being entitled shall not exceed one-half of it; and

(b) section 9A below has effect for determining whether any additional amount is payable by way of compensation under that section;

and in a case where the provision (or one of the provisions) by virtue of which the right to acquire the freehold arises is section 1A(1) above, subsection (1A) above shall apply with the omission of the assumption set out in paragraph (b) of that subsection. "

(2) Section 9 of that Act, as amended by this section and with the omission of repealed provisions, is set out in Schedule 15 to this Act.

(3) After section 9 of that Act there shall be inserted--

" 9A Compensation payable in cases where right to enfranchisement arises by virtue of section 1A or 1B

(1) If, in a case where the right to acquire the freehold of a house and premises arises by virtue of any one or more of the provisions of sections 1A and 1B above, the landlord will suffer any loss or damage to which this section applies, there shall be payable to him such amount as is reasonable to compensate him for that loss or damage.

(2) This section applies to--

(a) any diminution in value of any interest of the landlord in other property resulting from the acquisition of his interest in the house and premises; and

(b) any other loss or damage which results therefrom to the extent that it is referable to his ownership of any interest in other property.

(3) Without prejudice to the generality of paragraph (b) of subsection (2) above, the kinds of loss falling within that paragraph include loss of development value in relation to the house and premises to the extent that it is referable as mentioned in that paragraph.

(4) In subsection (3) above "development value", in relation to the house and premises, means any increase in the value of the landlord's interest in the house and premises which is attributable to the possibility of demolishing, reconstructing, or carrying out substantial works of construction on, the whole or a substantial part of the house and premises.

(5) In relation to any case falling within subsection (1) above--

(a) any reference (however expressed)--

(i) in section 8 or 9(3) or (5) above, or

(ii) in any of the following provisions of this Act,

to the price payable under section 9 above shall be construed as including a reference to any amount payable to the landlord under this section; and

(b) for the purpose of determining any such separate price as is mentioned in paragraph 7(1)(b) of Schedule 1 to this Act, this section shall accordingly apply (with any necessary modifications) to each of the superior interests in question. "

Exceptions to right to enfranchise

67 Exclusion of right to enfranchise in case of houses let by charitable housing trusts

(1) Section 1 of the [1967 c. 88.] Leasehold Reform Act 1967 (tenants entitled to enfranchisement or extension) shall be amended as follows.

(2) In subsection (3) (excepted cases) there shall be added at the end-- " or, in the case of any right to which subsection (3A) below applies, at any time when the tenant's immediate landlord is a charitable housing trust and the house forms part of the housing accommodation provided by the trust in the pursuit of its charitable purposes. "

(3) After subsection (3) there shall be inserted--

" (3A) For the purposes of subsection (3) above this subsection applies as follows--

(a) where the tenancy was created after the commencement of Chapter III of Part I of the Leasehold Reform, Housing and Urban Development Act 1993, this subsection applies to any right to acquire the freehold of the house and premises; but

(b) where the tenancy was created before that commencement, this subsection applies only to any such right exercisable by virtue of any one or more of the provisions of sections 1A and 1B below;

and in that subsection "charitable housing trust" means a housing trust within the meaning of the Housing Act 1985 which is a charity within the meaning of the Charities Act 1993. "

68 Exclusion of right in case of property transferred for public benefit etc

After section 32 of the [1967 c. 88.] Leasehold Reform Act 1967 there shall be inserted--

" 32A Property transferred for public benefit etc

(1) A notice of a person's desire to have the freehold of a house and premises under this Part shall be of no effect if at the relevant time the whole or any part of the house and premises is qualifying property and either--

(a) the tenancy was created after the commencement of Chapter III of Part I of the Leasehold Reform, Housing and Urban Development Act 1993; or

(b) (where the tenancy was created before that commencement) the tenant would not be entitled to have the freehold if either or both of sections 1A and 1B above were not in force.

(2) For the purposes of this section the whole or any part of the house and premises is qualifying property if--

(a) it has been designated under section 31(1)(b), (c) or (d) of the Inheritance Tax Act 1984 (designation and undertakings relating to conditionally exempt transfers), whether with or without any other property, and no chargeable event has subsequently occurred with respect to it; or

(b) an application to the Board for it to be so designated is pending; or

(c) it is the property of a body not established or conducted for profit and a direction has been given in relation to it under section 26 of that Act (gifts for public benefit), whether with or without any other property; or

(d) an application to the Board for a direction to be so given in relation to it is pending.

(3) For the purposes of subsection (2) above an application is pending as from the time when it is made to the Board until such time as it is either granted or refused by the Board or withdrawn by the applicant; and for this purpose an application shall not be regarded as made unless and until the applicant has submitted to the Board all such information in support of the application as is required by the Board.

(4) A notice of a person's desire to have the freehold of a house and premises under this Part shall cease to have effect if--

(a) before completion of the conveyance in pursuance of the tenant's notice, the whole or any part of the house and premises becomes qualifying property; and

(b) the condition set out in subsection (1)(a) or (as the case may be) subsection (1)(b) above is satisfied.

(5) Where a tenant's notice ceases to have effect by virtue of subsection (4) above--

(a) section 9(4) above shall not apply to require the tenant to make any payment to the landlord in respect of costs incurred by reason of the notice; and

(b) the person who applied or is applying for designation or a direction shall be liable to the tenant for all reasonable costs incurred by the tenant in connection with his claim to acquire the freehold of the house and premises.

(6) Where it is claimed that subsection (1) or (4) above applies in relation to a tenant's notice, the person making the claim shall, at the time of making it, furnish the tenant with evidence in support of it; and if he fails to do so he shall be liable for any costs which are reasonably incurred by the tenant in consequence of the failure.

(7) In subsection (2) above--

(a) paragraphs (a) and (b) apply to designation under section 34(1)(a), (b) or (c) of the Finance Act 1975 or section 77(1)(b), (c) or (d) of the Finance Act 1976 as they apply to designation under section 31(1)(b), (c) or (d) of the Inheritance Tax Act 1984; and

(b) paragraphs (c) and (d) apply to a direction under paragraph 13 of Schedule 6 to the Finance Act 1975 as they apply to a direction under section 26 of that Act of 1984.

(8) In this section--

"the Board" means the Commissioners of Inland Revenue;
"chargeable event" means--
(a)
any event which in accordance with any provision of Chapter II of Part II of the Inheritance Tax Act 1984 (exempt transfers) is a chargeable event, including any such provision as applied by section 78(3) of that Act (conditionally exempt occasions); or
(b)
any event which would have been a chargeable event in the circumstances mentioned in section 79(3) of that Act (exemption from ten-yearly charge). "

Chapter IV Estate management schemes in connection with enfranchisement

69 Estate management schemes

(1) For the purposes of this Chapter an estate management scheme is a scheme which (subject to sections 71 and 73) is approved by a leasehold valuation tribunal under section 70 for an area occupied directly or indirectly under leases held from one landlord (apart from property occupied by him or his licensees or for the time being unoccupied) and which is designed to secure that in the event of tenants--

(a) acquiring the landlord's interest in their house and premises ("the house") under Part I of the [1967 c. 88.] Leasehold Reform Act 1967 by virtue of any one or more of the provisions of sections 1A and 1B of that Act (as inserted by sections 63 and 64 above), or

(b) acquiring the landlord's interest in any premises ("the premises") in accordance with Chapter I of this Part of this Act,

the landlord will--

(i) retain powers of management in respect of the house or premises, and

(ii) have rights against the house or premises in respect of the benefits arising from the exercise elsewhere of his powers of management.

(2) An estate management scheme may make different provision for different parts of the area of the scheme, and shall include provision for terminating or varying all or any of the provisions of the scheme, or excluding part of the area, if a change of circumstances makes it appropriate, or for enabling it to be done by or with the approval of a leasehold valuation tribunal.

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