Chapter 9 - Interpretation

93.     Section 68 defines a sub-standard house as one that fails the tolerable standard, is in a state of serious disrepair, or is in need of repair and, if nothing is done to repair it, is likely to deteriorate rapidly into a state of serious disrepair, or damage any other premises. The age, character, location and internal decorative repair are not to be taken into account. In Part 1, a house that fails the Tolerable Standard is considered as not being in a reasonable state of repair.

94.     Section 69 concerns non-residential premises. Work to implement a Housing Renewal Area action plan, a work notice or a maintenance plan can only be carried out on non-residential premises if they form part of a building containing a house and the works are required to implement an HRA action plan, bring a sub-standard house into a reasonable state of repair or secure the maintenance of a house that forms part of the same premises.

95.     Section 70 deals with the interpretation of terms in Part 1.

PART 2 - SCHEME OF ASSISTANCE FOR HOUSING PURPOSES

Provision of assistance for housing purposes

96.     Section 71 sets out the purposes for which local authorities may provide assistance for housing purposes. Subsection (3) gives examples of the forms of assistance that may be provided. Assistance may be provided on such terms as the local authority thinks fit, subject to the further provisions of Part 2 regarding grants or loans. Subsection (5) specifies the sections in this Part that do not apply when assistance is provided for the acquisition or sale of a house. The Scottish Ministers may make regulations about the procedures to be used, and the terms to be imposed, by local authorities in the provision of assistance.

97.     Section 72 requires a local authority to publish a statement of the criteria by which it decides whether to provide assistance and in what form. The statement must also set out any circumstances in which the local authority intends to cap the costs of work for which grant or loan is available, and the rate of interest or other charges on loans.

98.     Section 73 provides that a local authority must provide assistance to the owner of a house in relation to works required by a work notice, or works required to make a house suitable for a disabled person or to reinstate a house that has been so adapted. A local authority must also provide assistance to the owner of non-residential premises which are the subject of a work notice through the operation of section 69. Where works are to make the house suitable for a disabled person by the provision of standard amenities the assistance must be in the form of a grant. Standard amenities (toilet, bath or shower, wash-hand basin and sink) are defined in relation to the Tolerable Standard, and the Scottish Ministers can vary the definition by referring to different parts of the Tolerable Standard. Ministers have powers, by means of regulations, to specify what assistance is provided for disabled adaptations, beyond the requirement that assistance for adaptations to give access to standard amenities must be in the form of grant. The powers could be used to prescribe, for example, the type of assistance that should be provided in connection with particular types of adaptation or when defined criteria about the applicant's circumstances are met. In particular they could be used to prescribe circumstances when grant must be provided.

99.     Subsection (5) specifies that a local authority has carried out its duty under this section if it has invited the person to apply for a grant or loan, but they have not submitted a valid application or have failed to meet mandatory conditions.

Grants and loans

100.     Section 74 states that a person can obtain a grant or loan only if they make an application to the local authority. The application must include full details of the proposed work, including plans and specifications, the location of the work, an estimate of the cost of the work, and other information which may be required, particularly to carry out any financial assessment. If the applicant does not wish to apply for the full costs of the work, they may state the amount they are applying for. A local authority may require the applicant to provide information supporting the accuracy of the details in the application. The application will not be processed if such additional information is not provided.

101.     Section 75 gives the local authority discretion to approve or refuse an application for a grant or loan. If an application is approved, the local authority must work out the approved expense and, where application is made for a grant or subsidised loan, the applicant's contribution. The local authority may only approve an application for a grant or loan if it considers that the owners of all the land on which the work is to be carried out have given written consent to the application and to being bound by the conditions of grant or loan; the house will provide satisfactory housing accommodation for a reasonable time and meet reasonable standards of physical condition and amenities; and the work will not prevent the improvement of any other house in the same building. The local authority must not approve an application if the work has already begun, unless there were good reasons for starting the work early. A standard loan may only be given if the local authority is satisfied that the applicant would be unable to obtain a sufficient loan on reasonable and affordable terms from a legally authorised commercial lender. The local authority may require that the work is completed within a specified period, which must not be less than 12 months.

102.     Section 76 defines the approved expense in relation to the work referred to in an application for grant or loan. It is the amount that the local authority considers reasonable for the work it considers eligible for assistance, subject to any cap set out in the authority's statement of criteria. If the cost of work rises due to circumstances beyond the applicant's control, the authority may increase the approved expense. The Scottish Ministers may by order specify a maximum amount for the approved expense for a grant or loan. Local authorities may only exceed an amount so specified with the consent of Ministers. Local authorities may not limit the approved expense in the case of a grant to carry out works required to make a house suitable for a disabled person, whose only or main residence it is, or to reinstate a house that has been so adapted.

103.     Section 77 gives the Scottish Ministers power to make regulations for means-testing of grants and subsidised loans. Such regulations would set out a method for assessing an amount to be contributed by the applicant towards the approved expense. The assessment may take into account the financial circumstances of the applicant and their household or dependants, and any other criteria set by Ministers. The regulations may allow a local authority, with Ministers' consent, to reduce the applicant's contribution for different types of case.

104.     Section 78 establishes the procedure a local authority must follow if an applicant requests a review of their assessment.

105.     Section 79 deals with the amount of a grant or loan. The amount of a standard (unsubsidised) loan is the total of the approved expense. The amount of a subsidised loan is also the approved expense, but this is divided into an interest-free element and a repayment element. The amount of a grant, or of the interest-free element of a subsidised loan, is the greater amount of two options. The first is the approved expense minus the applicant's contribution, as calculated under section 77. The second, which applies in cases that the Scottish Ministers have specified in regulations, is a specified percentage of the approved expense, or a percentage set by the local authority with the consent of Ministers. A grant or loan calculated in the second way is called a "minimum percentage" grant or loan.

106.     Section 80 allows a local authority to set the terms for a standard loan or the repayment element of a subsidised loan, including provisions on interest (or other charges) and repayment. The local authority may not require repayment of the interest free element until the applicant to whom the loan is made disposes of an interest in the house by sale or otherwise, except by the grant of a standard security or a servitude or by means of a lease. An example could be on sale of the house. The local authority may require the loan and interest to be secured by a standard security over the house.

107.     Section 81 deals with notification of a local authority's decision on grant or loan applications. If the authority approves the application, it must inform the applicant of the approved expense, the applicant's contribution, the amount of the grant or loan (stating that this is a minimum percentage grant or loan, where appropriate), and the terms of the offer of loan (including interest and repayment terms) or grant. If the owner is a different person, the authority must inform the owner of the amount and terms of the loan or grant. Where a loan is offered, the notice must advise the applicant to obtain independent advice on its terms from a suitably qualified person. If the local authority refuses an application or sets the approved expense at an amount less than was applied for, it must provide the applicant with written notice of its reasons.

108.     Section 82 requires the local authority to pay a grant or loan either within one month of the date on which the local authority considers that the house is fit for occupation on completion of the relevant work, or by instalments while the work is being done, with a final instalment within one month of completion. Payment is subject to the local authority being satisfied with the standard of the work completed. No money may be paid on a secured loan before the standard security has been registered. If a grant is paid in instalments, the amount paid at any time must be in proportion with the grant percentage, for example, if the amount of grant is 75% of the approved expense, the total amount paid at any time must be no more than 75% of the cost of works completed up to that time. Where an instalment of grant or loan is paid before completion, and the work is not completed within 12 months of the date of that payment, the local authority may require repayment of the instalment and any subsequent instalments, along with interest from each date of payment. The local authority may set the rate of interest.

Grants and loans: conditions

109.     Section 83 sets conditions which must be complied with in respect of land or premises where work has been done with grant or loan assistance. The conditions apply from the date on which the local authority considers that the house is fit for occupation on completion of the relevant work. In the case of a grant, they end 10 years after that date. In the case of a subsidised loan, they end either 10 years after that date or when the repayment element of the loan and any interest or charge on it is fully repaid, whichever is later. In the case of a standard loan, the conditions cease to apply when the loan and any interest are fully repaid. The first three conditions are: a house to which the conditions apply must be used as a private dwelling (although part of it can be used for business); if it is occupied by the owner or a member of their family it must be their only or main residence; and the property must be kept in good repair. Only this last condition applies to non-residential premises which have received grant. In addition the owner must, if required to do so, certify to the local authority that the relevant conditions are being met.

110.     When a grant or loan is paid, the local authority must record a notice, in terms of section 84, in the appropriate land register, either the General Register of Sasines or the Land Register of Scotland. The notice must specify the conditions set out in section 83, the period for which they apply, and the provisions in section 86 requiring the owner to repay the relevant amount if the conditions are not met. The costs of recording the notice are to be paid by the applicant to whom the grant or loan is paid.

111.     Section 85 allows the owner (or a creditor in a standard security with a right to sell) to discharge the conditions on a house resulting from a loan or grant by paying the local authority the sum that would be due if the conditions were breached. The conditions are also discharged when a local authority demands payment following a breach of any of them. In either of these cases, the local authority must register a further notice to specify that the conditions no longer apply. The owner of the house must pay the local authority the expenses of registering the notice. If a creditor in a standard security makes a payment to discharge the conditions, the sum concerned forms part of the amount secured by the standard security.

112.     Section 86 requires that, if any of the conditions in section 83 are breached, the local authority must demand repayment from the owner of the house. However, if the authority believes that the breach can be remedied, it may allow time for this to be done. If the breach is remedied within the period set, the local authority may disregard it. If the authority considers that the breach cannot be remedied, but the owner was not responsible for it, it may disregard the breach. Either of these actions requires the consent of Ministers, who may approve conditions to apply to the suspension or disregard. The authority also has power to apply to the sheriff for an interdict to correct or forestall a breach of the conditions.

113.     Section 87 establishes how the sum to be paid to a local authority if conditions are breached is calculated. Where a grant was given, the amount is the whole grant plus interest on it. A standard loan has to be repaid in full, with the unpaid interest up to the date of repayment. Where a subsidised loan was given, the whole loan has to be repaid, plus unpaid interest on the repayment element up to the date of repayment, plus interest on the interest-free element up to that date.

Miscellaneous and supplementary

114.     Section 88 prevents a local authority from giving a further grant or subsidised loan for the same work for which a grant or subsidised loan has already been approved. It may give a standard loan for the same work, but the amount cannot exceed the approved expense minus the amount of the grant, i.e. the amount the applicant is required to pay. A local authority must not give a further grant or subsidised loan within 10 years of approving one for work on the same house, unless at least one of four conditions apply. These are that the additional work could not have been foreseen when the original application was approved; that the additional work could not have been carried out at the same time as the original work; that the additional work was not considered to be eligible for a grant or subsidised loan when the local authority approved the original application; or that the authority has invited an application for a further grant or loan under section 90.

115.     Section 89 makes it a criminal offence to give false information in an application for a grant or loan or in response to an authority's request for information to support the accuracy of an application. It is also an offence to fail to notify the authority of a change in circumstances affecting an application.

116.     Section 90 allows a local authority to invite an application for a further grant or subsidised loan, where an application for grant or loan has been made and the house requires the replacement of unsafe electrical wiring, installation of mains-powered smoke detectors or provision of adequate thermal insulation. For premises where any part is owned in common (for example, a tenement), this section also applies to the installation of a fire-resistant front door for each separate house or part of the premises, or a main door entry-phone system.

117.     Section 91 allows a local authority to make payments to a not for profit lender that provides loans to individuals for the purposes of work or the acquisition or sale of a house that is eligible for local authority assistance. This could allow the authority to contribute to the loan fund or subsidise administrative costs of a non-profit lender working across authority areas, as an alternative to making standard loans itself. The terms on which the local authority makes payments to the lender may include restrictions on the terms of loans made to individuals. Ministers may make regulations to change the definition of relevant lenders, or to control the terms of payments to them and to individuals.

Special cases

118.     Section 92 provides that there are only three situations in which a tenant is eligible for a grant or loan. The first is if the relevant work has been the responsibility of the tenant under the lease for at least two years. The second is if the work is to make the house suitable for a disabled person or to reinstate a house that has been so adapted. The third is when the work is urgently required to protect the health and safety of the occupants of the house, including repair work and the provision of fire safety measures.

119.     Section 93 modifies this Part of the Act in relation to agricultural tenants and crofters, whose tenancies include provision for compensation to be paid at the end of the tenancy for any improvements carried out by the tenant. Such a tenant is to be treated as the owner of the house for the purposes of this Part. Where compensation becomes due, under the Crofters (Scotland) Act 1993 or the Small Landholders (Scotland) Acts 1886 to 1931, during the period when conditions apply to the house resulting from a grant or loan, a deduction is made from the compensation to take account of the contribution made by the grant or loan. Provision for similar deductions from compensation was inserted in the Agricultural Holdings (Scotland) Act 1991 by the Agricultural Holdings (Scotland) Act 2003.

Supplementary

120.     Section 94 allows Ministers to give local authorities generally, or a particular authority, directions on the giving of assistance. Such directions may not relate to the provision of assistance to a particular person or in relation to particular premises. Local authorities must have regard to guidance issued by Ministers on their functions under this Part.

121.     Section 95 gives local authorities powers to improve the amenity of residential areas, for example by improving paths and waste ground. A local authority may carry out work on its own land, assist work on land not owned by it, carry out work on land with the agreement of its owner, and acquire land by agreement. There is also a power of compulsory purchase, which requires authorisation by Ministers. Assistance for such works may be on such terms and conditions as the local authority thinks fit, and is not constrained by the provisions on grants and loans for work to houses.

122.     Section 96 extends to the Scottish Ministers the powers and functions given to local authorities in relation to grants and loans in this Part.

123.     Section 97 provides the interpretation of terms used in this Part.

PART 3 - PROVISION OF INFORMATION ON SALE OF HOUSE

Duty to have or provide information about houses on the market

124.     Section 98 provides that a person who has responsibility for marketing a house that is on the market must possess prescribed documents in relation to the house. The duty to provide these documents is set out in section 99. The person marketing the house must comply with a request from a potential buyer for a copy of any or all of the prescribed documents, within a period to be set out in regulations. The duty does not apply if the person marketing the house believes that the person making the request is unlikely to have the means to buy the house, is not genuinely interested in buying the house, or is a person that the seller would not be likely to be prepared to sell the house to. This does not allow for unlawful discrimination and does not apply where the person marketing the house believes that the request is from an officer of an enforcement authority. A charge to cover the reasonable cost of making and sending a paper copy of the documents may be made. It is possible to provide electronic versions of the information, but the potential purchaser must consent in writing to this. There is no requirement on the person responsible for marketing the house to provide the documents if, between the request and the date by which the documents should have been provided, the house is sold, taken off the market, or for any other reason that person ceases to be responsible for marketing the house.

125.     Section 100 allows the person responsible for marketing the house to levy a reasonable charge under section 99 and to specify terms in writing. These could include a restriction on the further circulation of the document without the seller's permission.

126.     Section 101 applies to anyone acting for the seller of a house, where the house is not being marketed, or is on the market but that particular agent is not responsible for marketing it. The agent must nonetheless possess the prescribed documents before informing people that the house is, or may become, available for sale.

127.     Section 102 defines the circumstances where a person is to be considered as acting as an agent. Essentially this means that, in the course of a business, they act on instructions from a seller of a house.

128.     Section 103 requires the person marketing the house to ensure the authenticity of copies of documents provided or shown to a potential buyer.

Prescribed documents

129.     The information to be held and provided may be set out in regulations under section 104. Documents may be prescribed only if Ministers consider they contain information on the physical condition of the house, the value of the house, or other information that may be of interest to potential buyers. Regulations can make provisions about the form of documents, who can prepare them, and the period of validity of documents and how far in advance of putting the house on the market they may be prepared. Regulations may also include a requirement for prescribed documents to be registered and may make provisions relating to the funding and operation of any register and enforcement of the requirement to register.

Exceptions from duty

130.     Section 105 gives the Scottish Ministers the power to make regulations exempting persons from the duty to hold and provide information and defining the circumstances or timescale where this exemption may apply.

Responsibility for marketing houses

131.     Section 106 states that only a seller or an agent may be responsible (for the purposes of the Act) for marketing a house. The agent and the seller cannot have the responsibility at the same time, and where there is an agent they will be the responsible person. Where there is an agent responsible for marketing the property, the seller must take reasonable steps to inform a potential buyer that they should ask the agent for the prescribed documents. This section also makes clear that a person can market the same house on more than one occasion.

132.     The responsibility of a person acting as an agent is described in section 107. The person becomes responsible on taking steps that result in the house put on the market. They have the responsibility until the house is sold, taken off the market, they no longer act for the seller or they stop taking any action to market the house. The responsibility of a seller is set out in section 108. Where the seller does not have an agent and takes steps to put the house on the market, then they become responsible for the provision of information. This ceases when the house is sold, taken off the market or the seller stops taking any action to market the house. Actions taken on the seller's behalf by an agent are excluded.

Enforcement

133.     Section 109 states that local weights and measures authorities (which in Scotland are local authorities) have a duty to enforce this Part of the Act.

134.     The powers of officers of enforcement authorities to require documents are set out in section 110. The enforcement officer may require a person they believe has a duty to provide prescribed documents to do so, in a legible form, and they may take copies of any document. They can only require this up to six months from the last day the person appeared to the enforcement officer to have a duty. Any request by an enforcement officer for a prescribed document must be complied with within seven days of the request. A request need not be complied with if there is a reasonable excuse for not doing so.

135.     Where the enforcement officer believes that a person has breached the duty to provide information, or that the information provided was not authentic, the enforcement officer may give that person a penalty charge notice, under section 111. This must be within a period of not more than six months from when the breach was believed to have taken place. Provisions relating to penalty charges are set out in schedule 3. This states the information that must be included on the penalty charge notice, including provisions on the right to review. The penalty charge will be £500 or such other lesser amount specified by regulations and the period for paying the penalty charge will be 28 days from the service of the notice, but this may be extended by the enforcement authority. If the recipient of the charge requests a review, then the enforcement authority must consider representations and the circumstances of the case and decide whether to confirm or withdraw the notice. They must give notice of their decision to the recipient. The penalty charge must be withdrawn if the authority is satisfied that the recipient did not commit the breach of duty which resulted in the notice being served, the notice was not given within six months of the date that it appeared the duty was breached or that the notice did not comply with the other requirements of schedule 3. The enforcement authority may also withdraw the penalty charge notice if it is satisfied that the recipient is unlikely to commit a further breach of the duty specified in the notice.

136.     There is a right to appeal to the sheriff within 28 days of the enforcement authority review decision notice being served, although the sheriff can allow an appeal to be lodged after that date. The appeal must be on one of the grounds set out in paragraph 5(4) of schedule 3. The sheriff can either uphold or quash the notice. The sheriff's decision can be further appealed to the sheriff principal on a point of law.

137.     The local authority can recover the penalty charge as a debt. Proceeding to recover the penalty charge can only start after the period for payment specified in the notice, after any appeal period or 28 days after any appeal determination or the appeal is withdrawn. Certification by the enforcement authority is sufficient evidence of non-payment. If the notice is withdrawn or quashed, any payment towards the charge should be refunded.

138.     The Scottish Ministers can make regulations on the form of notices in this Part, circumstances where penalty charge notices may not be given, and methods by which penalty charges may be paid.

139.     Section 112 makes it an offence to obstruct an enforcement officer or to purport to be an enforcement officer, in relation to the powers to require documents or serve penalty notices. On summary conviction a person is liable to a fine not exceeding level 5 on the standard scale.

Duty to provide information to tenant exercising right to purchase

140.     Section 113 amends the Housing (Scotland) Act 1987 to give Ministers power to prescribe in regulations information to be supplied to tenants of local authorities and registered social landlords who request a house valuation in connection with the right to buy. This information may include estimates of costs of maintaining the house and any common parts; a statement of how long any common parts, fixtures and fittings and other items are expected to last, with estimated replacement costs; and any other matters of interest to a tenant who has served an application to purchase. Ministers may specify when prescribed information is to be provided only on the condition that the tenant pays a specified charge. The prescribed information that may be the subject of a charge does not include the valuation carried out to determine the value of the house for the purpose of determining the price to be paid.

Supplementary

141.     Section 114 gives the Scottish Ministers the power to give grants to fund development work in relation to the form, content, and terms of preparation of prescribed documents and to set conditions for the payment of grants.

142.     Section 115 establishes that the duty to provide prescribed information only applies where the house is sold with vacant possession. A house will be assumed to be available with vacant possession and the duties will apply, unless it is clear when the house is being marketed that there is not vacant possession.

143.      Section 116 addresses the situation where two or more houses in a sub-divided building are marketed as a single property. This is treated as the sale of a single house. As long as at least one of the houses is available with vacant possession, the prescribed documents must be provided.

144.     If any person acting as the agent for the seller of a house commits a breach of duty under this Part of the Act, section 117 allows the enforcement authority to notify the Office of Fair Trading and any other person or body with an interest in this breach. Where a fixed penalty notice is issued, the enforcement authority must inform the Office of Fair Trading of the penalty notice, the withdrawal of the notice and the result of any appeal against the notice.

145.     Section 118 defines possession of documents. A document is deemed to be possessed by a person if they do not have it, but can take immediate possession of the document (in the case of non-electronic documents) or in the case of electronic documents they are treated as being in possession if, using readily available equipment, the person can view and print a legible copy.

146.     Section 119 defines expressions for the purposes of this Part.