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Lease of dwelling-house for use as accommodation for homeless persons
     30 .  - (1) In this regulation, "dwelling-house" has the same meaning as in Part IV of the Housing Act 1985 (secure tenancies and rights of secure tenants)[29].

    (2) The initial cost of a lease of a dwelling-house shall be nil where the term of the lease does not exceed ten years and the authority have decided, before they become the lessees under the lease, to use, or continue to use, the dwelling-house to provide accommodation in the exercise of their functions under Part VII of the Housing Act 1996 (homelessness)[30].

Lease of land for non-housing purposes
     31 .  - (1) In this regulation - 

"the demised land", in relation to a new lease, means the land demised by the new lease; and

"new lease" means a lease of non-housing land - 

(a) which is for a term not exceeding ten years;

(b) which does not confer on the lessee an option to purchase the lessor's interest in the demised land; and

(c) of which the capital cost does not exceed 70 per cent. of the relevant value of the demised land.

    (2) The initial cost of a new lease shall be nil where - 

(a) the authority have not at any time had a freehold or any leasehold interest in the whole or any part of the demised land; and

(b) no other local authority have had a leasehold interest in the demised land under a lease of which the inital cost was nil.

    (3) The initial cost of a new lease shall be nil where - 

(a) the authority had a leasehold interest in the demised land under an earlier lease acquired before 1st April 1989; and

(b) the new lease is a lease of the same land granted to the authority upon the expiry date of the earlier lease.

    (4) The initial cost of a new lease shall be nil where the authority have disposed of the freehold or a leasehold interest in any land, and - 

(a) the new lease is a lease of the whole or any part of a new building constructed on that land after the date of that disposal; or

(b) the new lease is a lease of part of a building on that land which was occupied before the disposal for the purposes of, or in connection with, the exercise of any of the authority's functions, and the capital cost of the new lease is less than 50 per cent. of the amount which would be the capital cost of a lease on identical terms of the whole building.

Consecutive leases of land for total term not exceeding ten years
     32 . The initial cost of a lease ("the new lease") of land shall be nil where - 

(a) the authority had an earlier leasehold interest ("the preceding interest") in the land, and become the lessees upon the expiry of the preceding interest;

(b) the preceding interest was a lease of which the initial cost was nil by virtue of regulation 29 or regulation 7(3) of the 1990 Regulations[31];

(c) the new lease is for a term which, added to the term of the preceding interest, produces a combined term of not more than ten years; and

(d) but for the preceding interest, the initial cost of the new lease would be nil by virtue of regulation 31.

Fire authority leases
     33 .  - (1) In this regulation - 

(a) "new fire authority" means a fire authority constituted by a combination scheme under the Fire Services Act 1947[32] made in consequence of an order under Part II of the Local Government Act 1992 (local government changes for England)[33] containing provision for giving effect to a structural change (within the meaning given to that expression in section 14 of that Act), or in consequence of the provisions of the Local Government (Wales) Act 1994[34]; and

(b) in relation to a new fire authority - 


(i) "old fire authority" means a county council which is superseded as a fire authority by the new fire authority; and

(ii) "relevant date" means the date on which the combination scheme which constitutes the new fire authority is brought into full operation.

    (2) The initial cost of a lease ("the new lease") of land shall be nil where - 

(a) the authority are a new fire authority;

(b) the old fire authority occupied the land on the day before the relevant date, and the authority become the lessees within a period of 12 months beginning on the relevant date;

(c) immediately before the date on which the authority become the lessees, another local authority have a freehold or leasehold interest in the land;

(d) the term of the new lease does not exceed ten years;

(e) the new lease does not confer on the lessee an option to purchase the lessor's interest in the land; and

(f) where the term of the new lease exceeds three years, the capital cost of the new lease does not exceed 70 per cent. of the relevant value.

    (3) The initial cost of a lease ("the new lease") of land shall be nil where - 

(a) the authority are the old fire authority in relation to a new fire authority, and become the lessees of the new fire authority within a period of 12 months beginning on the relevant date;

(b) immediately before the relevant date, the authority had a freehold or earlier leasehold interest in the land which has been transferred to the new fire authority under the provisions of the combination scheme which constituted the new fire authority;

(c) the term of the new lease does not exceed ten years;

(d) the new lease does not confer on the lessee an option to purchase the lessor's interest in the land; and

(e) where the term of the new lease exceeds three years, the capital cost of the new lease does not exceed 70 per cent. of the relevant value.

National Park authority leases
     34 .  - (1) In this regulation - 

"National Park authority" has the same meaning as in article 2 of the National Park Authorities (England) Order 1996[35];

"relevant agreement or award" means an agreement under section 76 of the Environment Act 1995 (agreements as to incidental matters)[36] or an award under subsection (3) of that section; and

"relevant council", in relation to a National Park authority, means the council which, pursuant to paragraph 8 of Schedule 17 to the Local Government Act 1972, appointed the National Park Committee for the Park for which the authority is established.

    (2) The initial cost of a lease of land shall be nil where - 

(a) the authority are a National Park authority;

(b) the relevant council occupied the land on 31st March 1997, and the authority become the lessees within a period of 12 months beginning on 1st April 1997 other than by virtue of a relevant agreement or award;

(c) immediately before the date on which the authority become the lessees, another local authority have a freehold or leasehold interest in the land;

(d) the term of the lease does not exceed ten years;

(e) the lease does not confer on the lessee an option to purchase the lessor's interest in the land; and

(f) where the term of the lease exceeds three years, the capital cost of the new lease does not exceed 70 per cent of the relevant value.

    (3) The initial cost of a lease ("the new lease") of land shall be nil where - 

(a) the authority are the relevant council in relation to a National Park authority, and become the lessees of the National Park authority within a period of 12 months beginning on 1st April 1997;

(b) on 31st March 1997 the authority had a freehold or earlier leasehold interest in the land which has vested in the National Park authority by virtue of article 15 of the National Park Authorities (England) Order 1996 or a relevant agreement or award;

(c) the term of the new lease does not exceed ten years;

(d) the new lease does not confer on the lessee an option to purchase the lessor's interest in the land; and

(e) where the term of the new lease exceeds three years, the capital cost of the new lease does not exceed 70 per cent. of the relevant value.

Other leases

Leases having an initial cost which includes consideration under earlier lease
     35 .  - (1) In this regulation - 

"dwelling-house" has the same meaning as in Part IV of the Housing Act 1985 (secure tennancies and rights of secure tenants);

"excluded tenancy" means a tenancy or licence to occupy a dwelling-house which, for the purposes of Part IV of the Housing Act 1985, was excluded from being a secure tenancy by virtue of paragraph 4 (accommodation for homeless persons)[37] or paragraph 6 (short-term arrangements) of Schedule 1 to that Act; and

"relevant lease" means any lease of land other than a lease of a dwelling-house which - 

(i) was, at any time after 31st March 1990 and before 1st April 1997, let or occupied under an excluded tenancy; or

(ii) has, at any time after 31st March 1997, been used by the authority or any other local authority to provide accommodation in the exercise of their functions under Part VII of the Housing Act 1996 (homelessness).

    (2) Subject to regulations 37 and 38, where in relation to a relevant lease of land - 

(a) the initial cost does not fall to be determined under any of regulations 28 to 34,

(b) the authority had an earlier leasehold interest ("the preceding interest") in the whole or part of the land, and

(c) the authority acquired the preceding interest on or after 1st April 1990 under a lease of which the initial cost was nil by virtue of these Regulations or the 1990 Regulations[38],

the initial cost shall be the aggregate of the capital cost of the relevant lease and the value of the consideration given by the authority in respect of the preceding interest.

Leases of other descriptions
     36 .  - (1) Subject to regulations 37 and 38, where the initial cost of a lease of land does not fall to be determined under any of regulations 28 to 35, the initial cost of the lease shall be the capital cost of the lease.

    (2) The initial cost of a lease of goods shall be the capital cost of the lease.

Leases under private finance transactions - leases not falling with regulation 28
     37 .  - (1) Where, in relation to a lease of land, the authority become the lessees under the provisions of a private finance transaction, and the initial cost of that transaction falls to be determined under regulation 41, the initial cost (if it is not nil by virtue of any other provision of this Part) shall be lesser of - 

(a) 70 per cent. of the amount which, apart from this regulation, would be the initial cost of the lease; and

(b) the amount which, apart from this regulation, would be the initial cost of the lease minus the relevant deduction.

    (2) For the purposes of paragraph (1)(b), the relevant deduction is the amount, if any, by which amount A exceeds amount B where - 

"amount A" means the amount of the relevant deduction determined under regulation 41(5) for the private finance transaction in question; and

"amount B" means the amount which, apart from regulation 41, would be the initial cost of that transaction.

    (3) Where, in relation to a lease of land, the authority become the lessees under the provisions of a private finance transaction, and the initial cost of that transaction falls to be determined under regulation 42, the initial cost (if it is not nil by virtue of any other provision of this Part) shall be 70 per cent. of the amount which, apart from this regulation, would be the initial cost of the lease.

Reduction in the initial cost of certain leases
     38 .  - (1) For the purposes of this regulation - 

(a) a lease is a relevant lease if it is a lease of land and its initial cost falls to be determined under regulation 35, 36 or 37;

(b) "old lease" means a lease of which the initial cost fell to be determined under regulation 35, 36 or 37 or paragraph (6) or (7) of regulation 7, or regulation 7A, of the 1990 Regulations[39]; and

(c) "relevant time", in relation to an old lease, means the time when the authority's interest in the lease ceases other than by reason of the expiry of the term of the lease.

    (2) A local authority who become the lessees under a relevant lease may reduce the amount which, apart from this regulation, would be the initial cost of that lease by an amount not exceeding the balance of the released credit cover in relation to an old lease.

    (3) In paragraph (2), the balance of the released credit cover in relation to an old lease is an amount determined by the authority by - 

(a) estimating, at the relevant time and on the assumptions specified in paragraph (4), the initial cost of a new lease of the land demised by the old lease; and

(b) subtracting from that estimate any amount which the authority have already applied out of that estimate in reduction under paragraph (2) of the initial cost of a lease other than the relevant lease concerned.

    (4) The assumptions specified for the purposes of paragraph (3) are - 

(a) that the term of the new lease was equal to the term of the old lease less the expired portion of that term;

(b) that the initial cost of the new lease would fall to be determined under regulation 36;

(c) that apart from the term of the new lease, the new lease was identical to the old lease; and

(d) that the initial cost of the new lease fell to be calculated at the time when the initial cost of the old lease was calculated.

Cost at any time of certain leases
     39 . Where a local authority become the lessees under a lease of which the initial cost falls to be determined under regulation 35, 36 or 37, the cost of the lease at any time shall be the amount which would be the capital cost of the lease, if it was entered into at the time in question, on the basis of an estimate made at that time and disregarding any consideration given by the authority in respect of the lease before that time.

[30] 1996 c. 52. back

[31] See the 1990 Regulations as amended by S.I. 1995/850. back

[32] 1947 c. 41. back

[33] 1992 c. 19. back

[34] 1994 c. 19. back

[35] S.I. 1996/1243. There are amendments which are not relevant to these Regulations. back

[36] 1995 c. 25. back

[37] Paragraph 4 was substituted as from 20th January 1997 by paragraph 3 of Schedule 17 to the Housing Act 1996 (c. 52). back

[38] See regulation 7 of the 1990 Regulations. back

[39] Regulation 7A was inserted by S.I. 1996/568 and revoked by S.I. 1996/2539. back