Explanatory note
(This note is not part of the Regulations)
These Regulations further amend the Local Authorities (Capital Finance) Regulations 1990 (“the principal Regulations”).
Regulation 3 amends regulation 7 of the principal Regulations to make further provision for the initial cost of leases of dwellings let or occupied as accommodation for the homeless or temporary accommodation, and leases of land, other than dwellings, for a term, or the residue of a term, of not more than 10 years.
Regulation 4 amends regulation 14(19) of the principal Regulations which makes provision for determining the reserved part of a capital receipt derived from a disposal of land used for agricultural purposes. In the case of land which is subject to an agricultural tenancy, the amendment makes different provision about the price at which the land must be offered to the tenant under the tenancy before the disposal.
Regulation 5 amends regulation 18 of the principal Regulations to provide that capital receipts are to be treated as reduced for the purposes of section 59 of the Local Government and Housing Act 1989 where —
they are derived from a disposal of a defective dwelling, and at the time of the authority’s decision to make the disposal the authority also decided to use new land for housing purposes; and
land was in use for a qualifying purpose (as defined in regulation 18, which was substituted by S.I. 1996/568) at the time of the authority’s decision to dispose of it, rather than immediately before the disposal.
Regulation 6 amends regulation 19D of the principal Regulations which makes provision for treating a capital receipt as reduced where (among other conditions) a dwelling is exchanged for a flat acquired from the authority at an earlier date by the person acquiring the dwelling. It is no longer a condition that three lending institutions indicate that they would not be prepared to offer an advance secured by a mortgage of the lease of the flat. The authority must instead be satisfied that a person wishing to buy that lease would be unlikely to secure such an advance.
Regulation 7 amends regulation 20(3A) of the principal Regulations which provides that the reserved part of a notional capital receipt shall be nil in the case of an exchange of land by two local authorities. The amendment provides for the case where the land disposed of by one authority to another is a defective dwelling.