# The Local Government (Prescribed Expenditure) (Amendment) Regulations 1988, Part I: of Schedule 3 substitute–


“3 (1) Expenditure on the acquisition of a leasehold interest in land to which this subparagraph applies except where—
(a) it is intended at the time of acquisition that some person shall erect a building on the land for the authority; or
(b) at the time of the acquisition the authority already owns the freehold of the land or has a leasehold interest in the land the term of which is greater than the term which is being acquired; or
(c) there is in force at the time of acquisition or has been in force at any time during the five years immediately preceding the acquisition, a development agreement. In this subparagraph, “development agreement” means an agreement to which the acquiring authority is party and which requires or entitles—
(i) another person to develop all or any part of the land in question; or
(ii) that authority to acquire an interest in (or a right to use) the whole or any part of that land once specified conditions are satisfied.
(2) Subparagraph (1) applies to an interest for a period not exceeding three years, other than a second lease, unless—
(a) it is a lease which creates a tenancy to which Part II of the Landlord and Tenant Act 1954 (security for business and professional tenants) applies; or
(b) the term of the lease, when added to the length of any period before the commencement of the lease (but after 1st April 1980) for which the authority was entitled to the rents and profits of the land or during which it occupied the land, exceeds three years.
(3) Subparagraph (1) applies to a second lease if it is such a lease as is mentioned in subparagraph (4)(a) and the earlier interest was a lease acquired by the authority before 1st April 1980, the length of which does not exceed 20 years.
(4) For the purposes of this paragraph, “second lease” means a lease (or assignment) by which—
(a) an interest is granted to the authority to commence on the expiry of an earlier interest of the authority in the land in question; or
(b) an interest is granted in land the whole or part of which has been occupied by the authority, or to the rents and profits of which the authority has been entitled, at any time less than twelve months before the date on which the lease commences (or the assignment takes effect), or, if earlier, the date on which the lease is granted (or assigned).
(5) For the purposes of this paragraph the length of any interest shall be taken to be the maximum period for which any tenancy it creates can be enjoyed on the assumption that any right or option to renew it or to extend its term is exercised:
Provided that any tenancy to which Part II of the Landlord and Tenant Act 1954 applies shall be deemed to be capable of continuing for a maximum of 21 years irrespective of its length.”

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Source: https://www.legislation.gov.uk/uksi/1988/434/part/I (the official version)
Page: https://openlegislation.uk/local-government-prescribed-expenditure-amendment-regulations-1988/part-I
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.