Ex-Army officer loses appeal over ‘right to buy’ discount on council house

Court of Session
Court of Session

A former member of the armed forces who claimed he was entitled to a larger discount on the purchase price of his council home than he was offered under “right to buy” legislation has had his appeal refused.

Appellant Malcolm McCallum, who occupied army property as a member of the forces between 1983 and 2005, applied to purchase his rented property in 2015 from his landlord, the City of Edinburgh Council, under the now repealed “right to buy” legislation.

Mr McCallum claimed his previous occupation of army property entitled him to a higher discount than the £15,000 he was offered, but judges in the Inner House of the Court of Session upheld a decision of the Lands Tribunal and refused the appeal.

While it was accepted that the appellant met the residence requirement and that he had the right to purchase, the parties were in dispute as to the appropriate statutory discount upon the purchase price as a result of the effect of the Housing (Scotland) Act 2001 (Scottish Secure Tenancy Etc) Order 2002, taken together with section 61 of the Housing (Scotland) Act 1987.

The right to buy certain rented properties was introduced in the 1987 Act, section 62 of which contained the provisions for calculating the discount on the market price.

The discount was lowered by the Housing (Scotland) Act 2001, applicable to all relevant tenancies created after 30 September 2002, unless the tenant could take advantage of the provisions which preserved the old regime.

Mr McCallum was offered a discount of £15,000 on what was termed the “modernised” basis, and while it was not in dispute that his tenancy commenced after 2002, he claimed he was entitled to a larger discount under the “preserved” right to buy.

The Lands Tribunal had rejected Mr McCallum’s contention and he appealed to the Court of Session.

The judges Lord Drummond Young, Lady Clark of Calton and Lord Malcolm observed that section 61(1) and (2) of the 1987 Act conferred the power of purchase to the tenant of a house let under a secure tenancy were the owner was one of the specified landlords, but the Crown was not and has never been a specified landlord from whom a property can be purchased.

“The effect is that, while a soldier could not purchase his army property, his occupation of it could count towards the residence duration requirement if and when he left the army and gained a tenancy from one of the specified landlords, for example a local authority. Occupation of an army house could also be taken into account when quantifying the appropriate level of discount,” Lord Malcolm said.

The introduction of the new right to buy regime by the 2002 Order 2002 preserved rights to purchase in existence at the time (30 September 2002) in respect of a particular tenancy – a “preserved” right to buy.

However subsequent tenancies, unless they fell into certain limited exemptions, which did not apply in the present case, were subject to a longer residence requirement (five years) and lower levels of discount – a “modernised” right to buy.

In a written opinion with which the other judges agreed, Lord Malcolm said: “In practical terms, the overall result was as follows: if an applicant enjoyed a right to purchase a particular property when the new regime came into force (or a prospective right to purchase the subjects when the residence requirements were met) then, for so long as the tenancy persisted, not only would that right continue, but the discount entitlement would be unchanged. However, once any such tenancy was at an end, any new tenancy would be subject to the less generous terms.

“The difficulty for the appellant is that, until he obtained his present tenancy, he had no right, nor prospective right, to purchase any property. The tenancy of the house he wishes to buy commenced well after the implementation of the new Act. It is an SST in terms of the 2001 Act.

“The appellant claims that his earlier lengthy occupation of army property, which straddled the old and new regimes, affords him the right to purchase at the old, higher level of discount. However, in terms of the Order, that would apply only if he was seeking to purchase a property which he could have purchased under the original terms of the 1987 Act. It is such a right which is “preserved” for the future. The appellant does not fall into this category.

“The reality is that the appellant never had a right to purchase any property upon the old basis, thus there was nothing to ‘preserve’. The Crown was not subject to the right to buy legislation.

“The appellant’s occupation of army property under the Crown from 1983 until 2005 only assists in respect of the enjoyment of certain rights in respect of his entitlement to purchase and the discount terms concerning his current local authority tenancy under the new Act – it does not create a right to purchase a property on the original 1987 Act terms. It follows from all of the above that the appellant has been offered the correct entitlement by way of discount.”

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