Apply to buy: a 10 step guide
Step 1: Applying to buy
Start by asking your landlord for the Right to Buy claim form (Form RTB1). Your landlord must give you one for free if you ask. The RTB1 form can also be downloaded from the Directgov site (be wary of other people offering you forms, especially if they ask you to pay them for them).
Fill the form in carefully. It is used to decide:
- whether you have the Right to Buy; and
- how much discount you will get.
When you have filled in the form, return it to your landlord.
Because the form is an important legal document, it is a good idea to use recorded delivery or to deliver it by hand and get a receipt, otherwise you may be unable to prove that your landlord has received the form.
You should keep a copy of the completed form for yourself.
Step 2: Your landlord’s Response Notice
Having received your claim form, your landlord must send you a notice (Form RTB2) telling you whether or not you have the Right to Buy.
You should get this within 4 weeks of the date on which your landlord received your RTB1 form (or within 8 weeks if you have been a tenant of your landlord for less than 5 years).
If your landlord says that you don’t have the Right to Buy your home, they must explain why. If you don’t agree with their explanation, you can get advice from the Government's Right to Buy Agent Service here.
Step 3: Your landlord’s Section 125 Notice
If your landlord has agreed to sell your home to you, they must send you a separate offer notice (known as the Section 125 Notice) which tells you the price you have to pay and the terms and conditions of the sale.
They must send this within a further 8 weeks after you have received your RTB2 form if your home is a house and you are buying a freehold, or within 12 weeks if your home is a flat or maisonette.
If you are buying a house on leasehold terms, the time limit is also 12 weeks.
The Section 125 Notice is an important document and you should read it very carefully. It will tell you five main things:
- It will describe the property which you have the Right to Buy.
- It will tell you the price the landlord thinks you should pay for it. To calculate this, your landlord must first work out how much your home was worth at the date on which you submitted your application form, and then take off your discount. If you have made improvements, these are not allowed to put the price up. If your discount is reduced by the cash limit or the cost floor, the notice must say so.
- It will give estimates of the service charges or improvement costs you will have to pay during the first 5 years after you buy your home, if it is a flat or maisonette.
- It will describe any structural defects that the landlord knows about.
- It will contain the terms and conditions that your landlord thinks should be attached to the sale. These may be set out either in the form of a draft of the legal document for you to sign, or as part of the notice, or on a separate sheet.
Step 4: Appealing to the District Valuer
When you receive your Section 125 notice, you may feel that what your landlord thinks is the full market value of your home is too high.
If so, you have a right to obtain an independent valuation from the District Valuer.
Before doing so, you have to tell the landlord, within 3 months of receiving the Section 125 notice, that you want a ‘determination of value’ under Section 128 of the Housing Act 1985.
You then have 4 weeks to put your case to the District Valuer. they will also need to inspect your home.
The District Valuers valuation will be the one that counts. Even if it is higher than the landlord’s valuation, you will still have to accept it or withdraw your application to buy your home.
Step 5: Resolving other questions about the Section 125 notice
If you want to question anything else in the Section 125 notice (the size of your discount, the effect of the cost floor, service charges, conditions of sale, your home’s boundaries etc), you should contact your landlord.
If you and your landlord disagree about something, you have the right to go to the county court for a ruling.
This can be expensive, and you should get legal advice first.
Step 6: Getting a survey
Before you finally decide to buy, you should get an independent survey from a qualified surveyor.
When you apply for a mortgage, the bank or building society will have a survey done, but this is only to value your home.
It may not uncover any structural problems that may exist.
Step 7: Getting legal advice
Before deciding whether to buy, you should get legal advice, particularly if you have worries about the terms of the sale.
If you don’t know a solicitor or a licensed conveyancer, you might ask your landlord, or your bank or building society to suggest one.
Your local reference library should also have a list of the solicitors in your area, and details about the type of work they do.
You should always ask how much it will cost before you employ a solicitor or licensed conveyancer.
Step 8: Telling your landlord what you want to do next
You will see that you have a lot of choices at this stage. The information contained in your Section 125 notice may not be straightforward and easy to understand. You will now have to decide if you want to:
- buy your home outright for the full Right to Buy price, less any discount for which you are eligible;
- forget about buying, withdraw your application, and carry on paying rent.
When you have decided, you must tell your landlord in writing. You must let him know your decision within 12 weeks of receiving your Section 125 notice.
If you have asked to have your house valued by the District Valuer, you must tell your landlord what you want to do within 12 weeks of getting that valuation.
If you do not let your landlord know what you intend to do in time, the landlord will send you a reminder.
If you do not reply within 28 days, your landlord will think you don’t want to buy, and your application will not be dealt with any further.
If for any reason you are not able to decide within the time limit what you want to do, you can ask the landlord to wait a bit longer for your reply.
If you are unable to decide for a good reason (for example, if you were in hospital and you could not return the form in time), you should tell your landlord and your time limit will then be extended automatically.
You don’t have to buy your home just because you have told your landlord you want to.
You can still change your mind. But if you do not tell your landlord what you want to do, your landlord will think you don’t want to buy, and you will have to start again.
If the value of your home has gone up in the meantime, then you will have to pay the higher price.
Step 9: Enquiring about a mortgage
If you need a mortgage, this is when you should talk to a bank or building society.
Step 10: Completing your purchase
If you are happy with your landlord’s terms for selling your home to you, and you have arranged to raise the money, you are ready to go ahead and buy.
You should tell your landlord that you are ready, and ask your solicitor for advice on the legal documents and making your payment. It may take a few months before you become the owner of your home.
You can take the time you reasonably need to get a mortgage or legal advice. You can also take your time to discuss the terms of the sale with your landlord.
You should aim to let your landlord know as soon as you are ready to go ahead and buy.
If your landlord does not hear from you for a long time, you may get a Prior warning notice. This will ask you to complete within 8 weeks of the date of the Prior Notice.
You may also get a Final Notice to complete which asks you to complete within 9 weeks of the date of the Final Warning notice or the application will be cancelled by our Legal Team.
Alternatively, write and tell your landlord that you disagree with the terms of the sale. If you don’t, your landlord may send you a second notice asking you to complete your purchase. If you then don’t complete, your application will not be taken any further.
Your landlord cannot send you a warning notice until at least 3 months after they send your Section 125 notice.
It will help things to go smoothly if, throughout the process, you or your solicitor keep the landlord informed on your circumstances, such as how you are progressing with raising the money or on any other issues that may delay the purchase.