§ Mr. Urwinasked the Secretary of State for the Environment if he will make a statement about recent proposals to offer options to council tenants to buy the houses in which they live.
§ Mr. ShoreI refer my hon. Friend to the answer which I gave on 28th July 1977 to my hon. Friend the Member for Gravesend (Mr. Ovenden).—[Vol. 936, c.616.] My answer then and the statement 689W which I am now making refer to shorter-term options, as they do to the longer-term options covered in the earlier answer.
The grant of an option fetters the ability of the local authority to deal with its property as it thinks fit during the currency of the option. It cannot be presumed that Parliament would have intended local authorities to have such a power. Express statutory wording would therefore be needed to enable a local authority to grant options.
The powers of local authorities to dispose of houses and land acquired or appropriated for the purposes of Part V of the Housing Act 1957 are contained in Sections 104 and 105. A distinction is drawn in Part V between houses and land, and prima facie it is Section 104 rather than Section 105 that confers power to dispose of houses. In both sections, however, the power is expressed as a power to "sell", and the grant of an option does not constitute a sale of the houses or buildings or the land to which the option relates.
An offer made in the course of negotiations for immediate sale, which can be withdrawn, the subject matter of which is the property offered for sale, and which is part of a transaction completed only by the sale of the property, may fairly be regarded as incidental to or consequential on the power to sell. Such an offer is, however, different from an offer made by way of the grant of an option, which is irrevocable, and which constitutes a transaction complete in itself, the subject matter of which is the option. The grant of such an option is not incidental to or consequential on the power to sell.
I am advised that it flows from the above argument that there is no power to grant such an option.
I am drawing the attention of the local authority associations to this statement.