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Step 3 Your Landlord's Section 125 Notice

If your landlord has agreed to sell your home to you, he 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. He 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 12weeks.

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.

This guide is adapted from Your Right To Buy Your Home, © Crown Copyright 2005; Amended Reprint March 2006. Posted on this site September 2008.

Buy Your Council House

If you have been a council house tenant for between 2 and five years you could qualify for the right to buy scheme. This discounted house buying scheme is aimed at longterm council tenants and gives everyone who is eligible the opportunity to become a homeowner. Once you apply for the chance to own your council property and are (hopefully) accepted, you will get sent a section 125 notice. This is an important document stating the value of your home and what discount you'll get off the Open Market Value (OMV). This will depend on your council and will be anything between £16,000 and £38,000. Mrs Z. Booth of Fleet bought her council house for £38,000 cheaper than it was worth.

As soon as you know how much you'll need to pay for your council property you can apply for a Right To Buy mortgage. Only certain mortgage companies will offer a RTB mortgage (big banks like Bank of Scotland or Barclays) so it would be prudent to go through a RTB mortgage provider who should guide you in the right direction. The whole process normally takes just a few months to complete.