Lottery millionaires tempted to cash-in on Right To Buy (RTB) scheme The underlying aim of the RTB scheme introduced in the 1980's was to give Council Tenants the opportunity to buy the properties that they were living in and hence lead independent lives, free from council control. Over the last 20 years, thousands of tenants have exercised their rights and have bought their council properties. Most have done so fuelled by the desire to progress and invest in their futures and to lead new independent lives. However, there are others who are seeing the RTB scheme more as commercially viable opportunity to make a 'quick profit' by buying their homes at a discounted cost and thereafter selling it privately at a marketable higher price. In fact, such is the opportunity for profiteering that many financial companies are now offering council tenants financial incentives to exercise their RTB and thereafter sell the property to them at an agreed mutually beneficial price.
This is not to say however that most tenants, or even a large percentage of tenants, have this in mind when they exercise their RTB. Most of those who have done so have remained in their homes for many years after, only selling at a time when they have decided to move home. However, like all systems, the commercial profits to be gained can be open to abuse as was illustrated by a court case that came to light earlier this year, where a couple, who tried to buy their council house at a discount after becoming lottery millionaires, were evicted from their property.
Catherine Richards and Kleanthis Demetriou had sought to buy the 3-bedroom property, now worth £250,000, for a mere £40,000 through the RTB scheme offered to council tenants. Miss Richards had lived in the property for 10 years and was therefore entitled to a 50% discount on the house, which was then valued (for RTB purposes) at £80,000. However, Islington Council believed they were ineligible for this right as they had moved out of the property after their lottery win, therefore breaching the tenancy agreement.
According to the council, the couple who had won £1.7 million on the lottery had bought another property nearby after their win in December 1995, although they denied having ever moved into it. Two years later, in August 1997, the council began legal action to regain possession of the council house, however a counter claim by the couple to force a sale led to a long legal dispute, though the claim was later dismissed by the judge who awarded the council a possession order for the property.
As spokesman for the council said "the property must been your principal home in order for you to be eligible for the scheme". Whilst the couple claimed that they were still living there, there was a lot of evidence to the contrary with the council claiming that the couple would occasionally return to the house simply to turn on the lights and to leave rubbish, as apparent evidence that they were still dwelling there.
Judge Reynolds who awarded the council a possession order concluded that "Miss Richards had kept her interest in the house not as her home or with the intention of returning there, but for the sole purpose of being able to purchase it at a substantial discount and make a profit out of the transaction at the public expense". He added that the case was a warning to "selfish, greedy fraudsters".
Indeed, the ruling does serve as a warning to those who breach their agreements, however, as many people have already found out, there is great potential for financial gain by those who choose to exercise their RTB. The scheme is offered as a 'right' to those eligible and therefore the substantial benefits should not be ignored. The RTB scheme today remains a proposition worth very serious consideration.
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