(1)If—
(a)a house has been vacated in pursuance of a closing order or a demolition order, or purchased compulsorily under section 121 instead of the making of a closing order or a demolition order in respect of the building in which it is comprised; and
(b)any person has, within 3 months after the service of the closing order or demolition order, or of the notice of determination to purchase required by section 121(3), or after the confirmation of a compulsory purchase order, made a representation to the local authority that the house has been well maintained and that the good maintenance of the house is attributable wholly or partly to work carried out by him or at his expenses; and
(c)leaving out of account any defects in the house in respect of any such matters as are mentioned in section 86, the representation is correct;
the local authority shall make to that person in respect of that house a payment calculated in accordance with section 306.
(2)If, on receiving a representation under subsection (1), the local authority consider that the condition specified in paragraph (c) of that subsection is not satisfied, they shall serve on the person by whom the representation was made notice that no payment falls to be made to him under that subsection.
(3)For the purposes of this section, a house comprised in a building which might have been the subject of a demolition order but which has, without the making of such an order, been vacated and demolished in pursuance of an undertaking for its demolition given to the local authority shall be deemed to have been vacated in pursuance of a demolition order made and served at the date when the undertaking was given.