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Recent Association of London Government research highlights again the damage done to estate regeneration projects by tenants exercising their right to buy, whether before or after transfer. If a regeneration project involves new build, tenants will have to be decanted from their soon-to-be-demolished homes into temporary accommodation. If a tenant exercises their right to buy, they become a leaseholder so have to be bought out, either by agreement or by compulsory purchase. If this is done by compulsory purchase order, they do not have to repay the discount and they get an extra 10% of the market value of their home.

Some leaseholders know that they can delay the building programme by sitting tight and waiting for their compulsory purchase order, forcing the council or registered social landlord's business plan into the red and leading to them paying a king's ransom. Word of this tactic spreads and a right-to-buy queue forms. Enter the middlemen, cruising the estate, urging, facilitating and often funding tenants to buy their homes in return for a fee or a slice of the action.

Is there a legal solution to this? What happens is a race to push two sets of proceedings through court. The tenant puts in the right-to-buy claim, the landlord delays the process because the tenant's circumstances may change and it may not yet have planning permission for the scheme. However, the tenant is serious about using the right to buy, so applies for a court order to force the landlord to sell. The landlord starts possession proceedings, and the race is on.

Under ground 10/10(a) of the 1985 Housing Act, the council has to provide "suitable alternative accommodation" for the tenant while their home is rebuilt. Where the landlord is the transferee registered social landlord, the equivalent ground, ground 6 of the 1988 Housing Act, is a mandatory ground for possession but is not available to a landlord who acquired the property "for money or monies worth" since the grant of the tenancy.

The general view is that "monies worth" would include development obligations and nomination rights, although whether those in fact amount to payment in kind, rather than what the transferring council requires to satisfy its housing authority duties is at least debatable. Ground 6 is, however, mandatory and has no suitable alternative accommodation provision. This means the courts would be likely, even if not faced with a Human Rights Act argument, to lean in favour of the tenant, who will be losing a home as well as the right to buy it.

We all know the usual difficulties as to what is suitable alternative accommodation – but could that include the loss of the windfall on the right to buy? Probably not – case law suggests that the courts would be more ready to protect the right to enjoy ownership, rather than the right to turn a quick buck.

A recent court decision allowed a south-east London council to get its ground 10(a) possession hearing before the secure tenant's application to require the council to stop delaying the right-to-buy process. That decision simply means that the council won the race to get its claim heard first – whether the court will go further and in a no-tenancy-breach situation actually order possession and frustrate the right to buy, we shall see shortly.

When a tenant exercises the right to buy with the intent to sell there is an argument that they are in fact ‘trading’ and should be taxed on the profit they make

The ALG research suggests that where the right-to-buy applicant is buying to sell, the right-to-buy application – to oversimplify the argument – is not genuine as the purpose of legislation is to buy to occupy, not to sell on, so the application is invalid.

That argument seems stronger where the buying tenant is being funded by a middleman, because the tenant is not applying for their own exclusive benefit – but while leasehold enfranchisement legislation has enabled lessees on high-value private estates to buy to sell on, it could seem one law for the rich, which brings me on to tax.

When a tenant exercises the right to buy with the intent to sell there is an argument that they are in fact "trading" and should be taxed on the profit they make, instead of the profit being exempt as a disposal. There will still be some profit, but not as much as the tenant thought.

The middlemen provide financial advice, leaflet estates and sometimes put up the purchase money. They could be in breach of financial services regulations, the agreements tenants sign with them may be in breach of unfair contract terms legislation and it may be possible to challenge the profits they declare for tax.

If the problem is as serious as the LGA research shows, then it needs a coordinated approach from the Office of the Deputy Prime Minister, the Financial Services Authority, trading standards offices and the untouchables at the Inland Revenue.