A local housing authority receiving an application for assistance under this Part shall as soon as reasonably practicable give notice in writing to the applicant stating whether in their opinion he is eligible for assistance in respect of the defective dwelling.
If they are of opinion that he is not so eligible, the notice shall state the reasons for their view.
If they are of opinion that he is so eligible, the notice shall inform him of his right to make such a claim as is mentioned in section 537(2) (claim that assistance by way of reinstatement grant is appropriate in his case).