Subsection (2) applies if—
The local authority that served the notice may enter into a tenancy contract with the successful bidder in the auction (as identified in accordance with regulations under section 203).
A "tenancy contract" is a contract under which—
a short-term tenancy of the premises (including a contract under which those things are agreed subject to conditions).
A contract entered into under this section has effect as if it was entered into by the landlord of the premises instead of the local authority.
A local authority is to act under this section in its own name, but with an indication that it is acting so as to bind the landlord rather than itself.
As soon as possible after entering into a contract under this section, the local authority must provide a signed copy of it to the landlord.