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Right to First Refusal

The Landlord and Tenant Act 1987 dictates that a landlord cannot sell or dispose of his freehold interest without first offering it to the tenants on the same terms.

Most tenants will qualify to accept the offer provided that they are not tenants on short term tenancies.

The landlord is to serve a notice on the tenants informing of the proposed sale, whether the sale is by contract or by auction and the date by which the leaseholders must respond giving them at least two months to respond. At least half of the tenants must take part to qualify. The remainder of the procedure differs depending on whether the sale is by contract or by auction. If by contract the price will be included in the landlord’s notice, if by auction the tenants can take the freehold for the price of the successful bid at auction. The landlord can withdraw the offer at anytime but withdrawal will prohibit the landlord from selling the property without serving a further notice and starting the process again.

Should the landlord dispose of the freehold title without giving the tenants the right to first refusal the tenants can demand information of the disposal and demand the freehold title is transferred to them.

The tenants can collectively purchase the landlord’s freehold title at any time by virtue of the Leasehold Reform Housing and Urban Development act 1993. For further information see our page on Collective Enfranchisement page or download the guide Collective Rights of Leaseholders

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