I am co-freeholder of a site with residential and commercial property.
My partner wishes to sell his share of the freehold.
It doesn't affect our commercial tenants but we are uncertain about our obligations to our residential lessees under Section 5 of the 87 L&T Act.
We're trying to avoid unnecessary work, delay and confusion.
Many specialist firms' websites say "The Freeholder MUST serve Right of First Refusal (RFR) notices on residential lessees"
This is contradictory to lease-advice.org which says:
We believe that although we are freeholders, - we are not "immediate" landlords of the residential tenants, so should NOT be required to offer right of 1st refusal to the flat lessees.
The details are:
The residential unit is a stand alone block of 8 flats (Wallace Court) demised on a head-lease of 125y from 24 June 1979.
A company "Wallace Court Ltd" was set up then to manage and insure the property.
Wallace Court Ltd granted 8 sub-leases to the flats for 125y less 3 days.
The 8 lessees automatically become directors of the company.
The flats pay GR to the company and the company pays GR to us
The reversion of each flat lease is to the head lessor (Wallace Court Ltd)
So as far as we can see the immediate landlord is "Wallace Court Ltd"
Does any reader have a view on our position?
My partner wishes to sell his share of the freehold.
It doesn't affect our commercial tenants but we are uncertain about our obligations to our residential lessees under Section 5 of the 87 L&T Act.
We're trying to avoid unnecessary work, delay and confusion.
Many specialist firms' websites say "The Freeholder MUST serve Right of First Refusal (RFR) notices on residential lessees"
This is contradictory to lease-advice.org which says:
- The RFR only applies when the immediate landlord of the tenants decides to sell.
- The immediate landlord is the one to whom the rent or ground rent is paid
and who will be entitled to vacant possession of the flat when the lease expires.
We believe that although we are freeholders, - we are not "immediate" landlords of the residential tenants, so should NOT be required to offer right of 1st refusal to the flat lessees.
The details are:
The residential unit is a stand alone block of 8 flats (Wallace Court) demised on a head-lease of 125y from 24 June 1979.
A company "Wallace Court Ltd" was set up then to manage and insure the property.
Wallace Court Ltd granted 8 sub-leases to the flats for 125y less 3 days.
The 8 lessees automatically become directors of the company.
The flats pay GR to the company and the company pays GR to us
The reversion of each flat lease is to the head lessor (Wallace Court Ltd)
So as far as we can see the immediate landlord is "Wallace Court Ltd"
Does any reader have a view on our position?
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