RFR Right of First Refusal Auction

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    RFR Right of First Refusal Auction

    If we can't fund the RFR and serve a withdrawal notice post auction, are there any costs to pay to the existing landlord/solicitor? If so, generally how much and what are the fees for?

    And with regards to the nominated person, can this be a limited company?


    If you reserve your rights and after the auction in that 4 weeks period you find you are unable to raise the funds then you notify the solicitors acting for the vendor -and there are no costs for you to pay

    The nominated person is often a limited company

    Accepting a section 5 B notice is not as easy as many think and there are 2 notification that need to be made. I would urge you to seek legal advice, it is a minefield and easy to make a mistate on what appears on the face of it to be quite straight forward process


      sgclacy 's advice is correct . There is nothing to pay if your group are unable to raise the funds to match the highest price obtained in the auction.

      Just write a letter to the auction company asking for the "leaseholders legal rights to RFR" are declared and may be taken up and this is printed in the auction company's sale catalogue.

      The RFR rules can be seen in the free guide at LEASE website : https://www.lease-advice.org/advice-...first-refusal/


        Unfortunately it is not a case of writing a letter reserving your rights, you need to serve a formal notice on the person (probably a solicitor) who served the Section 5B notice (not the auctioneer) and then it needs to be followed up by another formal notice concerning the nominated purchaser.

        I know that I am out of my depth on this particular part of the Act, but I do know for certain it is frought with problems, and you must take legal advice from a specialist in this area


          We'd already purchased a Notice of Acceptance ready to go once the company was set up and the nominated person chosen. However, we are speaking with solicitors to help with a Duchy issue and fixed charge on the freehold. We're also looking at solicitors managing the whole thing.

          What happens to the existing RMC that we currently run if we can't afford the freehold auction winning bid and a new freeholder takes over? Can they remove the current directors, hike fees, and also appoint new service providers, etc? I know we can RTM if that did happen.

          Thank you


            Is the RMC a party to the lease - ie where there three parties to this lease


              Yes on 5 of 13 leases. On the other 8 leases, the management company listed was owned by the builder who liquidated in 2012 and dissolved in 2019. But the lease eludes to "and incoming management companies" so maybe this covers the RMC that we now run?


                Is the RMC now collecting service charge from all 13 leases ? what is the annual ground rent demanded from the leaseholders ?



                  Annual Ground rent totals £6,500 for 40 units. In this, eight flats pay £151 (pre-liquidation) and five flats pay £225 (post liquidation) from the different leases.

                  Interestingly, today we've been contacted by the houses who have also received the exact same 5B notice and claim they also have RFR. This surely is not possible under law? However, I'm not that surprised as the freeholder, ground rent collector, and 5B issuing solicitor are all linked. They are probably trying to cause conflict and confusion between us.

                  We are in the process of hiring a solictior.



                    ( 1) Does your estate include 13 flats + 27 Houses = 40 leasehold units ?

                    and paying ground rent = 8 flats at £151 p.a + 5 flats at £225 p.a + 27 houses at £155 p.a = £1208 + £1125 + £4185 = £ 6518 ?

                    (2) I suggest you check the name of freeholder at Land Registry Online paying £3 by credit card and download sample copy of freehold title :

                    (a) flat paying £151 p.a ground rent (b) flat paying £225 p.a ground rent and (c) leasehold house paying £155 p.a ground rent.,

                    (3) I suggest you ask all 40 leaseholders if they can raise to contribute up to say £3500 each to "collectively buy" the freehold title ?

                    Normally this £3500 can be borrowed from the mortgage lender company and the debt is added to the mortgage loan

                    and then make an offer at 18 x £6518 = £117,324 to the current owner of the freehold title .

                    ( d) when choosing solicitor, find one with experience in L & T Act problems and RFR matters.


                      1. Yes. 13 flats and 27 houses.

                      1 x 165.73. 2 x 131.90. 2 x 289.26. 5 x 145.79. 5 x 225.63. 8 x 151.87. 17 x 150.52. Total Income: £6,638.95.

                      2. We know all of this information and have all 40 leases and all Land Registry deeds as the original freeholder liquidated in 2012. We're now dealing with the mortgagee in possession and the Duchy.

                      3. This is an auction so we cannot make an offer to the freeholder. We did previously and was ignored. You've valued it at 18 times ground rent, we're estimating a maximum of 15. We will be exercising our RFR as the flats only and self-funding. We are not involving the houses as we wish to manage them.

                      Q: As we have two blocks of flats 9 & 4 = 13. Do we submit one or two Notices of Acceptance?



                        RFR only applies to leasehold flats under the Housing Act 1993.

                        Leaseholders of houses can individually buy their own freehold title under Housing Act 1967 ? But still pay towards maintenance of communal areas.

                        Does the Land Registry show the "freeholder title of your two block of flats" under one title number as held by the "mortgagee in possession" or still under builder's name c/o mortgagee address or liquidator firm ?


                          The flats and houses are under one title since new build in 2005. The Land Registry still shows the original builder that liquidated in 2012 as the freeholder under Section B and the mortgagee in possession as the proprietor under section C probably because of the fixed charge they have over the site.


                            If RFR only applies to the flats then it's unlikely you would be able to raise sufficient funds to exercise your right to buy the whole title.
                            You might be able to take over management with an RTM after the auction as it's a separate building.


                              The reserve has been disclosed as £62,500. We've decided to challenge the 5b notice, asking the freeholder in possession to sever the flats from houses and reissue the 5b.


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