Sale of freehold Right of first refusal

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  • Sale of freehold Right of first refusal

    A friend who isn't on line has asked me to raise a query.
    He has a 70 year lease on a flat. There is one other flat in the building. The other leaseholder recently informed him (verbally) that he has purchased the freehold. My friend has not received a notice of any kind from the original freeholder and his only contact with him was an informal conversation some months ago about the possibility of extending his lease.
    What remedy, if any, does he have? thanks

  • #2
    1. The procedures for entitlement to RFR and 90 years statutory lease extension are in free publications which can be downloaded from www.lease-advice.org

    2. Your friend can purchase a copy of the freehold title from Land Registry Online for 4 pds by credit card . This will show when and who is the current freeholder. If the freehold was sold without any prior offer under RFR , it may be a criminal offence and you need to seek legal advice..

    Comment


    • #3
      If the freeholder owns a flat in a 2 flat split such as this and wants to sell to an external
      Party it would seem absolutely pointless serving a section 5 notice as it requires both lessees to agree to purchase. One lessee cannot meet the requirement of being more than 50%

      Secondly where there is less than 10 units the legislation deems service to be correctly done if served on all but one flat. So the freeholder does not need to serve one on the upstairs flat and provided he sent one to himself then all appears to be ok

      Thirdly if the freeholder was a resident landlord at the property and it was a conversion there may also be an exemption there to be claimed

      Comment


      • #4
        Originally posted by sgclacy View Post
        If the freeholder owns a flat in a 2 flat split such as this and wants to sell to an external
        Party it would seem absolutely pointless serving a section 5 notice as it requires both lessees to agree to purchase. One lessee cannot meet the requirement of being more than 50%

        Secondly where there is less than 10 units the legislation deems service to be correctly done if served on all but one flat. So the freeholder does not need to serve one on the upstairs flat and provided he sent one to himself then all appears to be ok

        Thirdly if the freeholder was a resident landlord at the property and it was a conversion there may also be an exemption there to be claimed
        This would appear to be an annomoly as the FH could only serve it on one LH (who perhaps he had previoulsy arranged a deal with) whilst the other LH is blissfully unaware (and has in fact been excluded from the process on purpose and not by mistake).

        Andy
        Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

        I do not accept any liability to you in relation to the advice given.

        It is always recommended you seek further advice from a solicitor or legal expert.

        Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

        Comment


        • #5
          It has already been determined, some time ago, that where there are two flats, both must be served. To allow otherwise undermines the overriding purpose of the legislation to grant the R2FR.

          Both do have the choice to exercise the right together, the legislation does not start at "only 3 flats or more" may qualify.
          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

          Comment


          • #6
            Originally posted by andydd View Post
            This would appear to be an annomoly as the FH could only serve it on one LH (who perhaps he had previoulsy arranged a deal with) whilst the other LH is blissfully unaware (and has in fact been excluded from the process on purpose and not by mistake).

            Andy
            hi Andy, Yes that is what happened. The freeholder (non resident) did a deal with the other leaseholder without approaching my friend. My interpretation of Lease-Advice is that the freeholder can ignore one leaseholder, so say four flats in building he must serve notice on three, two in building, as in this case, obliged to serve notice on only one. Can that really be true? It seems unbelievable that the "right of first refusal" can be flouted in that way

            Comment


            • #7
              Originally posted by leaseholdanswers View Post
              It has already been determined, some time ago, that where there are two flats, both must be served. To allow otherwise undermines the overriding purpose of the legislation to grant the R2FR.

              Both do have the choice to exercise the right together, the legislation does not start at "only 3 flats or more" may qualify.
              Hi, Just seen your post after I responded to Andy. Do you have any idea where I can find the decision you mention. Is it a court case or is this something the LVT deals with?

              Comment


              • #8
                It's an old decision, and is not binding. That it has not cropped up again that I can recall is that it is relatively rare that the right is offered or exercised in one ups one downs.

                The exemption is understood but it conflicts with the requirement to give notice where

                (b)they contain two or more flats held by qualifying tenants; and
                (c)the number of flats held by such tenants exceeds 50 per cent. of the total number of flats contained in the premises.

                then for
                (b)where the qualifying tenants on whom it was required to be served number less than ten, if he has served such a notice on all but one of them.]

                it would need to be "three or more".

                If there were three, then serving on two would pass muster.

                It would also preclude them forcing the new landlord to sell to them as there could be no "them" where one has bought without notice. The intention of parliament was clear.

                Frankly the cost of arguing this is another reason why it rarely comes up. It would cost more than the benefit in virtually all cases. Flats rarely have unexploited oil reserves or gold mines to fight over

                I suggest they do a deal and they jointly own it, extend their leases, and take the value out of the freehold. It's a quick profit for the other guy....
                Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                Comment


                • #9
                  Originally posted by leaseholdanswers View Post
                  It has already been determined, some time ago, that where there are two flats, both must be served. To allow otherwise undermines the overriding purpose of the legislation to grant the R2FR.

                  Both do have the choice to exercise the right together, the legislation does not start at "only 3 flats or more" may qualify.
                  I thought that might be the case, similar to RTM

                  Andy
                  Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                  I do not accept any liability to you in relation to the advice given.

                  It is always recommended you seek further advice from a solicitor or legal expert.

                  Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                  Comment

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