Right of first refusal rules

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    Right of first refusal rules

    Question please-

    Two leasehold flats, freeholder offers right of first refusal to both leaseholders. Leaseholder A rejects the offer and leaseholder B cannot act aloneas below the required 50% to exercise right.

    The freeholder is then free to sell on the open market?

    Leaseholder A changes mind and approaches freeholder to sell to them.

    Is freeholder free to sell to whoever he wants, even leaseholder that previously rejected offer?

    #2
    Originally posted by daves59 View Post
    Is freeholder free to sell to whoever he wants, even leaseholder that previously rejected offer?
    Yes, but not at a lower price or better terms than the original offer.
    I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

    Comment


      #3
      Thanks for reply

      So as soon as one or other leaseholder rejects offer, the process ends and freeholder has complied with the act, but freeholder cannot change terms in the offer for 12 months if selling on?

      Comment


        #4
        Yes. Now make the same offer to the Freeholder yourself. That will put the Cat amongst the pigeons.
        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


          #5
          Originally posted by leaseholdanswers View Post
          Yes. Now make the same offer to the Freeholder yourself. That will put the Cat amongst the pigeons.

          Thanks but am I A or B?

          Comment


            #6
            Are you Cat or Pigeon
            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


              #7
              Originally posted by daves59 View Post
              Thanks for reply

              So as soon as one or other leaseholder rejects offer, the process ends and freeholder has complied with the act, but freeholder cannot change terms in the offer for 12 months if selling on?
              I think that the offer needs to remain open for the two months. I would have to read the legislation to be sure. I have read however that if the offer is accepted but then leaseholder support falls below the 50%+ requirement, the LL is free to sell on the same terms.

              As a matter of interest, do you also know that the LL only needs to send his notification to just one of the two leaseholders?

              If a LL fails to follow the procedure then i) the LL can be prosecuted (but apparently it never happens) ii) the requisite number of Leaseholders then have an opportunity to acquire the freehold.

              One other point that is not always appreciated. The required number of leaseholders nominate a company/person as part of the process. Both leaseholders could accept the offer and nominate one of the leaseholders to become the new LL.
              I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

              Comment


                #8
                Originally posted by leaseholdanswers View Post
                Are you Cat or Pigeon
                I guess I am a pigeon but the cat has been a very naughty boy, so no sympathy there I'm afraid

                Comment


                  #9
                  Originally posted by siva View Post
                  I think that the offer needs to remain open for the two months. I would have to read the legislation to be sure. I have read however that if the offer is accepted but then leaseholder support falls below the 50%+ requirement, the LL is free to sell on the same terms.

                  As a matter of interest, do you also know that the LL only needs to send his notification to just one of the two leaseholders?

                  If a LL fails to follow the procedure then i) the LL can be prosecuted (but apparently it never happens) ii) the requisite number of Leaseholders then have an opportunity to acquire the freehold.
                  I think most of the legislation is open to some interpretation when there are only two leaseholders.
                  If the two do not get on or cannot agree on anything, then becoming joint owners of the freehold would be pointless and disastrous and expensive.
                  In fact the other leaseholder will not be able to/or extremely unlikely to buy the freehold in any case.

                  Comment


                    #10
                    While there is a two month period in the case of 2 leaseholders once one says no the process is frustrated. the prudent landlord however takes a risk if they then sell"early" as there is always the risk of a change of tack. LLs wishing to sell "early" need documented surrender of their LH's right to first refusal
                    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


                      #11
                      Originally posted by leaseholdanswers View Post
                      While there is a two month period in the case of 2 leaseholders once one says no the process is frustrated. the prudent landlord however takes a risk if they then sell"early" as there is always the risk of a change of tack. LLs wishing to sell "early" need documented surrender of their LH's right to first refusal
                      I agree it is probably sensible to wait the full two months before proceeding, unless both leaseholders reject offer in writing.
                      Guess the pigeon will have to wait it out

                      Comment

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