Sectin 5 Notice

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    Sectin 5 Notice

    Hi all, I hope someone can assist.
    I have served section 5 notices on both my leaseholders for sale by private contract. The leaseholders did not respond by the stated two month date. The question I have is, can I proceed to sell the freehold by aucion (despite having served a Private sale notice) albeit on terms no less favourable than that stated in the notice.
    I have reviewed the legislation and it does seem to be suggest that I can in section 7 (3) of that act.
    I would be most grateful for any comments.

    #2
    I think it will be risky to proceed without serving the correct notice(5b) because-

    1) Your tenants could challenge the sale if they wanted on the basis of the wrong notice being served.

    2) You might realise a lower price at auction than offered to the tenants.

    3) The buyer at auction will probably check that the correct notice has been served.

    Comment


      #3
      Thank you.

      I have spoken to the agent and he has said the notices are fine as long as the reserve is not lower than thast mentioned in the Notice. What is confusing is that the Act itself states the property can be sold and the only restrictions are that it cannot be sold on any lesser terms than what was offered to the tenants.

      Therefore he is of the view we can proceed with these notices. I do not wish to waste another four months but if seems I may hav to, unless anyone else can shed any light.

      Thank you.

      Comment


        #4
        No sadly you can't.

        The reason is that after giving notice, which then expires, you cannot sell for another price ( or consideration eg the notice price plus a holiday or cash ) than that stated in the notice for 12 months.

        If you do then the leaseholders can force the sale, especially if the price is lower, and seek prosecution with a criminal penalty.

        You could only therefore sell for more.

        It is therefore a question of balance of risk as to whether they will do so.

        If the FH is owneed by a company and it is it's sole assett, then just sell the company, thats not a qualifying sale.
        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
          Thank you. To clarify from what you say, I can sell in auction as long as I sell for more and not less than the price stated in the notice. If I place in auction for a reserve of at least the price stated in the notice then I should be fine, Correct? I appreciate I run the risk of the property not selling at all but I am happy to try this. Am I right in what I say.

          I have read the Act again and (not that I am a lawyer) it does say the property can be sold with the only restriction that it cannot be sold for less than the price quoted.

          Comment


            #6
            Yes, the No was "its not that simple".

            As long as it is sold for the same or more then they have no redress.
            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
              Excellent, this has saved me another four months. Just will need to make sure it sells for more, but will have the safety of the reserve.
              Great News, thank you.

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