Right to First Refusal

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    Right to First Refusal

    Freehold of property concerned includes two unleased flats and two long leased flats with qualifying tenants. Qualifying tenants are trying to force sale of Freehold on the grounds of Right to first refusal, with vacant possession of the two unleased flats. In our opinion they do not have more than 50% of the total flats is this the case?

    #2
    Originally posted by allewitor View Post
    Freehold of property concerned includes two unleased flats and two long leased flats with qualifying tenants. Qualifying tenants are trying to force sale of Freehold on the grounds of Right to first refusal, with vacant possession of the two unleased flats. In our opinion they do not have more than 50% of the total flats is this the case?
    There are two different procedures. LTA 1987 is reactive (ie lessees can intercept sale but only if F wants to sell) and LRHUDA 1993 is pro-active (ie lessees start ball rolling whethere or not F wants to sell).

    1987 Act: s.1(2)(c) demands that qualifying lessees' flats exceed half of total. In your case, they don't.

    1993 Act: s.3(1)(c) demands that qualifying lessees' flats be at least 2/3 of total [and a lessee who owns 3 or more does not qualify: s.5(5)]. Again, in your case they don't.

    Result: not enough lessees to force sale either way.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

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      #3
      Right to First Refusal

      Thankyou very much Jeffery just wanted to hear!

      Comment


        #4
        right to first refusal

        Having established that the qualifying tenants are not the majority, in order to validate their claim could they try to suggest that the one of the two flats included in the Freehold is classed as a separate building. I suppose I am asking if there are any restrictions on a flat that would seperate its existance from the main building even though it is included in the Freehold plan?

        Comment


          #5
          Originally posted by allewitor View Post
          Having established that the qualifying tenants are not the majority, in order to validate their claim could they try to suggest that the one of the two flats included in the Freehold is classed as a separate building. I suppose I am asking if there are any restrictions on a flat that would seperate its existance from the main building even though it is included in the Freehold plan?
          1987 Act deals with "...premises if they consist of the whole or part of a building" - s.1(2)(a).
          1993 Act similarly deals with "...premises if they consist of a self-contained building or part of a building".
          Neither Act defines "building", only "flat". However, s.3(2) of 1993 Act does explain "self-contained".
          Please explain internal layout of your flats.
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment


            #6
            Right to first refusal

            One flat has 2 beds 2 baths clck rm open plan dinning kitchen lounge and garden.
            Second flat situated over a double garage belonging to flat above, this has a living room on ground floor, a staircase to large double bedroom, bathroom, and kitchenette. As this building is annexed to the main building, but is physically connected could it be classed as a seperate building, it is identified on the Freehold Plan in a different colour to the main house because it its maintenance is the sole responsibility of the Landlord?

            Comment


              #7
              Originally posted by allewitor View Post
              One flat has 2 beds 2 baths clck rm open plan dinning kitchen lounge and garden.
              Second flat situated over a double garage belonging to flat above, this has a living room on ground floor, a staircase to large double bedroom, bathroom, and kitchenette. As this building is annexed to the main building, but is physically connected could it be classed as a seperate building, it is identified on the Freehold Plan in a different colour to the main house because it its maintenance is the sole responsibility of the Landlord?
              So could any discrete part [of whole], being vertically severable- be "redeveloped independently of the remainder of the building" - to use the wording of s.3(2)(a) - with independent services?
              If it could, that part is a self-contained part; it would then seem to be treated separately for the Act's purposes.
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

              Comment


                #8
                Right to first refusal

                You could argue that it is a seperate building and could be developed independantly of the main building, however the main electricity cables and main fuses for all four flats are situated inside this annexed flat. It also supports all the gas meters and water supply. The gas pipes to the additional 3 flats run through the garage and are then supported on the brickwork of this additional building.

                This Act is not particularly clear, nor does it make provision for the complicated structures of converted buildings and how they are sited. This Annexe flat can be severed horizontally and vertically but not independantly of the garage that could be attached to a shorthold tenancy to the other Freehold flat. I am sorry that this matter is so complicated, but does the Freehold plan not encompass all these buildings therefore give all the flats in question a legitimate status?

                The expression 'The Law is an Ass' springs to mind!

                Comment


                  #9
                  The freehold plan is significant in defining the freehold but will not assist in defining what is or is not a separable building.
                  I do not feel able to answer your question definitively- sorry.
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

                  Comment


                    #10
                    Right to first refusal

                    I understand your difficulty, could you try this one though. If the flat does not qualify as part of the original Freehold because it is seperate dwelling, what happens to it?

                    If the qualify tenants force the sale of the Freehold, technically this flat will be not be part of the original Freehold, but would become a Freehold property within a Freehold, how will that operate and how could it be conveyanced?

                    I am so confused do you think a Barrister would be able to shed more light on this subject.

                    Comment


                      #11
                      Originally posted by allewitor View Post
                      I understand your difficulty, could you try this one though. If the flat does not qualify as part of the original Freehold because it is seperate dwelling, what happens to it?

                      If the qualify tenants force the sale of the Freehold, technically this flat will be not be part of the original Freehold, but would become a Freehold property within a Freehold, how will that operate and how could it be conveyanced?

                      I am so confused do you think a Barrister would be able to shed more light on this subject.
                      In some such cases, collective enfranchisement by lessees is linked to a lease back to vendor freeholder: s.36 of 1993 Act.
                      I think it wise for you to take formal legal advice from a solicitor as to your best move.
                      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                      4. *- Contact info: click on my name (blue-highlight link).

                      Comment


                        #12
                        right to first refusal

                        Thank you Jeffrey for all your help I will endevour to sort this problem out. Does your practice specialise in property law or do you cover all aspects?

                        Comment


                          #13
                          Originally posted by allewitor View Post
                          Thank you Jeffrey for all your help I will endevour to sort this problem out. Does your practice specialise in property law or do you cover all aspects?
                          Conveyancing Research (ie non-standard aspects of conveyancing) only.
                          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                          4. *- Contact info: click on my name (blue-highlight link).

                          Comment


                            #14
                            Hi
                            I'd just like to add to this thread.

                            It matters not that the freehold plan covers the freehold parts and the flats that are leasehold. If splittable there would be created 2 freehold titles You would keep the original land reg title and the leaseholders would have a new registration number created under 'sale of part' using a TP1 form.

                            The important factor is can the structure that contains the leases be vertically severed from the part that you own? Can you visualize the premises being effectively a pair of semi-detached premises? If so they may be able to buy their part of the freehold. The provision of services is not neccessarily a barrier as they can be separated or put underground. Fortunately they don't hold the majority of space in an interlocked building or they may be able to buy you out (at full value). 65 year leases did I read? If so you'd be entitled to marriage value of between 5 and 10% of the effective would be freehold market values of the two flats.

                            Just one other thought ... Without checking I'm guessing here but I feel the statutes talk about the need for a majority of qualifying tenants/flats. Of the qualifying flats if they work together then they constitute 100% of the Qualifying flats as yours don't count if your premises are freehold. If the area of your premises is less than the area of their premises then they also hold the majority of building and qualify if you part is unseverable.
                            These are just things for you to research by looking at the statutes and at the LVT site.
                            Good luck

                            Take these points as possibles and not absolutes.

                            Comment


                              #15
                              Hi Mark

                              Having read through reams of cases concerning this matter, one particular case concerning a Mr Anthony Radevsky who professes to be an expert in this field suggested that any flat included in a Freehold is included in the count. The stipulation concerning Q Tenants is that in the case of RFR they must hold at least 51% of the total flats. In the case of Collective Enfranchisement two thirds must be qualifying and 50% must proceed with Application.

                              Although the two flats in our case do not have long Leases they are subject to Shorthold Tenancy Agreements issued by our Company which I believe would also make them elligible to be counted.

                              This issue is very complex if solicitors don't understand it how the hell is Joe Public expected to????

                              Comment

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