Right to Buy

Right of First Refusal

We have a specialist team dealing with matters relating to the Landlord and Tenant Act 1987 which gives certain leaseholders a right of first refusal to buy the freehold or superior leasehold interest in their building in the event that the landlord decides to dispose of it.

The Landlord and Tenant Act 1987 (‘the 1987 Act’) gives a right of first refusal to “qualifying tenants” by prohibiting certain landlords from making certain disposals of certain premises without first offering the disposal to the “qualifying tenants” of the building.

The 1987 Act applies to premises that are the whole, or part, of a building that contains two or more flats held by qualifying tenants, and more than half of the flats in the premises are held by qualifying tenants. The 1987 Act does not apply to buildings in which greater than 50% of the internal floor area is occupied for non-residential purposes. 

The definition of “qualifying tenant” in the 1987 Act includes leaseholders and most fixed or periodic tenancies but excludes shorthold or assured tenancies, business and agricultural tenancies, and tenancies that are dependent upon employment. A tenant who owns a tenancy of three or more flats in the building is also excluded from being a “qualifying tenant”.

The 1987 Act is wide-ranging as it applies to “relevant disposals” which are disposals by the landlord of any estate or interest in the premises (including any estate or interest in the common parts).

Assuming that the qualifying criteria are met, it is essential that the requirements of the 1987 Act are strictly followed.

A landlord who does not comply with the requirements of the 1987 Act commits a criminal offence and could be subject to a fine on conviction. Purchasers should also be aware that the court can order a purchaser to transfer its interest in the land to the tenants if the 1987 Act was not complied with.

We have a wealth of experience acting for landlords and tenants in relation to right of first refusal matters including acting on behalf of large groups of leaseholders in exercising their right of first refusal.

If you have any enquiries in relation to the right of first refusal please contact enfranchisement@rfblegal.co.uk.