If your freeholder decides to sell the building, you might assume there’s nothing you can do but, in many cases, the law gives flat owners the first opportunity to buy it.
In this article, Leasehold Specialist Niki Adkins explains the right of first refusal, what it means, when it applies, and what to do if your freeholder sells the building without offering it to you first.
What is the right of first refusal?
The right of first refusal is a legal requirement on freeholders, in certain circumstances, to offer the freehold of the building to the flat owners before they sell the freehold to anyone else.
The right of first refusal also applies to a number of other scenarios, for example, where the freeholder plans to grant a lease of ‘communal parts’ of a building.
If you are not dealing with the freehold title of a building, our expert Leasehold Team can provide you with bespoke advice on other scenarios. Get in touch on 01202 499255 or by filling in the form.
Can my freeholder sell the building without telling me?
In most cases your freeholder cannot sell the building without telling you.
If there are at least two residential flats in the building, and more than 50% of those flats have long leases, in most circumstances, a freeholder is legally required to offer the freehold to the flat owners before selling it to anyone else.
What can I do if my freeholder sells the building without telling me?
If the right of first refusal applies and the freeholder fails to offer the freehold to the flat owners first, the leaseholder may have legal grounds to challenge the sale. In some cases, they can even require the new owner to sell the freehold back to them for the same price.
However, the window to act is very small. If you believe the freehold has been sold without your knowledge, you should seek specialist leasehold legal advice immediately.
Do freeholders have to offer the freehold to leaseholders first?
Yes, if there are two or more flats in the building and more than 50% of those flats have long leases, the freeholder is legally required to offer the freehold to those flat owners before selling it to anyone else.
Do I have the right of the first refusal?
Whether you have the right of first refusal depends on how many flats there are in the building and how many of those are on long leases.
What happens after receiving a right of first refusal notice?
To accept the freeholder’s offer, more than 50% of the qualifying tenants (Those with long leases must act together and agree to buy the freehold. The response must be made using a formal acceptance notice drafted in a specific legal format.
How long do I have to respond to a right of first refusal?
Once a right of first refusal notice is served, time is critical, the leaseholders will only have two months to respond.
To avoid missing the deadline we recommend that leaseholders discuss the offer as soon as possible to see how many are interested. You should then seek advice from a specialist leasehold lawyer who can prepare the acceptance notice correctly and in time.
You can get in touch with one of our leasehold specialists on 01202 499255 or by filling in the form.
Can I still buy the freehold after it’s sold?
Yes. Flat owners can force the freeholder (whether the original freeholder, or a subsequent freeholder) to sell the freehold of the building. This is subject to the building’s circumstances.
This is known as ‘collective enfranchisement’ which you can read our dedicated article on here.
You can read our previous article on collective enfranchisement here.
Specialist Lawyers for Leasehold Properties
If you have any questions following this article, please don't hesitate to get in touch with our bright Leasehold Property team.
The team have experience in all aspects of leasehold property including freehold purchase, both through Right of First Refusal and Collective Enfranchisement. We would be happy to assist you with this.
Call us on 01202 499255, or fill out the form at the top of this page, for a free initial chat.
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