In this instance, reference to a qualifying tenant usually means a company or person who holds a residential flat within a building. It can sometimes extend to sub-tenants, statutory tenants and some short term or periodic tenancies. There are some excluded tenancies, for example, Assured Shorthold Tenancies and tenants who hold a tenancy of three or more flats in the same building.
Who is the landlord?
The landlord usually refers to the company or person who owns the whole building in which the flats are situated. The landlord is usually responsible for the maintenance and repair of the common parts of the building. Sometimes, there is an intermediary landlord and therefore it is necessary to consider if the right applies to them as well. Some landlords are completely exempt.
When does the Tenant’s Right of First Refusal apply?
A Tenant’s Right of First Refusal applies when a landlord proposes to sell / dispose of the whole or part of their building which contains two or more flats held by ‘qualifying tenants’. In such scenarios, the landlord must satisfy certain conditions before the building can be sold to a third party. The right does not usually apply to mixed use properties.
What is the Tenant’s Right of First Refusal?
A Tenant’s Right of First Refusal means that, if a landlord wants to sell their building, they must first offer it to all qualifying tenants.
The Procedure
The procedure is set out in the Landlord and Tenant Act 1987 (“the LTA 1987”). In summary, it is as follows:
The above is only a summary of the Tenants’ Right of First Refusal and the procedure may vary depending on the facts in each case; there are hurdles that both landlords and tenants must overcome to ensure that they meet the requirements.
If you require advice on this area of law, please feel free to give us a call on 020 7636 2100.
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