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Joshua, Lawyer
Category: Property Law
Satisfied Customers: 29202
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I own a flat in a building with on either flat. It's a

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Hello, I own a flat in a building with on either flat. It's a conversion. My flat came with the building freehold on purchase. I'm currently selling and the leasehold owner of the other flat feels they should have the right of first refusal. It's a bit tricky as unfortunately I didn't know about this and we're a good way along a sale (of the flat and freehold) to other purchasers. I'm struggling to get a straight answer from my solicitor who is consulting a colleague at present. In the meantime I've been scouring the lease advisory website regarding this issue. There seems to be a little confusion as they state that to be eligible, more than 50% of the flats in a property must be held by qualifying tenants. Surely in this case that isn't possible as I myself hold 50%? I'd be so grateful for your advice. Thank you!
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: No
JA: Have you talked to a lawyer about this?
Customer: As stated above, my solicitor is consulting a colleague but seems to be impossible to reach!
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: No

Hello and thank you for your question. My name is ***** ***** I will be very pleased to assist you. I'm a practising lawyer in England with over 15 years’ experience. Please be aware that although I will endeavour to reply to you promptly, I am also in full time private practice and so I may not be available to respond immediately and it may also take me a few minutes to prepare a reply. The site will notify you as soon as I respond. I look forward to working with you to answer your question fully.

May I clarify please, do you refer to the owner of the other flat considering that they have a right of first refusal in respect of your leasehold flats or the freehold please?

Customer: replied 13 days ago.
They consider that they have the right of first refusal to buy the freehold of the building.

thank you. I can't see the right of first refusal applies in this case because the premises are a conversion and you are a resident landlord living in the premises. Part 1 1(1) landlord and tenant act 1987 specifically provides that "This Part also does not apply to any such premises at a time when the interest of the landlord in the premises is held by an exempt landlord or a resident landlord."

It seems to me that you can respectfully ***** ***** co-freeholder owner to that provision and suggest to him that he has no right of first refusal as a consequence of the same

Customer: replied 13 days ago.
I'm not resident. I let the property out.

on that basis, I cannot see an exemption to the requirement to comply with serving a notice under RFR if the freehold is owned other than through a nominee company. The legislation largely predates the more common approach of resident owns shares of freehold and does not contain a specific exemption in this respect but any attempt by the neighbours to acquire a share of freehold. it is for this reason that it is common practice for freehold is to be owned through limited companies or else, if not, for a declaration of trust to be put in place as between the co-owners to require that respective shares are sold with flats as the leasehold interest is sold and the co-owners cooperate in respect of such sales.

Customer: replied 13 days ago.
Thank you for the info. I have to admit that I'm still confused by the legal requirements for the premises to be subject to the RFR. The legislation states that for this to be the case, more than 50% of the flats in the premises must be held by ‘qualifying tenants’. This is the part that seems as if it would exempt this situation. There are 2 flats in the premises and surely only 1 of them (50% only) is held by qualifying tenants? Sorry to harp on! I'd just really like to understand!
Thanks so much

Perverse as it may seem, I do not see any reason why you would not also be a qualifying tenant for the purposes of RFR as whilst you are seeking to sell a share of freehold, you are also a leaseholder so you were two different hats. However, I cannot see that the neighbour can exercise a right of first refusal if there are only two flats because there is a requirement that more than 50% of the qualifying leaseholders exercise their right and accordingly, he would not hold the requisite majority to exercise the right so this becomes in effect an exercise in bureaucracy

Customer: replied 13 days ago.
Oh Joshua, thank you! That is what I took that part to mean and to have your input too is incredibly reassuring. Thank you

I'm glad the above answers all your questions. If there is anything else I can help with please reply back to me otherwise thank you very much for visiting JustAnswer and I hope we will see you again in the future.

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