Section 5B of the Landlord and Tenant Act 1987 requires the freeholder to notify the qualifying tenants in the event that he plans to sell the freehold to the property at auction.
For tenants, this means that they will have to act quickly if they want to consider accepting this offer. For landlords, this is a good way of ensuring a quick disposal with a definite end date. It may also be a good way of getting a market value or above market value price, although if the tenants act properly when the property is sold in the room, the successful bidder will know that the tenants have a ‘right of first refusal to complete on the same terms as they buyer (normally within 28 days) and therefore not all interested parties may bid. If you are selling a ground rent it may be better to investigate an informal approach to those looking to buy.
In response to some recent questions, I wrote an article that appeared recently ‘Landlord and Buy to Let’ Magazine.
see:
http://www.joomag.com/magazine/landlord-buy-to-let-magazine/0540853001421676588?short
there is also some more information about this on http://www.leaseholdinfo.com
If you would like to discuss from the point of view of buying or selling a freehold, then by all means do get in contact with me to discuss.
Mark Chick
Mark Chick is a solicitor dealing with leasehold issues. This note (being very general in its nature) is not a complete statement of the law in this area. It is therefore not a substitute for legal advice from a suitably qualified professional and should not be relied upon as such. No liability can therefore be accepted for any actions based on reliance upon it.
If you require legal advice please visit www.bishopandsewell.co.uk or email leasehold@bishopandsewell.co.uk