Leaseholders of qualifying property have the right of
first refusal to purchase the freehold of their block when the
landlord wishes to sell. Owning the freehold can offer leaseholders
the freedom to appoint managing agents, deal with lease extensions,
control the purchase of buildings insurance and maintenance
contracts.
The right of first refusal (RFR) is governed by Part 1 of the
Landlord and Tenant Act 1987 ("the Act"). Where a
landlord proposes to sell the freehold interest in a block of
flats, by law, he must first offer to sell to the leaseholders.
This is achieved by following a notice procedure set down by the
Act.
For landlords, it is a very important process. Failure to follow
the notice procedure is a criminal offence and landlords are liable
to a fine of up to £5,000. Therefore, it is important to
ensure that the correct procedure is put in place.
