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Right of First Refusal

Under the Landlord and Tenant Act 1987 a Landlord must first offer to the leaseholders of a building the right to acquire the freehold for a fixed price or notify them of the Landlord’s intention to dispose of the freehold at auction.

The Landlord will notify the Leaseholders by serving a Section 5 Notice. This Notice must be responded to by a majority of the tenants by the date specified in the Notice (being at least 2 months from the date of the Notice) otherwise the Landlord can dispose of the freehold to a third party or sell at an auction without the leaseholders’ collective right to acquire the property reserved.

If you are in receipt of a Section 5 Notice it is very important to obtain legal advice as soon as possible.

For more information on fees and procedure:

Fees

Our fixed fees to:-

  • set up a company limited by shares to hold the freehold title on behalf of the leaseholders (inclusive of Share Certificates and Register of Members)
  • negotiate the Contract and Transfer
  • complete the transaction
  • register the purchase at the Land Registry

start from £600 plus VAT depending on the size of your Building. In addition official copy entries of £8 per flat will have to be paid and the Land Registry will charge £40 to update the title.

For tax purposes we would advise that all participating tenants extend their leases to 999 years immediately after completion of the freehold acquisition. As such there can be no increase in value between when the freehold is acquired and when the leases are granted and therefore there can be no chargeable gain. You should seek tax advice in this regard if you have any concerns. We would extend to 999 years, reduce ground rent to nil and carry out any modernisation required. If the leases are extended immediately, the consideration you pay for the freehold is deemed to be payment for the lease extension also. Our additional costs for the New Leases start from £550 plus VAT and disbursements depending on the size of your building.

Right of First Refusal

Under the Landlord and Tenant Act 1987 a Landlord must first offer to the leaseholders of a building the right to acquire the freehold for a fixed price or notify them of the Landlord’s intention to dispose of the freehold at auction.

The Landlord will notify the Leaseholders by serving a Section 5 Notice. This Notice must be responded to by a majority of the tenants by the date specified in the Notice (being at least 2 months from the date of the Notice) otherwise the Landlord can dispose of the freehold to a third party or sell at an auction without the leaseholders’ collective right to acquire the property reserved.

If you are in receipt of a Section 5 Notice it is very important to obtain legal advice as soon as possible.

For more information on fees and procedure:

Fees

Our fixed fees to:-

  • set up a company limited by shares to hold the freehold title on behalf of the leaseholders (inclusive of Share Certificates and Register of Members)
  • negotiate the Contract and Transfer
  • complete the transaction
  • register the purchase at the Land Registry

start from £600 plus VAT depending on the size of your Building. In addition official copy entries of £8 per flat will have to be paid and the Land Registry will charge £40 to update the title.

For tax purposes we would advise that all participating tenants extend their leases to 999 years immediately after completion of the freehold acquisition. As such there can be no increase in value between when the freehold is acquired and when the leases are granted and therefore there can be no chargeable gain. You should seek tax advice in this regard if you have any concerns. We would extend to 999 years, reduce ground rent to nil and carry out any modernisation required. If the leases are extended immediately, the consideration you pay for the freehold is deemed to be payment for the lease extension also. Our additional costs for the New Leases start from £450 plus VAT and disbursements depending on the size of your building.

Not sure which solution is right for you? Call us now for a no obligation chat on 020 7485 0888 or email us at advice@comptons.co.uk

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Legal Notice: The Lease Clinic is a trading name of Comptons Solicitors LLP. Comptons Solicitors LLP is registered at Companies House under number OC352969. Our registered office is situated at 90-92 Parkway, Regents Park, London NW1 7AN. Comptons is regulated by the Solicitors Regulation Authority. Our SRA number is 533923.2020