Tenants Right of First Refusal
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1 Tenants Right of First Refusal Third Edition Anthony Radevsky LLB Barrister, Falcon Chambers Wayne Clark LLB, BCL (Oxon) Barrister, Falcon Chambers
2 Published by LexisNexis LexisNexis Regus Terrace Floor Castlemead Lower Castle Street Bristol BS1 3AG Whilst the publishers and the author have taken every care in preparing the material included in this work, any statements made as to the legal, tax, commercial or other implications of any particular course of action or transaction are made in good faith purely for general guidance and cannot be regarded as a substitute for professional advice in the circumstances concerned. Consequently, no liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in this work. RELX (UK) Limited, trading as LexisNexis 2017 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any way or by any means, including photocopying or recording, without the written permission of the copyright holder, application for which should be addressed to the publisher. Crown Copyright material is reproduced with kind permission of the Controller of Her Majesty s Stationery Office. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. ISBN Typeset by Letterpart Limited, Caterham on the Hill, Surrey CR3 5XL Printed in Great Britain by Hobbs the Printers Limited, Totton, Hampshire SO40 3WX
3 CONTENTS Preface Table of Cases Table of Statutes Table of Statutory Instruments v xv xix xxv Chapter 1 Introduction 1 Chapter 2 Premises, Landlords and Qualifying Tenants 5 Premises 5 The whole or part of a building 5 Flats in building 8 Flat 8 Exceptions 9 (a) Mixed use buildings 9 (b) Excluded landlords 14 Landlords 16 Exceptions 17 Split reversions 18 The Crown 19 Qualifying tenants 20 Multiple tenancies 22 Sub-tenant 22 Examples 22 Requisite majority 22 Chapter 3 Relevant Disposal 25 Relevant disposal 25 Disposal 25 Estate or interest 26 Any 29 Disposal of commercial element only 31 Common parts 33 Disposal by the landlord 37 Disposal of reversion 38 Disposal by mortgagee 39
4 viii Tenants Right of First Refusal Excluded disposals 40 Grant of tenancy of flat 40 Assignment of a tenancy 42 Interest of beneficiary in settled land 43 A disposal of an incorporeal hereditament 44 A disposal by way of security for a loan 44 A disposal to a trustee in bankruptcy or to the liquidator of a company 45 Disposal to a trustee in bankruptcy 45 Disposal to a liquidator of a company 46 Disposals made in connection with matrimonial proceedings 46 Compulsory purchase 47 Collective enfranchisement 47 Code rights 48 Gifts 48 Disposal by way of gift to members of landlord s family 48 Gifts to charity 49 Disposals by charities 49 Appointment or discharge of trustee 50 Inter-family transfers 52 Disposal pursuant to contractually binding obligations 52 Contract 53 Option 53 Pre-emption 54 The exception: disposal pursuant to option or pre-emption 54 Surrender of tenancy 57 Merger 60 A disposal to the Crown 60 Disposals to associated companies 61 General exception 61 Meaning of associated company 61 Shares held in fiduciary capacity 61 Arrangements to avoid 1987 Act 62 Application of provisions of the LTA 1987 to contracts 64 Chapter 4 The Offer Notice 69 More than one building 71 Service on qualifying tenants 72 Form of notice 72 No prescribed form 72 Naming of tenants 73 Offer 73 Contract 74 Auction 75 Timing 76 Option 76 Conveyance 77
5 Contents ix Non-monetary disposal 77 Chapter 5 Consequences of Service of Offer Notice 79 Acceptance notice 79 Protected period 81 Duly nominated 82 Change of nominated person 82 Failure by tenants to give notice 82 Acceptance and nomination 85 Landlord obliged to proceed 85 Auction 86 Non-monetary disposal 87 Option or right of pre-emption 89 Covenant affecting disposal 89 Withdrawal 90 Nominated person 90 Costs of landlord 92 Landlord 92 Costs of nominated person/qualifying tenants 92 Lapse of landlord s offer 93 Chapter 6 Information Notices 95 Information: s 11A notices 95 The right to serve notice 95 Information which may be requested 96 Form of s 11A notice 96 By whom served 97 Time for service 97 Section 3A of the Landlord and Tenant Act Compliance with s 11A notice in response 101 Triggering time for service of purchase notices 101 Content of notice in response 101 Service of notice in response 102 Chapter 7 Purchase Notices 103 Section 12A 12C notices 103 Commencement of period for service of purchase notice 103 Service by majority of qualifying tenants of constituent flats 104 Consideration for relevant disposal 105 Approach to construction 105 Duty to account? 106 Section 12A notices: right of qualifying tenants to take the benefit of the contract 107 By whom must notice be served? 107 Form of s 12A notice 108
6 x Tenants Right of First Refusal Time for serving notice 109 Compliance with terms of contract 110 Completion of the contract 111 Original disposal including other property 111 Incumbrances / changes in value of property since original disposal 113 Original disposal including other buildings to which Part I of the LTA 1987 applies 114 Right of qualifying tenants to compel re-sale by purchaser: s 12B notices 115 By whom must notice be served? 115 Form of s 12B notice 116 Time for serving notice 117 Original disposal including other property 118 Charges or incumbrances since the original disposal 119 Charges 119 Incumbrances 119 Discretion of the court 120 Approach of FTT to matters to be determined under the purchase notice 120 Price where no other property 120 Price where other property 121 Additional sums 121 Other terms 122 Increase in monetary value of the property required to be disposed of in pursuance of a purchase notice 123 Change in the value of money 124 Original disposal including other buildings to which Part I of the LTA 1987 applies 125 Right of qualifying tenants to compel grant of new tenancy by a superior landlord: s 12C notices 125 Form of s 12C notice 126 Time for serving notice 126 Consideration to be paid 126 Regrant of lease 126 Where the relevant tenancy included premises other than premises to which the LTA 1987, Part I applied at the time of the disposal 128 Discharge of charges 128 Chapter 8 Subsequent Purchasers 131 LTA 1987, s 16: rights of qualifying tenants against subsequent purchaser 131 General 131 Obligation of purchaser in case of notice served under s 11A (right to information as to terms of disposal) by qualifying tenants where there has been a subsequent disposal 132
7 Contents xi What happens if the purchaser disposes of the estate or interest that was the subject matter of the original disposal after receiving notice under the LTA 1987, s 11A? 134 Notices under the LTA 1987, ss 12A, 12B or 12C 136 The estate or interest which is the subject matter of the original disposal 136 Disposal by purchaser of part of the estate or interest that was the subject matter of the original disposal 137 Chapter 9 Termination of Rights Against Purchaser or Subsequent Purchaser 139 Introduction 139 Premises affected by the original disposal ceasing to be premises to which the LTA 1987, Part I applies: s 17(1) notices 139 Withdrawal by nominated person: s 14(2) notices 141 Comparison of s 17(1) and s 14(2) notices 142 No binding contract having been entered into: s 17(3) and (4) notices 144 Subsequent purchasers and s 17(3) notices 146 Chapter 10 Avoidance and Enforcement 149 Avoidance 149 Associated company 149 Conditional agreement 150 Option 150 Collapse of trust 150 Acquisition of flats 151 Creation of intermediate lease 151 Commercial elements 151 New developments 151 Existing developments 152 Enforcement 153 Reasonable excuse 153 Other remedies 154 Notices 154 Service 155 Inaccuracies 156 Chapter 11 Procedure and Appeals 157 Proceedings 157 First-tier Tribunal 158 Constitution 160 Procedure 160 Appeals 161
8 xii Tenants Right of First Refusal Chapter 12 Prospective Purchasers: Section Form of notice 163 Effect of notice 164 Appendix I Notices under the Landlord and Tenant Act (1) Notice under section 5A 168 (2) Notice under section 5B 168 (3) Notice under section 5C 169 (4) Notice under section 5D 170 (5) Notice complying with section 5E 170 (6) Acceptance notice under section (7) Landlord s notice of withdrawal under section 8(3)(a) 171 (8) Nominated person s notice of withdrawal under section 8A(4)(a) 172 (9) Nominated persons s notice of election under section 8B 172 (10) Nominated person s notice of acceptance of contract under section 8B 172 (11) Notice of election under section 8C 173 (12) Landlord s notice under section 8E(3) 173 (13) Notice of withdrawal under section 9A(1) 174 (14) Notice of withdrawal under section 9A(2) 174 (15) Notice of withdrawal under section 9B 174 (16) Notice under section (17) Notice under section 11A 175 (18) Notice under section 12A 176 (19) Notice under section 12B 176 (20) Notice under section 12C 177 (21) Notice of withdrawal under section 14(1) 178 (22) Notice of withdrawal under section 14(2) 178 (23) Notice under section 16(2) 178 (24) Notice under section 16(3) 179 (25) Notice under section 17(1) 179 (26) Notice under section 17(3) 180 (27) Notice under section 17(4) 180 (28) Notice under section (29) Default notice under section 19(2) 182 Appendix II Statutory Materials 183 Landlord and Tenant Act Landlord and Tenant Act The Leasehold Valuation Tribunals (Procedure) (Wales) Regulations 2004 (SI 2004/681) 241 The Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 (SI 2010/2600) 255 Practice Direction Lands Chamber of the Upper Tribunal 276
9 Contents xiii Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 (SI 2013/1169) 290 Practice Directions Property Chamber, First-tier Tribunal 320 Civil Procedure Rules Practice Direction Alternative Procedure for Claims 325 Practice Direction Landlord and Tenant Claims and Miscellaneous Provisions about Land 329 Pre-contract Tenancy Enquiries (Form E2, Parts 66 76) 330 Practice Guide 27: the leasehold reform legislation 331 Index 335
Tenants Right of First Refusal
Tenants Right of First Refusal Third Edition Anthony Radevsky LLB Barrister, Falcon Chambers Wayne Clark LLB, BCL (Oxon) Barrister, Falcon Chambers Published by LexisNexis LexisNexis Regus Terrace Floor
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