Q&A section: Where there has been a failure to serve notice of the right of first refusal under the Landlord and Tenant Act 1987 which parties would have been qualifying tenants and what is the effect of the same on a subsequent transfer?

Q&A section: Where there has been a failure to serve notice of the right of first refusal under the Landlord and Tenant Act 1987 which parties would have been qualifying tenants and what is the effect of the same on a subsequent transfer?

This article is produced in partnership with Chris Bryden of 4 King’s Bench Walk.

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Case study

There was a historic disposal of a mixed use building (over 15 years ago) and section 5 notices under the Landlord and Tenant Act 1987 (LTA 1987) were not served on two residential tenants. The building is now being sold again and section 5 notices have been served. One of the long residential leaseholders acquired his interest a number of years after the previous sale. In order to challenge the historic disposal, who are the qualifying tenants for that purpose given that one of the tenants acquired his interest after the previous sale?

Also, can the existing seller of the building serve a section 18 notice under the LTA 1987 in respect of the current proposed disposal and against the previous disposal?

Tenant rights of first refusal

LTA 1987 gives the right to tenants of residential flats contained in a building to the first refusal of the acquisition of the landlord’s interest where a sale is proposed. The landlord is required to serve notices on the tenants informing them of his intention to dispose of his interest and providing time to them to consider a purchase at the offer price. The landlord cannot sell the property during that time, and breach is a criminal offence. The tenants are also able to force the new landlord to sell the property to them at the price he paid, if notice of the sale is not given to them.For the right to arise, there must be at least two flats in the building; no more than 50% of the building must be in non-residential use, and more than 50% of the flats must be held by qualifying tenants. The right does not apply to premises where the interest of the landlord is held by a resident landlord. This Q&A only covers the situation where these prerequisites apply.The right (where it exists) accrues to all qualifying tenants collectively. In order to exercise the righ

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