Q&As

‘A’ owns the freehold and a 999-year leasehold interest in a mixed-use block where more than 50% of which consists of residential apartments let on long leases (the Block). A also owns the 999-year leasehold interest in a neighbouring car park block (the Car Park Block). The residential tenants of the Block all have separate leases of a car park space in the Car Park Block. There are no separate rights in the residential leases to use the car park. A wants to dispose of its interests in the Block and the Car Park Block. Should the Car Park Block be disposed of in the same transaction as the Block and accordingly under the same section 5 offer notice or must the Car Park Block be disposed of as a separate transaction?

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Published on LexisPSL on 13/08/2019

The following Property Disputes Q&A provides comprehensive and up to date legal information covering:

  • ‘A’ owns the freehold and a 999-year leasehold interest in a mixed-use block where more than 50% of which consists of residential apartments let on long leases (the Block). A also owns the 999-year leasehold interest in a neighbouring car park block (the Car Park Block). The residential tenants of the Block all have separate leases of a car park space in the Car Park Block. There are no separate rights in the residential leases to use the car park. A wants to dispose of its interests in the Block and the Car Park Block. Should the Car Park Block be disposed of in the same transaction as the Block and accordingly under the same section 5 offer notice or must the Car Park Block be disposed of as a separate transaction?

Part I of the Landlord and Tenant Act 1987 (LTA 1987) gives qualifying tenants of flats a right of first refusal enabling them to purchase the interest of their landlord if and when they propose to dispose of it. The right is framed in negative terms, prohibiting the landlord from making a relevant disposal without first serving a notice on the qualifying tenants and requiring that the disposal is made in accordance with the statutory requirements.

The right of first refusal applies where premises:

  1. consist of the whole or part of a building

  2. contain two or more flats held by qualifying tenants, and

  3. the number of flats held by qualifying tenants exceeds 50% of the total number of flats contained in the premises

If these conditions are met, the landlord is bound to follow the procedures set out in LTA 1987, Pt I. Failure to do so (without reasonable excuse) is an offence punishable on summary conviction by a fine not exceeding level 5 on the standard scale.

LTA 1987 applies to mixed-use property as well as to premises used solely for residential purposes. Mixed-use premises are subject to LTA 1987 unless the internal floor area of the non-residential parts taken together exceeds 50% of the internal floor area of the premises

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