Q&As

A building consists of two flats where the freeholder has already granted a long lease of one of the flats and it is intended that on the same date: the freeholder will grant a long lease of the other flat to a second tenant, and the freeholder will gift the freehold to the two tenants (in equal shares). Does the tenants’ right of first refusal under the Landlord and Tenant Act 1987 apply to the gift of the freehold?

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Produced in partnership with Helen Galley of XXIV Old Buildings
Published on LexisPSL on 18/02/2019

The following Property Q&A Produced in partnership with Helen Galley of XXIV Old Buildings provides comprehensive and up to date legal information covering:

  • A building consists of two flats where the freeholder has already granted a long lease of one of the flats and it is intended that on the same date: the freeholder will grant a long lease of the other flat to a second tenant, and the freeholder will gift the freehold to the two tenants (in equal shares). Does the tenants’ right of first refusal under the Landlord and Tenant Act 1987 apply to the gift of the freehold?

Part I of the Landlord and Tenant Act 1987 (LTA 1987) applies to premises which consist of the whole or part of a building, which is to be assumed is the case here, which contain two or more flats held by qualifying tenants and the number of flats held by qualifying tenants exceeds 50% of the total number of flats in the premises. In this case, the building comprises two flats both of which are held or will be held on long leases and so will be held by qualifying tenants. As a result, when the second long lease is granted to the second tenant, elements 1 and 2 set out above may be satisfied.

The right of first refusal applies to a disposal affecting any premises to which LTA 1987 applies. There is little doubt that the sale of the freehold to a

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