Common structures for leasehold mixed use developments
Common structures for leasehold mixed use developments

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Common structures for leasehold mixed use developments
  • Why is structuring a mixed use scheme important?
  • Common structures

Why is structuring a mixed use scheme important?

Mixed use developments are schemes which comprise one or more buildings used for commercial, retail and/or industrial use where there is also an element of residential accommodation. Even where the residential element is ancillary to the main commercial use, these schemes need to be treated with a certain degree of caution. Common pitfalls and challenges include:

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Residential units—flowchart (PDF version)

  1. Right to buy/right of pre-emption— residential tenants' rights of pre-emption pursuant to the Landlord and Tenant Act 1987 (LTA 1987) give qualifying long lease residential tenants the right of first refusal to purchase the immediate reversion to their leases. The landlord wishing to dispose of the reversion first has to offer it to tenants who have two months to exercise their rights. Failure to comply with the requirements of the LTA 1987 is a criminal offence. See further Practice Note: Landlord and Tenant Act 1987—tenants' right of first refusal

  2. Right to enfranchise—the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993) gives occupiers of long residential leases (more than 21 years) the collective right to buy the freehold and any intermediary leasehold interest where the residential floor areas are more than 75% of the whole development (not including common parts). In a mixed use development where there are service