Q&As

In a claim for a new lease under the Leasehold Reform, Housing and Urban Development Act 1993, terms are agreed but the transaction has not completed. The landlord has now sold the freehold interest to a third party and it appears no notices were served under section 5 of the Landlord and Tenant Act 1987. What is the position with completing the lease extension with the new landlord? By paying the premium, are we acknowledging that the new landlord was entitled to purchase? What is the position if the premium is paid to the new landlord but the freehold transaction is undone at a later date?

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Published on LexisPSL on 02/07/2020

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

  • In a claim for a new lease under the Leasehold Reform, Housing and Urban Development Act 1993, terms are agreed but the transaction has not completed. The landlord has now sold the freehold interest to a third party and it appears no notices were served under section 5 of the Landlord and Tenant Act 1987. What is the position with completing the lease extension with the new landlord? By paying the premium, are we acknowledging that the new landlord was entitled to purchase? What is the position if the premium is paid to the new landlord but the freehold transaction is undone at a later date?

Where the Landlord and Tenant Act 1987 (LTA 1987) applies, the landlord of the qualifying tenants is prohibited from making a ‘relevant disposal’ without first following the prescribed procedure, beginning with service on the tenants of a notice under LTA 1987, s 5. See Practice Note: Landlord and Tenant Act 1987—tenants' right of first refusal.

Where a relevant disposal is made in breach of LTA 1987, the disposal is not invalid and takes effect in the usual way but the tenants have various remedies (see Practice Note: Landlord and Tenant Act 1987—tenants' right of first refusal, in particular section ‘Tenant's rights against a buyer’). The landlord also commits a criminal offence: LTA 1987,

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