Q&As

In relation to structuring a mixed use development as a variation on clean freehold investment structure: (A) Does the developer need to include the main structure of the building in the demise of the management company lease for the management company lease to operate as a buffer lease? (B) If the main structure is not included in the management company lease would the tenants’ right of first refusal still apply? (C) Can the demise of the main structure of the building be split between a management company lease (residential elements) and a long lease of the commercial element? (D) In these circumstances would the tenants’ right of first refusal and right to manage only apply to the management company lease and the part of the building included in the demise?

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Published on LexisPSL on 24/02/2016

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

  • In relation to structuring a mixed use development as a variation on clean freehold investment structure: (A) Does the developer need to include the main structure of the building in the demise of the management company lease for the management company lease to operate as a buffer lease? (B) If the main structure is not included in the management company lease would the tenants’ right of first refusal still apply? (C) Can the demise of the main structure of the building be split between a management company lease (residential elements) and a long lease of the commercial element? (D) In these circumstances would the tenants’ right of first refusal and right to manage only apply to the management company lease and the part of the building included in the demise?
  • Does the developer need to include the main structure of the building in the demise of the management company lease for the management company lease to operate as a buffer lease?
  • What is the interest to which the right applies?
  • If the main structure is not included in the management company lease would the tenants’ right of first refusal still apply?
  • Can the demise of the main structure of the building be split between a management company lease (residential elements) and a long lease of the commercial element?
  • In these circumstances would the tenants’ right of first refusal and right to manage only apply to the management company lease and the part of the building included in the demise?

In relation to structuring a mixed use development as a variation on clean freehold investment structure: (A) Does the developer need to include the main structure of the building in the demise of the management company lease for the management company lease to operate as a buffer lease? (B) If the main structure is not included in the management company lease would the tenants’ right of first refusal still apply? (C) Can the demise of the main structure of the building be split between a management company lease (residential elements) and a long lease of the commercial element? (D) In these circumstances would the tenants’ right of first refusal and right to manage only apply to the management company lease and the part of the building included in the demise?

In answering this Q&A, we assume that your main objective in putting in place some kind of buffer lease(s), is to mitigate the effects of the residential tenants’ rights under the Landlord and Tenant Act 1987 (LTA 1987) and the collective right to manage.

Does the developer need to include the main structure of the building in the demise of the management company lease for the management company lease to operate as a buffer lease?

What is the interest to which the right applies?

Part I of the Landlord and Tenant Act 1987 (LTA 1987), gives qualifying tenants

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