Landlord and Tenant Act 1987—tenants' right of first refusal
Landlord and Tenant Act 1987—tenants' right of first refusal

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

  • Landlord and Tenant Act 1987—tenants' right of first refusal
  • Who is the landlord?
  • Exempt and resident landlords
  • Who are the qualifying tenants?
  • What is a building?
  • What is a relevant disposal?
  • Common pitfalls
  • Tenant's rights against a buyer
  • Protection for the buyer

The Landlord and Tenant Act 1987 (LTA 1987), Part I gives qualifying tenants of flats a right of first refusal enabling them to purchase the interest of their landlord if and when the landlord proposes to dispose of it. The right is framed in negative terms, prohibiting the landlord from making a relevant disposal without first serving a notice under LTA 1987, s 5 (commonly referred to as a ‘s 5 notice’) on the qualifying tenants and requiring that the disposal is made in accordance with the statutory requirements. Those statutory requirements are designed to ensure that the landlord, having established that the tenants do not wish to exercise their rights on the terms specified, cannot sell elsewhere on more favourable terms.

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, Part 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. If the landlord is a corporate body and the