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Selling the Freehold and the Right of First Refusal

More often than not, if you own a freehold and want to sell it, you will need to do so in accordance with the provisions of the Landlord and Tenant Act 1987 and the ‘Right of First Refusal’ procedures.

These state that in the majority of circumstances, you cannot sell the freehold without first offering it to the leaseholders in the block.  If you do not, this is a criminal offence!

There are two ways you can sell the freehold:

  1. By private sale (whether via an estate agent or privately)
  2. By sale at auction

Whichever option you choose, you will need to follow certain procedures.

This area of law is complex, and specialist advice should always be taken before you proceed.

What happens if I fail to comply with the procedures?

If you sell the freehold:

  1. To someone else without giving the leaseholders or flat owners the opportunity to buy it first, or
  2. You sell it to someone else on better terms than you offered it to the leaseholders

Then you commit a criminal offence which is punishable by a level 5 fine (currently £5,000).

The leaseholders also have to be notified of who the new purchaser is and the terms on which they bought the freehold.  Failure to do this is also a criminal offence punishable by a level 4 fine (currently a maximum of £2,500).

I am a leaseholder and have received a Right of First Refusal Notice. What does this mean, and what do I do?

This notice is an important legal document, and you should seek legal advice without delay as it is very time-sensitive.  The notice means that your freeholder intends to sell the freehold and, as per the law, must offer it to the leaseholders/flat owners first.

You will need to contact the other leaseholders in your block to see if they are interested in purchasing the freehold.  You will need more than 50% of you to join in; otherwise you cannot proceed.  You must respond by the deadline given in the notice, and if you fail to do so, the freeholder is able to sell the freehold to someone else.

Who do we act for?

At Biscoes, we are able to act for either the leaseholder or the freeholder, but we cannot act for both parties in the same transaction as this would be a conflict of interest.

Why choose us?

We specialise in these types of transactions, and our friendly team is able to guide you through the complex processes.

We can deal with your matter should you need to make an application to the County Court or the First-tier Tribunal.

If you are a leaseholder or a freeholder and wish to discuss any of the above, please do not hesitate to contact our Residential Property Team on 02392 660261 to discuss your situation and requirements.


For further information or to speak to one of our experts, please get in touch