Right of First Refusal - how to word it?

MNrhubarb

When we bought our property 6 years ago it was part-owned by a Housing Association. They stipulated that if we ever came to sell, they had the right of first refusal.

We are about to serve them that right of first refusal. I've checked the contract and we have to serve them written notice which they have to respond by within 6 weeks.

I've set this out in the letter along with the valuations we've had so far (although I know they may insist on their own valuer being used).

What else do we need to put in the letter? I am assuming that if we change our minds about selling, we can pull out at any time as per any property sale? I have mentioned this too, just to cover us.

I've googled for examples but most RFR relate to landlords giving notice to tenants and this does not apply to us, so any advice or pointers would be gratefully received.

davidmcn

It really depends on exactly what your contract says, I'm not sure any of us can provide detailed advice without seeing it.

MNrhubarb

1(1)The transferee hereby grants the transferor an option either to:
i)purchase the property itself or;
ii)propose a nominee to purchase the property

upon the terms set out in this clause provided that such option shall only be exercisable within 21 years from the date hereof and in the event that either:

1(1)(a)The transferee shall serve written notice upon the transferor that the transferee wishes to:
i)transfer the property or any part thereof or;
ii)grant a lease of the property or any part thereof for a term of more than 21 years otherwise than at a rack rent within twelve months of the date of service or such notice or:

1(1)(b)There shall be
i) a transfer of the freehold of the property or any part thereof or
ii) the grant of a lease of the property or any part thereof for a term of more than 21 years otherwise than at a rack rent

the exchange of contracts (or completion where there is no prior exchange of contracts) for which takes place either more than 12 months following service of the most recent notice by the transferee under Clause 1(1)(a) or without any prior written notice under Clause 1(1)(1)(b) having been served.

(it then goes on about wills and the matrimonial and family proceedings act...)

1(2)The option contained in Clause 1(1) shall be exercisable by written notice service by the transferor upon the transferee at any time within 6 weeks ofo service of the transferee's notice given as mentioned in Clause 1(1)(a) or at any time after there shall have been a transfer or lease in either of the circumstances specified in Clause 1(1)(b).

The purchase price payable by the transferor (or its nominee as applicable) shall be the open market value of the property with vacant possession assessed as at the date of the transferor's notice served in accordance with Clause 1(2) in accordance with any relevant guidance notices on the valuation of land and buildings for the time being in force of the Royal Institution of Chartered Surveyors or the Incorporated Society of Valuers and Auctioneers and whose appointment shall be agreed between the transferor (or its nominee as applicable) and the transferee or failing agreement on the application of either party by the president for the time being of the RICS and whose decision shall be final and binding on the transferor and the transferee but whose costs and expenses shall be borne by the transferor.

The transferee will transfer the property with full title guarantee.

The current Law Society standard conditions of sale shall be deemed to be incorporated herein so far as the same are applicable to a sale by private treaty and are not varied by the provisions of this Clause and in case of any variation or inconsistency the provisions of this Clause shall prevail.

1(6) Completion of the sale shall take place and vacant possession shall be given.

1(7) The provisions of section 196 of the Law of Property Act 1925 shall apply to all notices given pursuant to this clause.

1(8) If the transferor does not serve a notice within the 6 weeks period specified in clause 1(2) the transferee may transfer the property or any part thereof or grant a lease of the property or any part thereof subject to exchange of contracts for such transfer or lease taking place within 12 months of service of the transferee's notice pursuant to clause 1(1)(a) hereof provided that if no exchange of contracts is effected within such 12 month period and the transferee wishes to transfer the property or any party thereof or grant of lease of the property on the terms outlined in clause 1(1)(a) the procedure set out in this clause 1 shall be repeated.


If anyone can make sense of all that they are a finer person than I.

MNrhubarb

"The current Law Society standard conditions of sale shall be deemed to be incorporated herein so far as the same are applicable to a sale by private treaty and are not varied by the provisions of this Clause and in case of any variation or inconsistency the provisions of this Clause shall prevail." - this reassures me that even if they write back saying they wish to buy, we can still pull out of any sale as per any private sale, before the signing of contracts is complete?

TBagpuss

Just write and say "We wish to sell our home at [address] and are serving notice on you in accordance with the terms of the sale to us on [date you bought]
Pelase confirm at your easliest convenience whether you wish to excercise your right to purchase the property or propose a nominee to purchase it"

You can add "having obtained marketing advice we bekive the open market value ofthe proeprty to be £xx"

Send the letter 1st class and post it at a post office getting proof of postage.

Thrugelmir

MNrhubarb wrote: »

this reassures me that even if they write back saying they wish to buy, we can still pull out of any sale as per any private sale, before the signing of contracts is complete?

Check what your liability for costs is. If the transaction doesn't complete.

MNrhubarb

I've copied all it says, it doesn't specify who covers costs if it falls through but I've a feeling that the para about the Law Society covers it - that we'd be as liable as we would if it was a private sale.

davidmcn

MNrhubarb wrote: »

"The current Law Society standard conditions of sale shall be deemed to be incorporated herein so far as the same are applicable to a sale by private treaty and are not varied by the provisions of this Clause and in case of any variation or inconsistency the provisions of this Clause shall prevail." - this reassures me that even if they write back saying they wish to buy, we can still pull out of any sale as per any private sale, before the signing of contracts is complete?

Where does it say that? The contract is formed by the HA exercising their option after you serve your notice.

Given that any other buyer will want to know that you had properly served the notice, you might be best to get solicitors involved at this stage rather than c0ck things up.

MNrhubarb

"The current Law Society standard conditions of sale shall be deemed to be incorporated herein so far as the same are applicable to a sale by private treaty and are not varied by the provisions of this Clause and in case of any variation or inconsistency the provisions of this Clause shall prevail."

MNrhubarb

Actually copying out that bit of our contract has helped me to make more sense of it. From what I can gather, we give them 6 weeks notice in writing. They can nominate someone else to buy the house but they have to get back to us within 6 weeks. They have to pay open market value and this will be determined by a valuer at their expense. Once we get notice, it is valid for 12 months.

As with any other private house sale, our rights as sellers remain the same which is what the paragraph in my post above, pertains to.

So I think I get it now. I'll state all this in my letter. I'll attach the market appraisals we've had so far and both my husband and I will sign it. I don't think they can say we haven't given them proper written notice if we do that.

davidmcn

MNrhubarb wrote: »

I don't think they can say we haven't given them proper written notice if we do that.

Check what the provisions are about the correct method of serving notice i.e. section 196 of the Law of Property Act 1925.