Right of first refusal

heston2014

ShahMiah wrote: »

Hi Goldfishfan

Just wondering what was the outcome. I’m in a similar situation except I’m the seller and the buyers lender and solicitor wanted the clause changed or removed or a new line added and the landlord (local housing) have refused. Would like to see if there was a solution. Best wishes

I am assuming you have the same clause in your Lease as us, did you approach the council first to 'sell' to them as per Right of First Refusal?
http://www.legislation.gov.uk/uksi/2005/1917/made

You will need to offer to sell to them first with an Offer Notice, this gives them 8 weeks to respond either to Accept or Reject. If they Reject, they must confirm this in writing and essentially, allows you to sell the property as see fit within 12 months.

What I am not sure though is if they reject, they no longer retain interest once sold if the subsequent owner chooses to sell the property whilst within the remaining 5 year clause. I would assume if a Rejection letter is issued, then this will invalidate the clause in the lease?

da_rule

The 10 year pre-emption right binds any owners of the property within that 10 year period.

If they issue a refusal notice this does not mean that the pre-emotion is waived indefinitely. It simply means that they do not want to buy it at that time, and the certificate is valid for 12 months. As the certificate is addressed to the current owner, it would also not be able to be used by a subsequent owner even if they wished to dispose of it also within the 12 months.

There are limited circumstances where the pre-emption is removed altogether. Such as, the Council issuing an acceptance notice (saying they want to purchase the property) and then not completing or in the case of compulsory purchase etc.

heston2014

After my earlier post, I subsequently sent a follow up email to my council to ask and got an immediate response surprisingly. They have confirmed that if the clause will remain until it expires indeed. So if the subsequent owner intends to sell within the next 5 years, they would also need to offer to the council first and go through the same process as per Right of First Refusal. So I guess, providing that IF and when we do go to open market that the buyer is aware of this clause if they were to sell in the future.