Freehold Purchase Changing Price

evans1967

There are four of us who are trying to purchase the Freehold. The non resident owner initially offered it by email for £25k which was accepted by our representative, one of the four leaseholders 

The Freehold owner then once offer was accepted changes the price to £60k issues letter to 75% of freehold owners not mentioning the £60k and other such mistakes under the Right of First Refusal legislation.

Can we take the Freehold owner to a tribunal for changing the original price?

dinosaur66

yes you can

in fact it reads as if this is the route you will all have to take

unfortuanatley this route needs solicitors and more money but freeholder is playing games with you all and leving you all with no choice but to force a price.

eddddy

evans1967 said:

There are four of us who are trying to purchase the Freehold. The non resident owner initially offered it by email for £25k which was accepted by our representative, one of the four leaseholders 

Unfortunately, an informal offer made by email isn't binding on either party. It's assumed to be 'subject to contract'.

It's like when when a buyer makes an offer to buy a house or flat, which is accepted by the seller. Nothing is binding until contracts are exchanged.

evans1967 said:

The Freehold owner then once offer was accepted changes the price to £60k issues letter to 75% of freehold owners not mentioning the £60k and other such mistakes under the Right of First Refusal legislation.

So I guess you mean...

• The freeholder increased the price from £25k to £60k - which the freeholder is free to do

• The freeholder served a section 5 notice to 3 out of 4 leaseholders offering the right of first refusal. - The law says that the freeholder is allowed to serve notice on 'all but one' of the leaseholders - so 3 out of 4 leaseholders is OK.

But you say the section 5 notice had mistakes in it....

evans1967 said:

Can we take the Freehold owner to a tribunal for changing the original price?

No.

Assuming I've understood the situation correctly (as described above), you cannot take the the freeholder to tribunal for changing the price.

If the section 5 notices contained mistakes that made them invalid, the freeholder might be liable to criminal prosecution and a fine - but the freeholder cannot be forced to sell the freehold to anyone for £25k.

evans1967

Ok thanks for that.

One of the notices should have been to myself as I have the RTM Company in charge of the building....
and it wasn't. So the issue now is wasting time negotiating with a nutjob...

If I offered something for sale then just before purchase I doubled the price then no negotiation could ever realistically occur....unless we were in a war like situation and the product could have an immediate impact on life....

Albermarle

evans1967 said:

Ok thanks for that.

One of the notices should have been to myself as I have the RTM Company in charge of the building....
and it wasn't. So the issue now is wasting time negotiating with a nutjob...

If I offered something for sale then just before purchase I doubled the price then no negotiation could ever realistically occur....unless we were in a war like situation and the product could have an immediate impact on life....

Negotiation is always possible.
First step is to reject the increased price out of hand and say you can only agree to the original offer.
If you want to play real hardball, you can say that on reflection even £25K seems high.

Maybe at some point he might realise if he does not make an offer at least close to £25K, then he will end up with nothing. That might focus his mind.

eddddy

evans1967 said:

One of the notices should have been to myself as I have the RTM Company in charge of the building....
and it wasn't. So the issue now is wasting time negotiating with a nutjob...

Yes - the RTM company should have received a notice.

Often, a freeholder serves a section 5 notice when they have an offer for the freehold - so in this case an offer of £60k.

The idea of a section 5 notice is that it gives the leaseholders the right to 'jump in' and buy it for £60k. (Hence the phrase "right of first refusal" and/or "right of pre-emption".)

But as you suggest, it's possible that the freeholder is bluffing and hasn't really got an offer of £60k.

Have you had the freehold valued? Do you know if £60k is cheap or expensive for the freehold?

(How long are the leases of each flat? How much is the ground rent for each flat?)

ThisIsWeird

evans1967 said:

There are four of us who are trying to purchase the Freehold. The non resident owner initially offered it by email for £25k which was accepted by our representative, one of the four leaseholders 

The Freehold owner then once offer was accepted changes the price to £60k issues letter to 75% of freehold owners not mentioning the £60k and other such mistakes under the Right of First Refusal legislation.

Can we take the Freehold owner to a tribunal for changing the original price?

Evans, that's galling to be sure.
But, moving forwards, I think you should try and remove emotive thoughts like 'nutjob' and 'product with an impact on life'.
This is purely a financial transaction, and cool heads are needed. 
It may even be, for example, that the initial £25k offer was stupid-cheap, but you failed to mention the fellow was a 'generous eccentric' instead. It may even be that £60k is still on the generous side - we don't know.
I have no experience in this, but it seems the starting point would be to get a ballpark valuation; no idea if this sort of thing is any use;
https://www.bradysolicitors.com/leasehold-collective-enfranchisement-calculator/?
Based on such things, and what the other LHers are happy to offer, you begin negotiations.