Tenants of Flats and the Right of First Refusal

If an owner of a block of flats wants to sell its interest, then, providing that certain criteria are met, it must first offer it to the owners of the flats. There are strict criteria, though, on who is a qualifying tenant (or flat owner) for this purpose. It won’t apply, for example, to tenants who rent a flat under an assured short-hold tenancy. or a house (rather than a flat) let on a long lease.

The owner needs to make this offer by serving a notice on the qualifying tenants. The owner must give certain details in the notice, and then allow a certain period in which the tenants must respond. The price is set by the owner - or at auction, if the sale proceeds that way.

During the notice period, the owner of the block of flats cannot sell to anyone else, nor at a price less than that specified in the notice. It is a criminal offence not to follow the correct procedure in the way set out in the law.

There are also further penalties which might apply if the correct procedure is not followed, which include the right for the tenants to take action against a new owner to force it to sell the freehold to them.

This is not a means by which tenants in a block of flats can force the owner to sell its freehold interest to them - it is simply a right for them to have the first chance to buy it, in fact, the owner can withdraw the offer at any time before the contract is binding.