What is a Section 5 Notice?

If you’re a landlord looking to sell the freehold of a property with at least two flats, you must first serve all qualifying tenants a Section 5 Notice.

The Section 5 Notice is a document that both informs tenants of your intention to sell the freehold, and gives them the opportunity to buy that interest before it is offered on the open market. This is known as the Right of First Refusal

There are five different forms of notice. These are based on the various ways a freehold property can be sold. These include the Section 5A Notice (for a sale by contract), the Section 5B Notice (for a sale by public auction), the Section 5C Notice (for a grant of an option or right of pre-emption), the Section 5D Notice (for a sale not pursuant to a contract), and the Section 5E Notice (for a sale for a non-monetary consideration). The most common of these are the Section 5A and 5B Notices.

What information do you need to serve notice?

You first need to know whether your tenants are qualifying tenants. Qualifying tenants include leaseholders and some fixed term or periodic tenancies. However, assured or assured shorthold tenancies, or tenants of more than 3 flats in the building are not qualifying tenants.

Under the Landlord and Tenant Act 1987, you are legally obliged to serve all qualifying tenants with a Section 5 Notice when selling the freehold of a property with at least two flats. Failure to do this is a criminal offence and can result in criminal conviction, as well as a fine of up to £5,000.

Once you have confirmed that your tenants are qualifying tenants, you then need to ensure that the notices are correctly served on the tenants at their known addresses or by any other means of service.

What happens if you don’t serve notice?

The qualifying tenants have a timefrme to request information relating to the transfer if they wish to verify that RFR obligations were complied with.

If it was discovered that the offer notice was issued to the wrong address, contained incorrect details, or if the drafting did not meet the prescribed format, it may invalidate the notice which would be considered an illegal transfer.

How Freehold Sale can help

Serving a Section 5 Notice may appear simple, but the slightest mistake can render the document invalid which is why professional advice is advised. Here at Freehold Sale we specialise in buying and selling freeholds, and have extensive experience in serving notice on behalf of our clients. We know what information is required, as well as how to source and verify this information.

We offer a competitive Section 5 Notice service for a flat rate of £250. Rather than charging by time, for this flat rate we will prepare and issue up to 4 notices*.

If you’re in a hurry, we can serve notice on the same day if you instruct us before 3pm. When serving notice, we retain postage receipts for your file along with all related documentation.

We offer a cost effective solution to serving a Section 5 Notice for our clients. Contact us today and let us help you achieve a smooth freehold sale.

*Our Flat rate of £250 is subject to service notice on up to 4 leaseholders. For a greater number of leaseholders, please contact us for more information. 

Call us on 01245 227 920 or use our online contact form today.

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