Section 5

Offer your tenants the Right of First Refusal

Free, fast and professional Section 5 Notice service

We’ll serve notice on your behalf at no cost to you

Selling a freehold property and serving notices to leaseholders can be costly, stressful and time consuming, which is why we offer a free and professional solution to help you save money. We have extensive experience in serving notices on behalf of our clients and can assist you in complying with your legal obligation to offer the Right of First Refusal to qualifying tenants in your building. 

Our Section 5 Notice service is fast and efficient. We can even serve notice on the same day, as long as you instruct us before 2PM. When serving notice, we retain all postage receipts for your file along with all related documentation, so you can rest assured that you have met your legal obligations. 

We offer the following as part of our Section 5 Notice ROFR service: 

  • We will purchase official copies of titles and leases from the Land Registry 
  • We will prepare the Section 5 Notice using correct proprietorship information
  • We will issue the Section 5 Notice to all qualifying tenants
  • We will obtain postage receipts to prove that notice has been served
  • We will keep copies of the notices and associated documents for your records
  • We will typically serve notice on the same day if you instruct us before 2pm

To start the Section 5 Notice procedure to offer your tenants the Right of First Refusal, or to learn more about our service, complete the contact form and one of our advisors will be in touch to discuss how we can assist you. When you sell your freehold ground rents to us, we’ll always offer to serve the Section 5a Notices on your behalf for free.

Contact us about serving Section 5 Notices today

Our Right of First Refusal Service is hassle-free and delivered by experts with decades of experience.

Call us on 01245 227 920 or apply online and we’ll contact you at the earliest opportunity.

What is a Section 5 Notice and the Right of First Refusal?

If you’re a landlord looking to sell the freehold of a property with at least two flats, in most cases you are legally required to serve all qualifying tenants a Section 5 Notice. Landlords can be exempt from serving this notice in some instances, such as when the property is your only principal residence and has been for more than 12 months.

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 (ROFR) and provided by Part 1 of the Landlord and Tenant Act 1987. RFR is only applicable if the freehold contains at least two flats, no more than 50% of the building is in non-residential use, and more than 50% of the flats are held by qualifying tenants.

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.

How long do you have to wait once notice is served?

When serving a Section 5 Notice, the qualifying tenants will have two months to consider the offer. The notice is deemed to be served two days after posting. Once two months and two days have passed since the Section 5 Notice was posted, you are able to dispose of the freehold on the same terms as offered in the notice.

 What are the consequences of not providing notice?

It is a criminal offence to sell a freehold without first offering the Right of First Refusal to the qualifying tenants, as it is a breach of the obligations set by the Landlord and Tenant Act. Not providing the proper notice to tenants can result in criminal conviction and a fine of up to £5,000. You will also have to undo the sale transaction with the freehold buyer and bear all the costs for doing so. 

Following the disposal of a freehold, the leaseholders have the right to demand information relating to the sale within a specified timeframe, to verify that Right of First Refusal obligations were complied with. If it was discovered that the offer notice was not posted correctly, 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. The leaseholders then have the option of forcing the new landlord to sell the freehold to them at that price, if the landlord did not comply with their obligation to offer Right of First Refusal.

 

Further Information

To learn more about the Right of First Refusal, download our comprehensive Right of First Refusal Guide.  It’s been prepared by experts at Freehold Sale and written in plain English, so it’s easy to understand

 

Are you getting the best sale price for your freehold ground rents?

Calculating the value of a freehold property can be a difficult task, with so many influential factors to consider. In fact, it is not unusual for people to miscalculate or even undervalue a freehold’s interest because they have overlooked a crucial detail. To ensure that you’re getting the right price for your freehold, contact Freehold Sale for an expert appraisal. Our team specialise in valuing freehold properties and will help you to understand the strength of your investment.