If your freeholder proposes to sell on the open market, you may receive a Section 5A offer notice. This is the notice used for this type of sale under the Landlord and Tenant Act 1987. Where the right of first refusal applies, qualifying flat owners have a chance to act together on the proposed terms. Whether the right applies depends on the building, the leaseholders and the type of disposal.
Read the offer and mark the dates
Save a copy of the notice and record when it arrived. Check which interest the freeholder proposes to sell, the proposed price, the terms and the deadlines. For a Section 5A notice, the initial period to accept must be at least two months. Put the actual deadline from your notice in a shared calendar and allow time to take advice and arrange service of any response.
A different procedure can apply if the freeholder proposes an auction. Check which provision the notice cites before relying on a timetable for an open-market sale. Ask a solicitor who handles leasehold purchases to review any discrepancies or uncertainty about who received the notice.
Decide together whether the purchase is practical
An individual flat owner cannot accept the offer on behalf of the block. The statutory process requires the requisite majority of qualifying tenants. Establish who qualifies, who wants to take part and how contributions will be agreed before instructing anyone to serve an acceptance notice. Ask your solicitor about nominating a purchaser and the deadlines for doing so.
Budget for the price and professional fees, then consider what the group would need to run the building. Review the insurance arrangements, current service charge accounts, planned repairs and any existing management contracts. If major works are due, check how the group would oversee them and how funding would be collected. Record who will coordinate the purchase, make decisions and communicate with residents. A short written agreement on those responsibilities can help the group judge whether it has the time and resources to proceed.