ukpga/1987/31 — Landlord and Tenant Act 1987

Landlord and Tenant Act 1987 1987 c. 31 An Act to confer on tenants of flats rights with respect to the acquisition by them of their landlord’s reversion; to make provision for the appointment of a manager at the instance of such tenants and for the variation of long leases held by such tenants; to make further provision with respect to service charges payable by tenants of flats and other dwellings; to make other provision with respect to such tenants; to make further provision with respect to the permissible purposes and objects of registered housing associations as regards the management of leasehold property; and for connected purposes. [15th May 1987] Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:— Part I Tenants’ Rights of First Refusal Preliminary Qualifying tenants to have rights of first refusal on disposals by landlord. 1 1 A landlord shall not make a relevant disposal affecting any premises to which at the time of the disposal this Part applies unless— a he has in accordance with section 5 previously served a notice under that section with respect to the disposal on the qualifying tenants of the flats contained in those premises (being a notice by virtue of which rights of first refusal are conferred on those tenants); and b the disposal is made in accordance with the requirements of sections 6 to 10. 2 Subject to subsections (3) and (4), this Part applies to premises if— a they consist of the whole or part of a building; and b they contain two or more flats held by qualifying tenants; and c the number of flats held by such tenants exceeds 50 per cent. of the total number of flats contained in the premises. 3 This Part does not apply to premises falling within subsection (2) if— a any part or parts of the premises is or are occupied or intended to be occupied otherwise than for residential purposes; and b the internal floor area of that part or those parts (taken together) exceeds 50 per cent. of the internal floor area of the premises (taken as a whole); and for the purposes of this subsection the internal floor area of any common parts shall be disregarded. 4 This Part also does not apply to any such premises at a time when the interest of the landlord in the premises is held by an exempt landlord or a resident landlord. 5 The Secretary of State may by order substitute for the percentage for the time being specified in subsection (3)(b) such other percentage as is specified in the order. Landlords for the purposes of Part I. 2 1 Subject to subsection (2) and section 4(1A) , a person is for the purposes of this Part the landlord in relation to any premises consisting of the whole or part of a building if he is— a the immediate landlord of the qualifying tenants of the flats contained in those premises, or b where any of those tenants is a statutory tenant, the person who, apart from the statutory tenancy, would be entitled to possession of the flat in question. 2 Where the person who is, in accordance with subsection (1), the landlord in relation to any such premises for the purposes of this Part (“ the immediate landlord ”) is himself a tenant of those premises under a tenancy which is either— a a tenancy for a term of less than seven years, or b a tenancy for a longer term but terminable within the first seven years at the option of the person who is the landlord under that tenancy (“the superior landlord”), the superior landlord shall also be regarded as the landlord in relation to those premises for the purposes of this Part and, if the superior landlord is himself a tenant of those premises under a tenancy falling within paragraph (a) or (b) above, the person who is the landlord under that tenancy shall also be so regarded (and so on). Qualifying tenants. 3 1 Subject to the following provisions of this section, a person is for the purposes of this Part a qualifying tenant of a flat if he is the tenant of the flat under a tenancy other than— a a protected shorthold tenancy as defined in section 52 of the Housing Act 1980; b a tenancy to which Part II of the Landlord and Tenant Act 1954 (business tenancies) applies; . . . c a tenancy terminable on the cessation of his employment ; d an assured tenancy or assured agricultural occupancy within the meaning of Part I of the Housing Act 1988 ; or e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g a tenancy that is an occupation contract (within the meaning of the Renting Homes (Wales) Act 2016 (anaw 1) (see section 7 of that Act)). 2 A person is not to be regarded as being a qualifying tenant of any flat contained in any particular premises consisting of the whole or part of a building if by virtue of one or more tenancies none of which falls within paragraphs (a) to (d) of subsection (1), he is the tenant not only of the flat in question but also of at least two other flats contained in those premises . 3 For the purposes of subsection (2) any tenant of a flat contained in the premises in question who is a body corporate shall be treated as the tenant of any other flat so contained and let to an associated company. 4 A tenant of a flat whose landlord is a qualifying tenant of that flat is not to be regarded as being a qualifying tenant of that flat. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relevant disposals. 4 1 In this Part references to a relevant disposal affecting any premises to which this Part applies are references to the disposal by the landlord of any estate or interest (whether legal or equitable) in any such premises, including the disposal of any such estate or interest in any common parts of any such premises but excluding— a the grant of any tenancy under which the demised premises consist of a single flat (whether with or without any appurtenant premises); and b any of the disposals falling within subsection (2). 1A Where an estate or interest of the landlord has been mortgaged, the reference in subsection (1) above to the disposal of an estate or interest by the landlord includes a reference to its disposal by the mortgagee in exercise of a power of sale or leasing, whether or not the disposal is made in the name of the landlord; and, in relation to such a proposed disposal by the mortgagee, any reference in the following provisions of this Part to the landlord shall be construed as a reference to the mortgagee. 2 The disposals referred to in subsection (1)(b) are— a a disposal of— i any interest of a beneficiary in settled land within the meaning of the Settled Land Act 1925, or ii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii any incorporeal hereditament; aa a disposal . . . by way of security for a loan b a disposal to a trustee in bankruptcy or to the liquidator of a company; c a disposal in pursuance of an order made under— i section 24 of the Matrimonial Causes Act 1973 (property adjustment orders in connection with matrimonial proceedings), ii section 24A of the Matrimonial Causes Act 1973 (orders for the sale of property in connection with matrimonial proceedings) where the order includes provision requiring the property concerned to be offered for sale to a person or class of persons specified in the order, iii section 2 of the Inheritance (Provision for Family and Dependants) Act 1975 (orders as to financial provision to be made from estate), iv section 17(1) of the Matrimonial and Family Proceedings Act 1984 (property adjustment orders after overseas divorce, &c.), v section 17(2) of the Matrimonial and Family Proceedings Act 1984 (orders for the sale of property after overseas divorce, &c.) where the order includes provision requiring the property concerned to be offered for sale to a person or class of persons specified in the order, ... vi paragraph 1 of Schedule 1 to the Children Act 1989 (orders for financial relief against parents); vii Part 2 of Schedule 5, or paragraph 9(2) or (3) of Schedule 7, to the Civil Partnership Act 2004 (property adjustment orders in connection with civil partnership proceedings or after overseas dissolution of a civil partnership, etc. ), or viii Part 3 of Schedule 5, or paragraph 9(4) of Schedule 7, to the Civil Partnership Act 2004 (orders for the sale of property in connection with civil partnership proceedings or after overseas dissolution of a civil partnership, etc. ) where the order includes provision requiring the property concerned to be offered for sale to a person or class of persons specified in the order; d a disposal in pursuance of a compulsory purchase order or in pursuance of an agreement entered into in circumstances where, but for the agreement, such an order would have been made or (as the case may be) carried into effect; da a disposal of any freehold or leasehold interest in pursuance of Chapter I of Part I of the Leasehold Reform, Housing and Urban Development Act 1993; db the conferral of a code right under Schedule 3A to the Communications Act 2003 (the electronic communications code); e a disposal by way of gift to a member of the landlord’s family or to a charity; f a disposal by one charity to another of an estate or interest in land which prior to the disposal is functional land of the first-mentioned charity and which is intended to be functional land of the other charity once the disposal is made; g a disposal consisting of the transfer of an estate or interest held on trust for any person where the disposal is made in connection with the appointment of a new trustee or in connection with the discharge of any trustee; h a disposal consisting of a transfer by two or more persons who are members of the same family either— i to fewer of their number, or ii to a different combination of members of the family (but one that includes at least one of the transferors); i a disposal in pursuance of a contract, option or right of pre-emption binding on the landlord (except as provided by section 8D (application of sections 11 to 17 to disposal in pursuance of option or right of pre-emption)); j a disposal consisting of the surrender of a tenancy in pursuance of any covenant, condition or agreement contained in it; k a disposal to the Crown; and l a disposal by a body corporate to a company which has been an associated company of that body for at least two years. 3 In this Part “ disposal ” means a disposal whether by the creation or the transfer of an estate or interest and— a includes the surrender of a tenancy and the grant of an option or right of pre-emption, but b excludes a disposal under the terms of a will or under the law relating to intestacy; and references in this Part to the transferee in connection with a disposal shall be construed accordingly. 4 In this section “ appurtenant premises ”, in relation to any flat, means any yard, garden, outhouse or appurtenance (not being a common part of the building containing the flat) which belongs to, or is usually enjoyed with, the flat. 5 A person is a member of another’s family for the purposes of this section if— a that person is the spouse or civil partner of that other person, or the two of them live together as if they were a married couple or civil partners , or b that person is that other person’s parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew or niece. 6 For the purposes of subsection (5)(b)— a a relationship by marriage or civil partnership shall be treated as a relationship by blood, b a relationship of the half-blood shall be treated as a relationship of the whole blood, c the stepchild of a person shall be treated as his child, and d an illegitimate child shall be treated as the legitimate child of his mother and reputed father. Application of provisions to contracts. 4A 1 The provisions of this Part apply to a contract to create or transfer an estate or interest in land, whether conditional or unconditional and whether or not enforceable by specific performance, as they apply in relation to a disposal consisting of the creation or transfer of such an estate or interest. As they so apply— a references to a disposal of any description shall be construed as references to a contract to make such a disposal; b references to making a disposal of any description shall be construed as references to entering into a contract to make such a disposal; and c references to the transferee under the disposal shall be construed as references to the other party to the contract and include a reference to any other person to whom an estate or interest is to be granted or transferred in pursuance of the contract. 2 The provisions of this Part apply to an assignment of rights under such a contract as is mentioned in subsection (1) as they apply in relation to a disposal consisting of the transfer of an estate or interest in land. As they so apply— a references to a disposal of any description shall be construed as references to an assignment of rights under a contract to make such a disposal; b references to making a disposal of any description shall be construed as references to making an assignment of rights under a contract to make such a disposal; c references to the landlord shall be construed as references to the assignor; and d references to the transferee under the disposal shall be construed as references to the assignee of such rights. 3 The provisions of this Part apply to a contract to make such an assignment as is mentioned in subsection (2) as they apply (in accordance with subsection (1)) to a contract to create or transfer an estate or interest in land. 4 Nothing in this section affects the operation of the provisions of this Part relating to options or rights of pre-emption. Rights of first refusal Landlord required to serve offer notice on tenants. 5 1 Where the landlord proposes to make a relevant disposal affecting premises to which this Part applies, he shall serve a notice under this section (an “offer notice”) on the qualifying tenants of the flats contained in the premises (the “constituent flats”). 2 An offer notice must comply with the requirements of whichever is applicable of the following sections— section 5A (requirements in case of contract to be completed by conveyance, &c.), section 5B (requirements in case of sale at auction), section 5C (requirements in case of grant of option or right of pre-emption), section 5D (requirements in case of conveyance not preceded by contract, &c.); and in the case of a disposal to which section 5E applies (disposal for non-monetary consideration) shall also comply with the requirements of that section. 3 Where a landlord proposes to effect a transaction involving the disposal of an estate or interest in more than one building (whether or not involving the same estate or interest), he shall, for the purpose of complying with this section, sever the transaction so as to deal with each building separately. 4 If, as a result of the offer notice being served on different tenants on different dates, the period specified in the notice as the period for accepting the offer would end on different dates, the notice shall have effect in relation to all the qualifying tenants on whom it is served as if it provided for that period to end with the latest of those dates. 5 A landlord who has not served an offer notice on all of the qualifying tenants on whom it was required to be served shall nevertheless be treated as having complied with this section— a if he has served an offer notice on not less than 90% of the qualifying tenants on whom such a notice was required to be served, or b where the qualifying tenants on whom it was required to be served number less than ten, if he has served such a notice on all but one of them. Offer notice: requirements in case of contract to be completed by conveyance, &c. 5A 1 The following requirements must be met in relation to an offer notice where the disposal consists of entering into a contract to create or transfer an estate or interest in land. 2 The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular— a the property, and the estate or interest in that property, to which the contract relates, b the principal terms of the contract (including the deposit and consideration required). 3 The notice must state that the notice constitutes an offer by the landlord to enter into a contract on those terms which may be accepted by the requisite majority of qualifying tenants of the constituent flats. 4 The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice. 5 The notice must specify a further period of not less than two months within which a person or persons may be nominated by the tenants under section 6. 6 This section does not apply to the grant of an option or right of pre-emption (see section 5C). Offer notice: requirements in case of sale by auction. 5B 1 The following requirements must be met in relation to an offer notice where the landlord proposes to make the disposal by means of a sale at a public auction held in England and Wales. 2 The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular the property to which it relates and the estate or interest in that property proposed to be disposed of. 3 The notice must state that the disposal is proposed to be made by means of a sale at a public auction. 4 The notice must state that the notice constitutes an offer by the landlord, which may be accepted by the requisite majority of qualifying tenants of the constituent flats, for the contract (if any) entered into by the landlord at the auction to have effect as if a person or persons nominated by them, and not the purchaser, had entered into it. 5 The notice must specify a period within which that offer may be so accepted, being a period of not less than two months beginning with the date of service of the notice. 6 The notice must specify a further period of not less than 28 days within which a person or persons may be nominated by the tenants under section 6. 7 The notice must be served not less than four months or more than six months before the date of the auction; and— a the period specified in the notice as the period within which the offer may be accepted must end not less than two months before the date of the auction, and b the period specified in the notice as the period within which a person may be nominated under section 6 must end not less than 28 days before the date of the auction. 8 Unless the time and place of the auction and the name of the auctioneers are stated in the notice, the landlord shall, not less than 28 days before the date of the auction, serve on the requisite majority of qualifying tenants of the constituent flats a further notice stating those particulars. Offer notice: requirements in case of grant or option or right of pre-emption. 5C 1 The following requirements must be met in relation to an offer notice where the disposal consists of the grant of an option or right of pre-emption. 2 The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular— a the property, and the estate or interest in that property, to which the option or right of pre-emption relates, b the consideration required by the landlord for granting the option or right of pre-emption, and c the principal terms on which the option or right of pre-emption would be exercisable, including the consideration payable on its exercise. 3 The notice must state that the notice constitutes an offer by the landlord to grant an option or right of pre-emption on those terms which may be accepted by the requisite majority of qualifying tenants of the constituent flats. 4 The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice. 5 The notice must specify a further period of not less than two months within which a person or persons may be nominated by the tenants under section 6. Offer notice: requirements in case of conveyance not preceded by contract, &c. 5D 1 The following requirements must be met in relation to an offer notice where the disposal is not made in pursuance of a contract, option or right of pre-emption binding on the landlord. 2 The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular— a the property to which it relates and the estate or interest in that property proposed to be disposed of, and b the consideration required by the landlord for making the disposal. 3 The notice must state that the notice constitutes an offer by the landlord to dispose of the property on those terms which may be accepted by the requisite majority of qualifying tenants of the constituent flats. 4 The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice. 5 The notice must specify a further period of not less than two months within which a person or persons may be nominated by the tenants under section 6. Offer notice: disposal for non-monetary consideration. 5E 1 This section applies where, in any case to which section 5 applies, the consideration required by the landlord for making the disposal does not consist, or does not wholly consist, of money. 2 The offer notice, in addition to complying with whichever is applicable of sections 5A to 5D, must state— a that an election may made under section 8C (explaining its effect), and b that, accordingly, the notice also constitutes an offer by the landlord, which may be accepted by the requisite majority of qualifying tenants of the constituent flats, for a person or persons nominated by them to acquire the property in pursuance of sections 11 to 17. 3 The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice. Acceptance of landlord’s offer: general provisions. 6 1 Where a landlord has served an offer notice, he shall not during— a the period specified in the notice as the period during which the offer may be accepted, or b such longer period as may be agreed between him and the requisite majority of the qualifying tenants of the constituent flats, dispose of the protected interest except to a person or persons nominated by the tenants under this section. 2 Where an acceptance notice is duly served on him, he shall not during the protected period (see subsection (4) below) dispose of the protected interest except to a person duly nominated for the purposes of this section by the requisite majority of qualifying tenants of the constituent flats (a “nominated person”). 3 An “ acceptance notice ” means a notice served on the landlord by the requisite majority of qualifying tenants of the constituent flats informing him that the persons by whom it is served accept the offer contained in his notice. An acceptance notice is “duly served” if it is served within— a the period specified in the offer notice as the period within which the offer may be accepted, or b such longer period as may be agreed between the landlord and the requisite majority of qualifying tenants of the constituent flats. 4 The “protected period” is the period beginning with the date of service of the acceptance notice and ending with— a the end of the period specified in the offer notice as the period for nominating a person under this section, or b such later date as may be agreed between the landlord and the requisite majority of qualifying tenants of constituent flats. 5 A person is “duly nominated” for the purposes of this section if he is nominated at the same time as the acceptance notice is served or at any time after that notice is served and before the end of— a the period specified in the offer notice as the period for nomination, or b such longer period as may be agreed between the landlord and the requisite majority of qualifying tenants of the constituent flats. 6 A person nominated for the purposes of this section by the requisite majority of qualifying tenants of the constituent flats may be replaced by another person so nominated if, and only if, he has (for any reason) ceased to be able to act as a nominated person. 7 Where two or more persons have been nominated and any of them ceases to act without being replaced, the remaining person or persons so nominated may continue to act. Failure to accept landlord’s offer or to make nomination. 7 1 Where a landlord has served an offer notice on the qualifying tenants of the constituent flats and— a no acceptance notice is duly served on the landlord, or b no person is nominated for the purposes of section 6 during the protected period, the landlord may, during the period of 12 months beginning with the end of that period, dispose of the protected interest to such person as he thinks fit, but subject to the following restrictions. 2 Where the offer notice was one to which section 5B applied (sale by auction), the restrictions are— a that the disposal is made by means of a sale at a public auction, and b that the other terms correspond to those specified in the offer notice. 3 In any other case the restrictions are— a that the deposit and consideration required are not less than those specified in the offer notice, and b that the other terms correspond to those specified in the offer notice. 4 The entitlement of a landlord, by virtue of this section or any other corresponding provision of this Part, to dispose of the protected interest during a specified period of 12 months extends only to a disposal of that interest, and accordingly the requirements of section 1(1) must be satisfied with respect to any other disposal by him during that period of 12 months (unless the disposal is not a relevant disposal affecting any premises to which at the time of the disposal this Part applies). Landlord’s obligations in case of acceptance and nomination. 8 1 This section applies where a landlord serves an offer notice on the qualifying tenants of the constituent flat and— a an acceptance notice is duly served on him, and b a person is duly nominated for the purposes of section 6, by the requisite majority of qualifying tenants of the constituent flats. 2 Subject to the following provisions of this Part, the landlord shall not dispose of the protected interest except to the nominated person. 3 The landlord shall, within the period of one month beginning with the date of service of notice of nomination, either— a serve notice on the nominated person indicating an intention no longer to proceed with the disposal of the protected interest, or b be obliged to proceed in accordance with the following provisions of this Part. 4 A notice under subsection (3)(a) is a notice of withdrawal for the purposes of section 9B(2) to (4) (consequences of notice of withdrawal by landlord). 5 Nothing in this section shall be taken as prejudicing the application of the provisions of this Part to any further offer notice served by the landlord on the qualifying tenants of the constituent flats. Landlord’s obligation: general provisions. 8A 1 This section applies where the landlord is obliged to proceed and the offer notice was not one to which section 5B applied (sale by auction). 2 The landlord shall, within the period of one month beginning with the date of service of the notice of nomination, send to the nominated person a form of contract for the acquisition of the protected interest on the terms specified in the landlord’s offer notice. 3 If he fails to do so, the following provisions of this Part apply as if he had given notice under section 9B (notice of withdrawal by landlord) at the end of that period. 4 If the landlord complies with subsection (2), the nominated person shall, within the period of two months beginning with the date on which it is sent or such longer period beginning with that date as may be agreed between the landlord and that person, either— a serve notice on the landlord indicating an intention no longer to proceed with the acquisition of the protected interest, or b offer an exchange of contracts, that is to say, sign the contract and send it to the landlord, together with the requisite deposit. In this subsection “ the requisite deposit ” means a deposit of an amount determined by or under the contract or an amount equal to 10 per cent of the consideration, whichever is the less. 5 If the nominated person— a serves notice in pursuance of paragraph (a) of subsection (4), or b fails to offer an exchange of contracts within the period specified in that subsection, the following provisions of this Part apply as if he had given notice under section 9A (withdrawal by nominated person) at the same time as that notice or, as the case may be, at the end of that period. 6 If the nominated person offers an exchange of contracts within the period specified in subsection (4), but the landlord fails to complete the exchange within the period of seven days beginning with the day on which he received that person’s contract, the following provisions of this Part apply as if the landlord had given notice under section 9B (withdrawal by landlord) at the end of that period. Landlord’s obligation: election in case of sale at auction. 8B 1 This section applies where the landlord is obliged to proceed and the offer notice was one to which section 5B applied (sale by auction). 2 The nominated person may, by notice served on the landlord not less than 28 days before the date of the auction, elect that the provisions of this section shall apply. 3 If a contract for the disposal is entered into at the auction, the landlord shall, within the period of seven days beginning with the date of the auction, send a copy of the contract to the nominated person. 4 If, within the period of 28 days beginning with the date on which such a copy is so sent, the nominated person— a serves notice on the landlord accepting the terms of the contract, and b fulfils any conditions falling to be fulfilled by the purchaser on entering into the contract, the contract shall have effect as if the nominated person, and not the purchaser, had entered into the contract. 5 Unless otherwise agreed, any time limit in the contract as it has effect by virtue of subsection (4) shall start to run again on the service of notice under that subsection; and nothing in the contract as it has effect by virtue of a notice under this section shall require the nominated person to complete the purchase before the end of the period of 28 days beginning with the day on which he is deemed to have entered into the contract. 6 If the nominated person— a does not serve notice on the landlord under subsection (2) by the time mentioned in that subsection, or b does not satisfy the requirements of subsection (4) within the period mentioned in that subsection, the following provisions of this Part apply as if he had given notice under section 9A (withdrawal by nominated person) at the end of that period. Election in case of disposal for non-monetary consideration. 8C 1 This section applies where an acceptance notice is duly served on the landlord indicating an intention to accept the offer referred to in section 5E (offer notice: disposal for non-monetary consideration). 2 The requisite majority of qualifying tenants of the constituent flats may, by notice served on the landlord within— a the period specified in the offer notice for nominating a person or persons for the purposes of section 6, or b such longer period as may be agreed between the landlord and the requisite majority of qualifying tenants of the constituent flats, elect that the following provisions shall apply. 3 Where such an election is made and the landlord disposes of the protected interest on terms corresponding to those specified in his offer notice in accordance with section 5A, 5B, 5C or 5D, sections 11 to 17 shall have effect as if— a no notice under section 5 had been served; b in section 11A(3) (period for serving notice requiring information, &c.), the reference to four months were a reference to 28 days; and c in section 12A(2) and 12B(3) (period for exercise of tenants’ rights against purchaser) each reference to six months were a reference to two months. 4 For the purposes of sections 11 to 17 as they have effect by virtue of subsection (3) so much of the consideration for the original disposal as did not consist of money shall be treated as such amount in money as was equivalent to its value in the hands of the landlord. The landlord or the nominated person may apply to have that amount determined by the appropriate tribunal . Disposal in pursuance of option or right of pre-emption. 8D 1 Where— a the original disposal was the grant of an option or right of pre-emption, and b in pursuance of the option or right, the landlord makes another disposal affecting the premises (“the later disposal”) before the end of the period specified in subsection (2), sections 11 to 17 shall have effect as if the later disposal, and not the original disposal, were the relevant disposal. 2 The period referred to in subsection (1)(b) is the period of four months beginning with the date by which— a notices under section 3A of the Landlord and Tenant Act 1985 (duty of new landlord to inform tenants of rights) relating to the original disposal, or b where that section does not apply, documents of any other description— i indicating that the original disposal has taken place, and ii alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised, have been served on the requisite majority of qualifying tenants of the constituent flats. Covenant, &c affecting landlord’s power to dispose. 8E 1 Where the landlord is obliged to proceed but is precluded by a covenant, condition or other obligation from disposing of the protected interest to the nominated person unless the consent of some other person is obtained— a he shall use his best endeavours to secure that the consent of that person to that disposal is given, and b if it appears to him that that person is obliged not to withhold his consent unreasonably but has nevertheless so withheld it, he shall institute proceedings for a declaration to that effect. 2 Subsection (1) ceases to apply if a notice of withdrawal is served under section 9A or 9B (withdrawal of either party from transaction) or if notice is served under section 10 (lapse of landlord’s offer: premises ceasing to be premises to which this Part applies). 3 Where the landlord has discharged any duty imposed on him by subsection (1) but any such consent as is there mentioned has been withheld, and no such declaration as is there mentioned has been made, the landlord may serve a notice on the nominated person stating that to be the case. When such a notice has been served, the landlord may, during the period of 12 months beginning with the date of service of the notice, dispose of the protected interest to such person as he thinks fit, but subject to the following restrictions. 4 Where the offer notice was one to which section 5B applied (sale by auction), the restrictions are— a that the disposal is made by means of a sale at a public auction, and b that the other terms correspond to those specified in the offer notice. 5 In any other case the restrictions are— a that the deposit and consideration required are not less than those specified in the offer notice or, if higher, those agreed between the landlord and the nominated person (subject to contract), and b that the other terms correspond to those specified in the offer notice. 6 Where notice is given under subsection (3), the landlord may recover from the nominated party and the qualifying tenants who served the acceptance notice any costs reasonably incurred by him in connection with the disposal between the end of the first four weeks of the nomination period and the time when that notice is served by him. Any such liability of the nominated person and those tenants is a joint and several liability. Notice of withdrawal by nominated person. 9A 1 Where the landlord is obliged to proceed, the nominated person may serve notice on the landlord (a “notice of withdrawal”) indicating his intention no longer to proceed with the acquisition of the protected interest. 2 If at any time the nominated person becomes aware that the number of the qualifying tenants of the constituent flats desiring to proceed with the acquisition of the protected interest is less than the requisite majority of qualifying tenants of those flats, he shall forthwith serve a notice of withdrawal. 3 Where notice of withdrawal is given by the nominated person under this section, the landlord may, during the period of 12 months beginning with the date of service of the notice, dispose of the protected interest to such person as he thinks fit, but subject to the following restrictions. 4 Where the offer notice was one to which section 5B applied (sale by auction), the restrictions are— a that the disposal is made by means of a sale at a public auction, and b that the other terms correspond to those specified in the offer notice. 5 In any other case the restrictions are— a that the deposit and consideration required are not less than those specified in the offer notice or, if higher, those agreed between the landlord and the nominated person (subject to contract), and b that the other terms correspond to those specified in the offer notice. 6 If notice of withdrawal is served under this section before the end of the first four weeks of the nomination period specified in the offer notice, the nominated person and the qualifying tenants who served the acceptance notice are not liable for any costs incurred by the landlord in connection with the disposal. 7 If notice of withdrawal is served under this section after the end of those four weeks, the landlord may recover from the nominated person and the qualifying tenants who served the acceptance notice any costs reasonably incurred by him in connection with the disposal between the end of those four weeks and the time when the notice of withdrawal was served on him. Any such liability of the nominated person and those tenants is a joint and several liability. 8 This section does not apply after a binding contract for the disposal of the protected interest— a has been entered into by the landlord and the nominated person, or b has otherwise come into existence between the landlord and the nominated person by virtue of any provision of this Part. Notice of withdrawal by landlord. 9B 1 Where the landlord is obliged to proceed, he may serve notice on the nominated person (a “notice of withdrawal”) indicating his intention no longer to proceed with the disposal of the protected interest. 2 Where a notice of withdrawal is given by the landlord, he is not entitled to dispose of the protected interest during the period of 12 months beginning with the date of service of the notice. 3 If a notice of withdrawal is served before the end of the first four weeks of the nomination period specified in the offer notice, the landlord is not liable for any costs incurred in connection with the disposal by the nominated person and the qualifying tenants who served the acceptance notice. 4 If a notice of withdrawal is served after the end of those four weeks, the nominated person and the qualifying tenants who served the acceptance notice may recover from the landlord any costs reasonably incurred by them in connection with the disposal between the end of those four weeks and the time when the notice of withdrawal was served. 5 This section does not apply after a binding contract for the disposal of the protected interest— a has been entered into by the landlord and the nominated person, or b has otherwise come into existence between the landlord and the nominated person by virtue of any provision of this Part. Withdrawal of either party from transaction. 9 1 Where— a section 6(1) applies to a landlord by virtue of any provision of sections 6 to 8, and b any person has been nominated for the purposes of section 6 by the requisite majority of qualifying tenants of the constituent flats within the period specified by the landlord in his offer notice under section 5(2)(d) (taking into account any postponement of the commencement of that period effected by any of the preceding provisions of this Part), and c the nominated person serves a notice on the landlord indicating an intention no longer to proceed with the acquisition of the protected interest, the landlord may, during the period of 12 months beginning with the date of service of the nominated person’s notice, dispose of the protected interest to such person as he thinks fit, but subject to the restrictions mentioned in subsection (2). 2 The restrictions referred to in subsection (1) are— a that the consideration required by him for the disposal must not be less than the amount which has been agreed to by the parties (subject to contract) for the disposal of the protected interest, and b that the other terms on which the disposal is made must correspond to those so agreed to by the parties in relation to the disposal. 3 If at any time the nominated person becomes aware that the number of the qualifying tenants of the constituent flats desiring to proceed with the acquisition of the protected interest is less than the requisite majority of qualifying tenants of those flats, he shall forthwith serve on the landlord such a notice as is mentioned in subsection (1)(c). 4 Where— a paragraphs (a) and (b) of subsection (1) apply, and b the landlord serves a notice on the nominated person indicating an intention no longer to proceed with the disposal of the protected interest, the landlord shall not be entitled to dispose of that interest in accordance with that subsection but the notice shall have the consequences set out in subsection (5) or (6) (as the case may be). 5 If any notice served in pursuance of subsection (1), (3) or (4) above is served not later than the end of the first four weeks of the period referred to in subsection (1)(b) above, the party serving it shall not be liable for any costs incurred by the other party in connection with the disposal. 6 If any such notice is served after the end of those four weeks, the party on whom it is served may recover from the other party any costs reasonably incurred by the first-mentioned party in connection with the disposal between the end of those four weeks and the time when that notice is served on him. 7 For the purposes of this section the parties are— a the landlord, and b the qualifying tenants who served the acceptance notice or other notice accepting an offer by the landlord, or (as the case may be) the notice making the counter-offer which was accepted by the landlord, together with the nominated person, and any liability of those tenants and the nominated person which arises under this section shall be a joint and several liability. 8 Nothing in this section applies where a binding contract for the disposal of the protected interest has been entered into by the landlord and the nominated person. 9 In this section and section 10— “ the nominated person ” means the person or persons for the time being nominated for the purposes of section 6 by the requisite majority of qualifying tenants of the constituent flats; and “ the protected interest ” means— a except where section 6(1) applies to the landlord by virtue of section 7(4) or 8(2), the protected interest as defined by section 6(9); and b where section 6(1) applies to the landlord by virtue of section 7(4) or 8(2), any such estate or interest as is mentioned in section 7(4)(a) or (as the case may be) in section 8(2)(a). Lapse of landlord’s offer. 10 1 If after a landlord has served an offer notice the premises concerned cease to be premises to which this Part applies, the landlord may serve a notice on the qualifying tenants of the constituent flats stating— a that the premises have ceased to be premises to which this Part applies, and b that the offer notice, and anything done in pursuance of it, is to be treated as not having been served or done; and on the service of such a notice the provisions of this Part cease to have effect in relation to that disposal. 2 A landlord who has not served such a notice on all of the qualifying tenants of the constituent flats shall nevertheless be treated as having duly served a notice under subsection (1)— a if he has served such a notice on not less than 90% of those tenants, or b where those qualifying tenants number less than ten, if he has served such a notice on all but one of them. 3 Where the landlord is entitled to serve a notice under subsection (1) but does not do so, this Part shall continue to have effect in relation to the disposal in question as if the premises in question were still premises to which this Part applies. 4 The above provisions of this section do not apply after a binding contract for the disposal of the protected interest— a has been entered into by the landlord and the nominated person, or b has otherwise come into existence between the landlord and the nominated person by virtue of any provision of this Part. 5 Where a binding contract for the disposal of the protected interest has been entered into between the landlord and the nominated person but it has been lawfully rescinded by the landlord, the landlord may, during the period of 12 months beginning with the date of the rescission of the contract, dispose of that interest to such person (and on such terms) as he thinks fit. Offence of failure to comply with requirements of Part I. 10A 1 A landlord commits an offence if, without reasonable excuse, he makes a relevant disposal affecting premises to which this Part applies— a without having first complied with the requirements of section 5 as regards the service of notices on the qualifying tenants of flats contained in the premises, or b in contravention of any prohibition or restriction imposed by sections 6 to 10. 2 A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale. 3 Where an offence under this section committed by a body corporate is proved— a to have been committed with the consent or connivance of a director, manager, secretary or other similar officer of the body corporate, or a person purporting to act in such a capacity, or b to be due to any neglect on the part of such an officer or person, he, as well as the body corporate, is guilty of the offence and liable to be proceeded against and punished accordingly. Where the affairs of a body corporate are managed by its members, the above provision applies in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate. 4 Proceedings for an offence under this section may be brought by a local housing authority (within the meaning of section 1 of the Housing Act 1985). 5 Nothing in this section affects the validity of the disposal. Enforcement by tenants of rights against purchaser Circumstances in which tenants’ rights enforceable against purchaser 11 1 The following provisions of this Part apply where a landlord has made a relevant disposal affecting premises to which at the time of the disposal this Part applied (“the original disposal”), and either— a no notice was served by the landlord under section 5 with respect to that disposal, or b the disposal was made in contravention of any provision of sections 6 to 10, and the premises are still premises to which this Part applies. 2 In those circumstances the requisite majority of the qualifying tenants of the flats contained in the premises affected by the relevant disposal (the “constituent flats”) have the rights conferred by the following provisions— section 11A (right to information as to terms of disposal, &c.), section 12A (right of qualifying tenants to take benefit of contract), section 12B (right of qualifying tenants to compel sale, &c. by purchaser), and section 12C (right of qualifying tenants to compel grant of new tenancy by superior landlord). 3 In those sections the transferee under the original disposal (or, in the case of the surrender of a tenancy, the superior landlord) is referred to as “the purchaser”. This shall not be read as restricting the operation of those provisions to disposals for consideration. Right to information as to terms of disposal, &c. 11A 1 The requisite majority of qualifying tenants of the constituent flats may serve a notice on the purchaser requiring him— a to give particulars of the terms on which the original disposal was made (including the deposit and consideration required) and the date on which it was made, and b where the disposal consisted of entering into a contract, to provide a copy of the contract. 2 The notice must specify the name and address of the person to whom (on behalf of the tenants) the particulars are to be given, or the copy of the contract provided. 3 Any notice under this section must be served before the end of the period of four months beginning with the date by which— a notices under section 3A of the Landlord and Tenant Act 1985 (duty of new landlord to inform tenants of rights) relating to the original disposal, or b where that section does not apply, documents of any other description— i indicating that the original disposal has taken place, and ii alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised, have been served on the requisite majority of qualifying tenants of the constituent flats. 4 A person served with a notice under this section shall comply with it within the period of one month beginning with the date on which it is served on him. Right of qualifying tenants to take benefit of contract. 12A 1 Where the original disposal consisted of entering into a contract, the requisite majority of qualifying tenants of the constituent flats may by notice to the landlord elect that the contract shall have effect as if entered into not with the purchaser but with a person or persons nominated for the purposes of this section by the requisite majority of qualifying tenants of the constituent flats. 2 Any such notice must be served before the end of the period of six months beginning— a if a notice was served on the purchaser under section 11A (right to information as to terms of disposal, &c.), with the date on which the purchaser complied with that notice; b in any other case, with the date by which documents of any description— i indicating that the original disposal has taken place, and ii alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised, have been served on the requisite majority of qualifying tenants of the constituent flats. 3 The notice shall not have effect as mentioned in subsection (1) unless the nominated person— a fulfils any requirements as to the deposit required on entering into the contract, and b fulfils any other conditions required to be fulfilled by the purchaser on entering into the contract. 4 Unless otherwise agreed, any time limit in the contract as it has effect by virtue of a notice under this section shall start to run again on the service of that notice; and nothing in the contract as it has effect by virtue of a notice under this section shall require the nominated person to complete the purchase before the end of the period of 28 days beginning with the day on which he is deemed to have entered into the contract. 5 Where the original disposal related to other property in addition to premises to which this Part applied at the time of the disposal— a a notice under this section has effect only in relation to the premises to which this Part applied at the time of the original disposal, and b the terms of the contract shall have effect with any necessary modifications. In such a case the notice under this section may specify the subject-matter of the disposal, and the terms on which the disposal is to be made (whether doing so expressly or by reference to the original disposal), or may provide for that estate or interest, or any such terms, to be determined by the appropriate tribunal . Right of qualifying tenants to compel sale, &c. by purchaser. 12B 1 This section applies where— a the original disposal consisted of entering into a contract and no notice has been served under section 12A (right of qualifying tenants to take benefit of contract), or b the original disposal did not consist of entering into a contract. 2 The requisite majority of qualifying tenants of the constituent flats may serve a notice (a “purchase notice”) on the purchaser requiring him to dispose of the estate or interest that was the subject-matter of the original disposal, on the terms on which it was made (including those relating to the consideration payable), to a person or persons nominated for the purposes of this section by any such majority of qualifying tenants of those flats. 3 Any such notice must be served before the end of the period of six months beginning— a if a notice was served on the purchaser under section 11A (right to information as to terms of disposal, &c.), with the date on which the purchaser complied with that notice; b in any other case, with the date by which— i notices under section 3A of the Landlord and Tenant Act 1985 (duty of new landlord to inform tenants of rights) relating to the original disposal, or ii where that section does not apply, documents of any other description indicating that the original disposal has taken place, and alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised, have been served on the requisite majority of qualifying tenants of the constituent flats. 4 A purchase notice shall where the original disposal related to other property in addition to premises to which this Part applied at the time of the disposal— a require the purchaser only to make a disposal relating to those premises, and b require him to do so on the terms referred to in subsection (2) with any necessary modifications. In such a case the purchase notice may specify the subject-matter of the disposal, and the terms on which the disposal is to be made (whether doing so expressly or by reference to the original disposal), or may provide for those matters to be determined by the appropriate tribunal . 5 Where the property which the purchaser is required to dispose of in pursuance of the purchase notice has since the original disposal become subject to any charge or other incumbrance, then, unless the court by order directs otherwise— a in the case of a charge to secure the payment of money or the performance of any other obligation by the purchaser or any other person, the instrument by virtue of which the property is disposed of by the purchaser to the person or persons nominated for the purposes of this section shall (subject to the provisions of Part I of Schedule 1) operate to discharge the property from that charge; and b in the case of any other incumbrance, the property shall be so disposed of subject to the incumbrance but with a reduction in the consideration payable to the purchaser corresponding to the amount by which the existence of the incumbrance reduces the value of the property. 6 Subsection (5)(a) and Part I of Schedule 1 apply, with any necessary modifications, to mortgages and liens as they apply to charges; but nothing in those provisions applies to a rentcharge. 7 Where the property which the purchaser is required to dispose of in pursuance of the purchase notice has since the original disposal increased in monetary value owing to any change in circumstances (other than a change in the value of money), the amount of the consideration payable to the purchaser for the disposal by him of the property in pursuance of the purchase notice shall be the amount that might reasonably have been obtained on a corresponding disposal made on the open market at the time of the original disposal if the change in circumstances had already taken place. Right of qualifying tenants to compel grant of new tenancy by superior landlord 12C 1 This section applies where the original disposal consisted of the surrender by the landlord of a tenancy held by him (“the relevant tenancy”). 2 The requisite majority of qualifying tenants of the constituent flats may serve a notice on the purchaser requiring him to grant a new tenancy of the premises which were subject to the relevant tenancy, on the same terms as those of the relevant tenancy and so as to expire on the same date as that tenancy would have expired, to a person or persons nominated for the purposes of this section by any such majority of qualifying tenants of those flats. 3 Any such notice must be served before the end of the period of six months beginning— a if a notice was served on the purchaser under section 11A (right to information as to terms of disposal, &c.), with the date on which the purchaser complied with that notice; b in any other case, with the date by which documents of any description— i indicating that the original disposal has taken place, and ii alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised, have been served on the requisite majority of qualifying tenants of the constituent flats. 4 If the purchaser paid any amount to the landlord as consideration for the surrender by him of that tenancy, the nominated person shall pay that amount to the purchaser. 5 Where the premises subject to the relevant tenancy included premises other than premises to which this Part applied at the time of the disposal, a notice under this section shall— a require the purchaser only to grant a new tenancy relating to the premises to which this Part then applied, and b require him to do so on the terms referred to in subsection (2) subject to any necessary modifications. 6 The purchase notice may specify the subject-matter of the disposal, and the terms on which the disposal is to be made (whether doing so expressly or by reference to the original disposal), or may provide for those matters to be determined by the appropriate tribunal . Nominated persons: supplementary provisions. 12D 1 The person or persons initially nominated for the purposes of section 12A, 12B or 12C shall be nominated in the notice under that section. 2 A person nominated for those purposes by the requisite majority of qualifying tenants of the constituent flats may be replaced by another person so nominated if, and only if, he has (for any reason) ceased to be able to act as a nominated person. 3 Where two or more persons have been nominated and any of them ceases to act without being replaced, the remaining person or persons so nominate