Right of first refusal
Introduction
What is the right of first refusal
Essentially, if you meet the qualifying criteria, a landlord who wants to sell or transfer their "interest" in a building containing flats has to offer to sell it to you and the other leaseholders first. This is known as the right of first refusal (RFR).
“Interest” usually means the freehold or superior leasehold. The RFR applies in most situations where the landlord is “disposing of their interest” by selling or transferring it or by creating a new headlease.
The landlord can set the price and terms as they like. If the leaseholders do not accept the offer, the landlord can sell their interest to someone else. However, the landlord cannot sell it for less money or on different terms for at least 12 months.
If you want to accept the offer, you need more than half of the leaseholders in the building to accept jointly. Usually, leaseholders set up a company to own the transferred interest, with the leaseholders as members of the company.
RFR is a legal right laid out in the Landlord and Tenant Act 1987 (as amended by the Housing Act 1996).
Disposal of interest
In most cases, the landlord will dispose of their interest either by selling the freehold on the open market or by auction. The method of disposal will determine:
- the contents of the offer notice
- timelines for notices and responses for both landlord and leaseholders
- rights of withdrawal
The procedures for RFR are laid out in the legislation, so must be followed carefully. This guide summarises the process, but you are advised to consult a solicitor.
- Last updated:
- 17 December 2025
- Next review:
- 17 December 2027