What is the Right of First Refusal for leaseholders?

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The Right of First Refusal is a statutory protection that stops freeholders of many residential blocks from quietly selling the freehold to a third party (such as an investment fund or another landlord) without first giving the leaseholders living there the opportunity to buy it themselves. **How it works** Where a building qualifies (broadly, most buildings containing two or more flats let on long leases, where the majority of the internal floor area is residential), the freeholder must serve a formal notice on the qualifying leaseholders before selling the freehold, setting out the proposed price and terms, and giving them a set period to respond and decide whether they want to exercise their right to buy collectively instead. **Different from collective enfranchisement** This is a distinct right from collective enfranchisement (where leaseholders proactively initiate a claim to buy the freehold, even if the freeholder isn't planning to sell) -- Right of First Refusal is specifically triggered by the FREEHOLDER wanting to sell, requiring them to offer leaseholders the chance first, rather than leaseholders having to initiate the process themselves. **What happens if the freeholder ignores the right** If a freeholder sells the building to a third party without properly offering it to leaseholders first (or without following the correct legal notice procedure), the sale can, in many circumstances, still be challenged -- leaseholders may be able to require the new owner to sell them the freehold on the same terms the freeholder originally agreed with the third party, essentially unwinding the freeholder's attempt to bypass the leaseholders' rights. **Time limits and formal process** Leaseholders typically have a limited window (commonly around two months from being served notice) to respond and confirm whether enough of them want to proceed with buying collectively -- since this usually requires organising a majority of qualifying leaseholders to act together, it can be logistically challenging in larger buildings, particularly where some leaseholders are absent, uncontactable, or simply uninterested. **Exemptions** Certain types of building and freeholder are exempt from the Right of First Refusal requirement -- for example, some resident landlord situations, certain charitable housing trusts, and buildings that don't meet the residential floor area threshold, so not every leaseholder automatically benefits from this protection. **Why this matters** Buying the freehold collectively (whether via Right of First Refusal or proactive collective enfranchisement) gives leaseholders direct control over ground rent, service charge decisions, and building management, without needing to rely on an external freeholder's goodwill or being subject to their commercial priorities. **Practical tip** If you receive a formal notice from your freeholder about a proposed sale, respond promptly and seek advice quickly from a specialist leasehold solicitor, since strict time limits apply and organising enough leaseholders to act together takes time to coordinate.

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