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.

1. Qualifying tenants to have rights of first refusal on disposals by landlord

(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 section 6 to l0.

(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 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.

2 Landlords for the purposes of Part I

(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.

3: Qualifying tenants.

(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 or

(d) an assured tenancy or assured agricultural occupancy within the meaning of Part I of the Housing Act 1988.

(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.

4: Relevant disposals.

(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, or

(vi) paragraph 1 of Schedule 1 to the Children Act 1989 (orders for financial relief against parents);

(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;

(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 of that other person, or the two of them live together as husband and wife, 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 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.

4A Application of provisions to contracts.

(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.

5. Landlord required to serve offer notice on tenants.

(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).

Enforcement by tenants of rights against purchaser

11. Duty of new landlord to furnish particulars of disposal made in contravention of Part I

(1) Where --

(a) a landlord has made a relevant disposal affecting any premises to which at the time of the disposal this Part applied ("the original disposal"), and

(b) either no notice was served by the landlord under section 5 with respect to that disposal or it was made in contravention of any provision of sections 6 to l0, and

(c) those premises are still premises to which this Part applies,

the requisite majority of qualifying tenants of the constituent flats may, before the end of the period specified in subsection (2) below, serve a notice on the transferee under the original disposal requiring him to furnish a person (whose name and address are specified for the purpose in the notice) with particulars of the terms on which the original disposal was made (including those relating to the consideration payable) and the date on which it was made; and in the following provisions of this Part the transferee under that disposal is referred to as "the new landlord".

(2) The period referred to in subsection (1) is the period of two months beginning with the date by which --

(a) notices under section 3 of the Landlord and Tenant Act 1985 (in this Act referred to as "the l985 Act") relating to the original disposal, or

(b) documents of any other description indicating that the original disposal has taken place,

have been served on the requisite majority of qualifying tenants of the constituent flats.

(3) Any person served with a notice in accordance with subsection (1) shall comply with the notice within the period of one month beginning with the date on which it is served on him.

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.

12. Right of qualifying tenants to compel sale etc by new landlord

(1)Where --

(a) paragraphs (a) and (b) of section ll(1) apply to a relevant disposal affecting any premises to which at the time of the disposal this Part applied (other than a disposal consisting of such a surrender as is mentioned in section l5(1)(b), and

(b) those premises are still premises to which this Part applies,

the requisite majority of qualifying tenants of the constituent flats may, before the end of the period specified in subsection (2), serve a notice ("a purchase notice") on the new landlord requiring him (except as provided by the following provisions of this Part) to dispose of the estate or interest that was the subject-matter of the original disposal, on 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.

(2) The period referred to in subsection (1) is -

(a) in a case where a notice has been served on the new landlord under section ll(l), the period of three months beginning with the date on which a notice is served by him under section ll(3); and

(b) in any other case, the period of three months beginning with the date mentioned in section 11(2).

(3) A purchase notice --

(a) shall, where the estate or interest that was the subject-matter of the original disposal related to any property in addition to the premises to which this Part applied at the time of the disposal --

(i) require the new landlord to dispose of that estate or interest only so far as relating to those premises, and

(ii) require him to do so on the terms referred to in subsection (1) subject to such modifications as are necessary or expedient in the circumstances;

(b) may, instead of specifying the estate or interest to be disposed of or any particular terms on which the disposal is to be made by the new landlord (whether doing so expressly or by reference to the original disposal), provide for that estate or interest, or (as the case may be) for any such terms, to be determined by a rent assessment committee in accordance with section 13.

(4) Where the property which the new landlord is required to dispose of in pursuance of the purchase notice has at any time 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 new landlord or any other person, the instrument by virtue of which the property is disposed of by the new landlord to the person or persons nominated for the purposes of this section shall (subject to the provisions of Part I of Schedule l) 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 new landlord corresponding to the amount by which the existence of the incumbrance reduces the value of the property.

48:-- Notification by landlord of address for service of notices.

(1) A landlord of premises to which this Part applies shall by notice furnish the tenant with an address in England & Wales at which notices (including notices in proceedings) may be served on him by the tenant.

(2) Any rent or service charge otherwise due from the tenant to the landlord shall (subject to sub section (3)) be treated for all purposes as not being due from the tenant to the landlord at any time before the landlord does comply with that sub section.

(3) Any such rent or service charge shall not be so treated in relation to any time when, by virtue of an order of any court, there is in force an appointment of a receiver or manager whose functions include the receiving of rent or (as the case may be) service charges from the tenant.