Key Points:
- Prosecution under Landlord and Tenant Act 1987:
- Historically, there had never been an attempted prosecution under the Landlord and Tenant Act 1987. However, a recent attempted prosecution emphasizes potential criminal liability for landlords.
- Right of First Refusal Provisions:
- Under the 1987 Act, when a landlord intends to sell their interest in a building containing qualifying flats, they must offer it to the tenants first through a formal section 5 notice.
- The landlord cannot sell to a third party during this period, nor can they offer the interest to others at a price less favorable than proposed to the tenants.
- Criminal Offence for Non-compliance:
- Failing to offer tenants a right of first refusal (without a reasonable excuse) is now considered a criminal offence.
- The potential penalty includes a potentially unlimited fine.
- Case Example:
- The inaugural case involved a landlord who disposed of a block of flats at an auction without offering the right of first refusal to tenants.
- The local housing authority issued a summons against the landlord six months after completion.
- The summons was argued to be outside the required time limit, and the landlord successfully avoided prosecution.
- Time Limit Challenge:
- The landlord successfully argued that the summons was served outside the six-month time limit.
- The argument was based on the interpretation that the disposal took place on the auction date, not on the completion date.
- Criminal Prosecution Risk:
- While this case did not result in prosecution due to a time limit challenge, landlords are reminded of the potential risk of criminal prosecution for non-compliance with the 1987 Act.
- The case underscores that the Act, previously considered toothless, has the potential for significant consequences if breached.
