Do long term business tenants have a right to buy?

[JanetJanets]

My mother, widowed, owns a property, part of which she lives in, part of which is rented out as a business. The tenants have resided there and run a business, for circa 25 years. There is also farmland belonging to the property, however they don’t have any interests in the land.
I believe there’s a legality, whereby on my mother’s death, and sale of the property, that the tenants have the right to purchase the property at below market value.
I would like to know whether this is the case with her living in part of her property. My mother is keen to know because of safeguarding her property, and ultimately, inheritance to my sibling and me.
Many thanks in advance.

I suspect you are referring to the Landlord and Tenant Act 1987. This gives leaseholders the right of first refusal to buy the freehold of a building containing flats when the landlord sells it. However, this does not give them the right to buy at below market value. You may be confusing this with the right of council and housing association tenants, who can buy their homes at below market value in some situations. Your mother needs to take proper legal advice if she wants to understand the situation for certain.

Hi - thank you for responding.
My mother thinks the tenants would have the right to purchase the property. The premises is split into two separate dwellings, mother living in one, the tenants in the other. The tenants run their business using outbuildings belonging on the farm which my mother owns in its entirety. There is also farm land which the tenants do not use for their business. They have four further years on their lease and have run their business for 25 years.
My brother and I will inherit the property, neither of us knowing whether we will sell or keep it, whilst mother believes that if we were to put it on the market, the tenants would have first dibs to purchase the property at below-market rate.
I can’t see how this would be the case given that they rent only part of the premises to run their business.

They definitely don't have any right to buy for less than the market price. It doesn't sound like the Landlord and Tenant Act applies, but you shouldn't trust my word for that - see a solicitor who specialises in this area. However, if it does, the process is that the landlord sets the price the tenants must pay for the property. If they don't take up the offer, the landlord cannot sell it for less than that price or on better terms than they offered to the tenants for a period of 12 months. The tenants can be required to pay the landlord's legal and professional costs as well as the purchase price.

The Landlord and Tenant Act 1987 only normally gives the right of first refusal to the owners of flats, and it doesn't apply when the freehold of a leasehold house is being sold, so no, they have no right to buy the freehold, either at market price or at a discount.

However, they will probably have protection as business tenants under Part II of the Landlord and Tenant Act 1954, which basically means that they are entitled to a new lease when the current one expires in four years unless the then owner of the freehold can bring themselves within one of the exceptions to that rule. It's a highly technical area, and you should seek professional advice.

I wonder if she’s thinking of an agricultural successional tenancy? Usually what happens is there is a three generation tenancy, and then if the owner wants to sell it’s easiest to offer it to the sitting tenant as to sell it to someone else, you’d have to pay the sitting tenant compensation to surrender their tenancy. So you’re better off to sell it to the tenant a bit cheaper than pay the compensation, usually equally to several years rent I think.
I doubt that’s the type of tenancy she has though unless it’s a working farm. You need solicitor/land agent advice really.

Thanks everybody for your input - it seems like a bit of a minefield.