The New Pre-emption Arrangements are obligatory but they apply only to signatories to the Master Deed.
Although pre-emption is no longer permissible as of the 20th Licensing Round, pre-existing provisions remain but must be read in line with the New Pre-emption Arrangements. The effect is that those provisions are limited to a maximum 30 day pre-emption period. Of course, if the joint operating agreement is silent with regard to pre-emption, the Master Deed will not insert pre-emption rights; instead, the agreement will be read as written.
The provisions do not apply to the following:
- Share sales; or
- Sales where there is not a monetary consideration,
however there are exceptions and the Master Deed should be consulted.
The New Pre-emption Arrangements provide for two levels of notification: a voluntary seven day period and the obligatory 30 day period.
If using the initial seven day period then you serve your intention together with the information that is required under the Existing Pre-emption Arrangements. The co-venturers have seven days to either reserve their rights or waive them (in accordance with the Existing Pre-emption Arrangements). If a co-venturer fails to respond to them they shall be deemed to have reserved their rights.
Regardless of whether or not the optional seven day notice is provided, a Disposing Participant must serve a notice of pre-emption on all the co-venturers (unless they waived their rights under the optional procedure). You are required to provide the main terms of the disposal, which must include:
- The identity of the proposed purchaser;
- The effective date of the Proposed Disposal;
- The applicable price; and
- All and any material conditions to which such agreement is subject.
As with the optional seven day process, co-venturers are required to respond and either waive or exercise their rights of pre-emption, however if a co-venturer fails to respond within the 30 days then they will be deemed to have waived their rights.