What is a right of first refusal?

A right of first refusal is a legal agreement between two parties that gives one party the right to be given the first option to purchase the property of the other if the property is put up for sale. This right is often given to tenants of a property, and it means that the tenant has a “first offer” to buy the property before anyone else. In California, the right of first refusal is a statutory right that applies to residential rental properties. This means that if a property owner wants to sell their property, or terminate their tenant’s tenancy, they must first offer the tenant the right of first refusal. The tenant then has the right to accept the offer and purchase the property at the same terms and conditions offered to a third party. The right of first refusal is also commonly used in commercial real estate leasing agreements, allowing the tenant the right to purchase the property if the owner decides to sell. This right is typically requested by the tenant in order to ensure that they can maintain control over the property and its condition, and to guarantee an affordable purchase option in the future. In California, the right of first refusal is regulated by the California Civil Code. The code provides details on how the right should be set up, including the notice that must be given to the tenant, as well as the terms and conditions that must be included in the agreement.

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What is a right of first refusal?

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