Right to First Refusal

by PRIME Radar Team  May 17, 2015

Question:

Hello, PRIME. I’m considering moving closer to where I work, but I’m not ready to purchase property yet so I’ll be leasing in the meantime. I’ve already found a landlord willing to lease out a space for me to stay in, but I suspect that at some point he may sell it. I’m interested in the property and by then I’m sure I’ll have the means to purchase it, but I’m worried that he might sell it to someone else. Is there any agreement we can make to ensure that in the event that he does decide to sell the property, he will make me an offer first before approaching another party?

Answer:

Thank you for your question! It’s good that you’re planning ahead. Purchasing property for yourself is one of the best ways to increase your net worth. To answer your question, yes there is such an agreement you can make with your landlord, and it’s called the Right to First Refusal. When included as a clause in your contract of lease, it obligates your landlord to do exactly that: if he considers selling it, you’ll be prioritized over other interested buyers of that property.

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