Real Estate Law · Haute Lawyer Network
What Is a Right of First Refusal on Real Estate?
Last reviewed: June 2026
A right of first refusal (ROFR) is a contractual right giving the holder the opportunity to purchase a property before the owner can sell it to a third party. When the owner receives a third-party offer they wish to accept, they must first offer the property to the ROFR holder on the same terms. If the holder matches the offer within the specified period, the sale proceeds with the holder as buyer. If the holder declines or fails to respond in time, the owner can sell to the third party.
ROFRs are common in real estate — between business partners in jointly owned property, between tenants and landlords, in family-owned property arrangements, and in commercial real estate leases. They differ from purchase options (which give the holder the right to buy at a pre-set price without a triggering offer) in that ROFRs are activated only by a third-party offer.
Frequently Asked Questions
How long does the ROFR holder have to respond?
The agreement specifies the response period — typically 5-30 days for real estate. The holder must respond within this period or the right lapses for that transaction.
Can the ROFR holder match a third-party offer that includes non-cash consideration?
This is a complex issue. If the third-party offer includes non-cash elements — equity in another company, services, etc. — the ROFR holder typically must match the economic equivalent, which can be complicated to establish.
Does a ROFR affect the owner's ability to sell?
Yes — it complicates the sale process. Third-party buyers are often reluctant to negotiate and conduct due diligence when the seller has an existing ROFR holder who might exercise their right at the last minute.
What happens if the owner sells without honoring the ROFR?
The ROFR holder can sue for breach of contract and potentially for specific performance — requiring the sale to be undone and the property sold to the ROFR holder on the original terms, if the third-party buyer had notice of the ROFR.
Does a ROFR need to be recorded?
Recording a ROFR puts third-party buyers on notice — preventing them from claiming they purchased without knowledge of the right. An unrecorded ROFR may not be enforceable against a bona fide purchaser without notice.
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