In this blog post, we will focus on the right of first refusal in real estate sales contracts.
The concept of right of first refusal may come into play when you are about to enter into a contract for the sale of real estate. In particular, when buying a condominium or a shared garage, it is advisable to be careful about the right of first refusal, as you may not be able to buy the property you are considering even if you make an offer.
You can find out about any pre-emption right you may have by looking at the data in the land register, but unfortunately practice shows that the pre-emption right is not always indicated on the title deed of the property or, in the case of a condominium, on the title deed. Before signing a sales contract, it is advisable to obtain and carefully read the Articles of Association of the condominium from the seller. Pay particular attention to the right of first refusal when buying a property in undivided joint ownership, as the co-owner is entitled to this right by law.
If it has been established that a third party has a right of first refusal in the case of a purchase of real estate, the purchase offer must be communicated in full to the right of first refusal holder, since the right of first refusal holder has the right to be fully informed of the purchase offer and to purchase the real estate on the same terms as those contained in the purchase offer. However, the pre-emptive right holder must make his/her declaration within the time limit set out in the purchase offer sent, taking into account the requirements of the law as to form and content, if he/she wishes to exercise his/her pre-emptive right. If the holder of the right of first refusal accepts the purchase offer received, the contract of sale is concluded on the same terms between the holder of the right of first refusal and the seller. The right of first refusal may, of course, also be cancelled by the buyer or, if no reply is received within the time limit, the absence of a reply may be considered as a cancellation and the sale contract may be concluded between the seller and the buyer without any obstacles. If the waiver is not received, the fact of the unavailability of the person with the right of first refusal must be communicated to the Land Registry. The declaration of renunciation must be submitted to the competent Land Registry together with the contract of sale. It may be extremely difficult to obtain a waiver of the right of pre-emption. In such a case, the parties to the contract must jointly declare the difficulties in obtaining the waiver, but it should be borne in mind that judicial practice may object to the invocation of these circumstances, encouraging the seller to take the trouble and time to obtain the waivers.
The right of first refusal can also be acquired on the basis of a contract, but in this case, too, the right acquired in this way must be registered in the Real Estate Register, because later it cannot be claimed against a bona fide author for violation of the right of first refusal.
If you come across the concept of right of first refusal, it is worth proceeding carefully and seeking the help of a real estate agent or a lawyer with experience in real estate law to ensure a successful and hassle-free purchase of your dream home.
