Do you have your eye on an office condo? Thinking of offering a discounted price due to the current market conditions. You might have an additional hurdle to clear that you didn’t think of. Did you know that many condo associations have a “Right of First Refusal” clause, which has the ability to hand your sweetheart deal to someone else.
In the association’s Declaration of Covenants, the “Transfer of Units” clause, a.k.a. “Right of First Refusal”, gives owners within that condominium parcel the opportunity to step in and buy the space simply by matching your offer. As an example, typically if a bona fide offer by a person other than one of the unit owners for the purchase to all or any part of the unit is made and such the owner wants to accept the offer, they must inform the other unit owners and the association and then give them twenty days to match the offer.
In the event that more than one unit owner is interested in buying the unit, the first right shall be given to the adjacent owner(s) then to other owners within the building and then to the Association. If two adjacent unit owners are interested in buying the unit, then the determination of who shall purchase the unit is typically to be made by arbitration.
If neither unit owner nor the association elects to purchase the unit, the association will give the selling owner evidence that this provision has been complied with.
The wording set forth in individual Declaration of Covenants may vary, so be sure to review these documents before you count your chickens.