– A right of first refusal (ROFR) is a right to elect to take specified property at the same price and on the same terms and conditions as those contained in a good faith offer by a third person if the owner manifests a willingness to accept the offer.
– A ROFR does not grant the power to compel an unwilling owner to sell, nor does it create a legal or equitable interest in the property.
– The ROFR becomes “activated” and “irrevocable during the period of time set forth in the agreement once the agreed upon events occur, commonly manifesting an intention to sell to a third party.
– Manifesting an intention to sell does not automatically trigger a ROFR, and the trigger is dependent on the terms of the agreement as to the event(s) that trigger the ROFR.
– The court found in a case that the ROFR was not triggered despite manifesting an intention to sell property and accepting bids, due to a clause in the agreement conditioning the ROFR upon the owner deeming an offer satisfactory.
– A subsequent 99-year lease for one dollar did not trigger the ROFR, and the court found no prohibition on transferring property from one governmental agency to another, leading to the finding that the ROFR was not triggered. – The right of first refusal (ROFR) is a contractual right that is determined by applicable contract law.
– Changes in the status of the property should not affect the ROFR before it is triggered and exercised.
– A contract interpretation issue can be settled by way of declaratory judgment prior to a proposed event to determine whether it may trigger a ROFR.
– Minor easements on a property do not diminish the ability to use the property in the agreed upon manner, and the principle of de minimis non curat lex applies.
– The determinative test Florida courts apply when determining whether easements have an effect on the usefulness of a property is whether the encroachment seriously interferes with the use and enjoyment of the premises.
– The emphasis placed on the contract creates the notion that the sale of property, unless otherwise specified, is when the ROFR is triggered. 1. The terms of the Right of First Refusal (ROFR) must be identical to the essential terms offered by a third party for the property.
2. In Int’l Christian Fellowship, Inc. v. Vinh on Property, Inc., the Fourth District Court of Appeals found that the ROFR was triggered, but because numerous terms differed, the ROFR was improperly exercised.
3. The terms of the agreement that establish the ROFR override the need to match the terms of a third-party offer that may encompass other property.
4. In Whyhopen, a landlord refused to honor tenant’s ROFR because the tenants did not agree to purchase the entire parcel, as the third-party offer proposed.
5. The court found that the intention to sell was evidenced and the ROFR was converted into an “irrevocable option to purchase.”
6. A third party attempting to purchase a parcel containing multiple individual leases is subject to the rights of each individual lease holder.
https://www.jimersonfirm.com/blog/2014/04/rights-first-refusal-florida/
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