ROFR (Right of First Refusal)

Category: legal

A contractual right granting a tenant or party the option to match a third-party offer to buy or lease a property.

ROFR is the "dibs" clause. If the landlord decides to sell the building, and gets a $1M offer from a stranger, the tenant with a ROFR has the right to step in and buy it for $1M before the stranger can. It gives tenants security to invest in their location.

Common Examples

• The tech company exercised their Right of First Refusal to lease the adjacent office suite, preventing a competitor from moving in next door.
• A Right of First Refusal can make a property harder to sell, as outside buyers hate negotiating a deal only to have the tenant steal it at the last minute.