Right of first refusal
The BrokerFold Team — Product + Engineering
Last reviewed
A right of first refusal (ROFR) is a contractual right that requires a property owner, before completing a sale to a third party, to offer the holder the chance to buy on the same terms. It doesn’t force the owner to sell and doesn’t set a price in advance — it waits until a genuine third-party offer exists, then gives the holder a window to match it.
How the trigger works
The owner accepts (or is prepared to accept) a bona fide offer, notice goes to the ROFR holder with the offer’s terms, and a defined clock starts — days, typically, per the granting document. Match within the window and the holder steps into the deal; decline or stay silent and the original sale proceeds. Third-party buyers in a ROFR situation therefore sign agreements that are genuinely conditional on the right not being exercised — a structural cousin of the seller’s escape clause, with the uncertainty pointed at the buyer.
Why ROFRs chill bidding
A buyer who knows their carefully negotiated offer can be taken by a matching insider has less incentive to negotiate hard — some walk at the mention. That’s the standing critique of ROFRs in condo declarations and land-lease communities, and it’s why sellers whose property carries one should surface it early rather than let it emerge from the buyer’s document review as a surprise.
Why it matters for your practice
ROFRs live in documents — declarations, status certificates, leases, old severance agreements — and they change offer strategy on both sides. Knowing to ask “does anything on title or in the corporation’s documents give anyone rights over this sale?” before listing is the kind of diligence that separates process from luck.
Frequently asked questions
Where do buyers actually run into ROFRs?
Most often in condos and co-ops whose declarations grant the corporation or other owners a right over sales or rentals (the status certificate or corporation documents reveal it), in land-lease and mobile-home communities, on severed farmland where a neighbour retained rights, and in leases where a tenant negotiated one. Title and corporate documents are where they hide — which is what a lawyer's review is for.
Is a right of first refusal the same as an option to purchase?
No. An option lets its holder force a sale at set terms whenever they choose to exercise it. A ROFR is passive — it does nothing until the owner decides to sell and a real offer exists, and then only lets the holder match it. Options are the stronger right; ROFRs are the more common one.
Keep reading
- Escape clause An escape clause lets a seller keep marketing after accepting a conditional offer — and force the buyer to waive or walk when a better offer arrives.
- Status certificate A status certificate is an Ontario condo corporation's disclosure package — finances, arrears, lawsuits, rules — and the condition every condo offer needs.
- Agreement of purchase and sale The APS is the contract at the centre of every Ontario home sale — offer, acceptance, deposit, conditions and closing terms in one document.