Tenants occupying rental spaces may have long-term plans for a property. This may be true for both commercial tenants who have invested in making space perfect for their business operations and residential tenants who may simply need time to become eligible for a mortgage.
Landlords who have tenants with an interest in buying eventually may extend them the right of first refusal in a lease. The right of first refusal grants a tenant the opportunity to make an offer on the property before the landlord lists it for sale on the open market.
What rights do tenants have when landlords do not uphold their right of first refusal?
Tenants can ask the courts for support
If a sale has not yet occurred, frustrated tenants can potentially take legal action when they learn that an outside party intends to purchase the property. They can file a lawsuit asking the courts to intervene on their behalf.
Particularly when they have the capital or financing to acquire the property at a fair market value, the courts may agree that the landlord cannot complete a transaction without first allowing the tenant the opportunity to make use of their right of first refusal.
Tenants may be able to hold landlords accountable for violating the terms of the lease and attempting to sell a property out from under them after they have invested in maintenance or improvements in the property. The courts can provide multiple remedies in scenarios where a landlord has failed to uphold the right of first refusal.
A pending sale could be a sign that legal action is necessary to prevent a real estate transaction that technically violates the terms of a lease. Reviewing a lease with a lawyer is often the first step toward holding a landlord accountable for unlawful conduct.