Posted on: 17th Sep, 2012 07:53 am
A property in Ma was foreclosed and placed on the market. I made an offer, it was accepted and a purchases and sales was signed. Days before closing it was found out that the property was part of an affordable housing development owned by the town. The town was then given the option to exercise their right of first refusal. The paperwork was done and the 45 days for the town to decide was expired when the town's lawyer said the original paperwork for ROFR was invalid because the property should have been offered to them before it went on the market. Is this legal? Does that give the town the right to buy it sill? The town wasn't offered ROFR when the property foreclosed because the bank did not know it was affordable housing and the town had no idea it was foreclosed.
Hi NShep!
Welcome to forums!
The right to first refusal is a contractual right of an entity wherein it is given the opportunity to enter into a business transaction with a person or company before anyone else can. Since an entity has the right, but not the obligation, to enter into a transaction that generally involves an asset, it is similar to a having a call option on the asset. As far as I can understand, the town's lawyer is right in saying so.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
The right to first refusal is a contractual right of an entity wherein it is given the opportunity to enter into a business transaction with a person or company before anyone else can. Since an entity has the right, but not the obligation, to enter into a transaction that generally involves an asset, it is similar to a having a call option on the asset. As far as I can understand, the town's lawyer is right in saying so.
Feel free to ask if you've further queries.
Sussane