A lease provision giving the tenant the right to match the terms of any third-party offer before the landlord can lease adjacent or additional space to someone else.
A right of first refusal (ROFR) requires the landlord to notify the tenant when the landlord receives a bona fide third-party offer for specified space (typically adjacent suites or expansion space). The tenant then has a defined period (usually 5 to 15 business days) to match the third-party terms and lease the space. If the tenant declines, the landlord may proceed with the third party on the offered terms. A related but distinct concept is a right of first offer (ROFO), where the landlord must offer the space to the tenant before marketing it to third parties.
A landlord negotiates a below-market deal with a preferred tenant for the adjacent space, then presents the tenant with a ROFR notice at above-market terms to discourage the tenant from exercising the right.
Ensure your ROFR clause requires the landlord to present the actual third-party offer terms (not modified terms) and gives you adequate response time. Consider negotiating a right of first offer instead, which gives you the first opportunity before the space goes to market.
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Find My OverchargesThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
