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Subject: Right of First Refusal
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DanielleL2
(Colorado)

Posts:1


10/04/2019 11:09 AM  
Our building of 15 units has a Right of First Refusal for 20 days to current owners. Here is my question. I own in the building and I have a contract to buy a bigger unit. Because I am already an owner does the ROFR still stand? How can another owner come in with more rights than me?

I have recently been elected to the board of directors and I want to get this right.. We have a very difficult management company. Great people in our building and the management company is not very hands on and does not get stuff done.. Nobody has ever questioned him or but now we have an active community that wants our building taken care of. I don't even know where to start.
DouglasK1
(Florida)

Posts:1453


10/04/2019 11:30 AM  
Where is the ROFR documented? The details should be there. Who has the ROFR, is it the association or some other entity? Assuming there is no exclusion for existing owners, the ROFR should still be in effect.

The MC works for the association at the direction of the board. If the MC is not doing a good job, then replace them. Make sure to read your contract regarding cancellation notices.

Escaped former treasurer and director of a self managed association.
JohnC46
(South Carolina)

Posts:8730


10/04/2019 11:37 AM  
Dan

ROFR was a way to keep undesirables out. It basically said the BOD could buy the home at the same price the seller was selling it for. I doubt your BOD would do this so it should not be an issue.

I also question if such would hold up in court in this day and age.
GenoS
(Florida)

Posts:3234


10/04/2019 12:22 PM  
ROFR is legal in Florida if it's in the CC&Rs. Having it is a prerequisite for an association to wield the power of denying a sale or rejecting a buyer. Without strong justification from a background check, that's the only way to prevent a sale. Otherwise an association is exposing itself to a claim of unreasonable restraint on alienation.

In such cases the association holds the ROFR and must either buy the unit/home itself or be able to provide a different substitute buyer willing to accept the terms of the original sale.
PaulJ6
(New York)

Posts:319


10/05/2019 6:25 AM  
Posted By DanielleL2 on 10/04/2019 11:09 AM
Our building of 15 units has a Right of First Refusal for 20 days to current owners. Here is my question. I own in the building and I have a contract to buy a bigger unit. Because I am already an owner does the ROFR still stand? How can another owner come in with more rights than me?

I have recently been elected to the board of directors and I want to get this right.. We have a very difficult management company. Great people in our building and the management company is not very hands on and does not get stuff done.. Nobody has ever questioned him or but now we have an active community that wants our building taken care of. I don't even know where to start.




I'd start by including (in the sale contract) a representation by the seller that he has satisfied all rights of first refusal and that consummation of the sale to you does not violate the rights of a third party. That way, if the seller didn't satisfy the ROFR and another buyer then appears, you would have a breach of contract claim and could potentially unwind the deal rather than having to deal with the headache.
NpS
(Pennsylvania)

Posts:3758


10/05/2019 9:41 AM  
Apparently in CO, it's common for the right of first refusal to extend, not only to the Association, but also to any existing owner. 20 days is a common ROFR period.

Although that's common, you should read the exact language of your Declaration - which I assume creates the ROFR.

See link below for a Condo that got rid of their ROFR.

https://www.antlersvail.com/pdf_files/Vail%20condo%20owners%20set%20Vail%20real%20estate%20trend.pdf

Sikubali jukumu. Read all posts at your own risk.
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