Right to First Refusal
I wanted to dive into a clause that is often overlooked in the rental market… It’s called the Right to First Refusal.
The downtown rental market is dominated by investors, for the most part. I work with a lot of investors and the only thing that matters when it comes to investment properties is the MATH. If the market is up, investors are more open to cashing out.. aka SELL THE UNIT.
In this blog, I’m going to take a look at this from the angle of a tenant… which my investor clients might not like! But my tenant clients will appreciate!
If you’re the tenant in a property on a year lease, you have to be aware that the landlord is still able to sell the property at any time. You must also allow potential buyers access to your unit/home with 24 hours written notice provided by the landlord or his or her agent.
If the landlord sells the unit… chances are that you will be given 60 days notice to vacate the property as long as you are outside of your year term. If you are within your year term there is no way the landlord or the new owner can ask you to vacate the unit.
If you are applying to a property as a tenant and could see yourself purchasing the property one day.. its important to use a clause called “Right to First Refusal”. Should your landlord receive an offer on the property you are currently occupying as a tenant… You would have the right to ALSO submit an offer on the property before the owner could accept the initial offer.
This is not a clause many know about and is something which can save a lot of heartbreak when a tenant or tenants grow very fond a property. A lot of deals are done behind the scenes without a showing even taking place
It is important to note……… Just because you are able to submit an offer on the property, it does not mean the seller/landlord has to accept your offer! This is just a vehicle clause which makes sure that you get a fair shot at submitting an offer on the property before it gets sold out from under you!