Section 28 Purchase Options and Rights of First Refusal

• Library: Real Estate Leasing and Landlord-Tenant Actions and Remedies 2011

Leases occasionally grant to tenants a right to purchase the leased premises. While these provisions may take many forms, they generally consist of either an option to purchase the leased premises at some point in the future or a right of first refusal to purchase the property if the landlord desires to sell the property to a third party. While these purchase rights are really a separate type of agreement beyond the scope of this chapter, they are often included in leases or entered into in conjunction with leases.

An option contract is a continuing offer to sell by the landlord that,
when exercised, becomes a purchase contract. Purchase contracts
are discussed in more detail in Real Estate Fundamentals: acquisition, Title, Interests, and Conveyancing (MoBar expected publication date of Fall 2011). An option contained in a lease should be as detailed as any other purchase contract and contain the same terms and conditions. But these...