What is 'Right of First Refusal'?

The concept of 'Right of First Refusal' refers to a leaseholder's entitlement to be given the opportunity to purchase the freehold of the property or shares in the management company before the owner offers it to any other potential buyers. This right is often included in lease agreements to protect the interests of the leaseholders, ensuring they have the chance to acquire ownership before others are considered.

This provision is especially significant in leasehold scenarios where leaseholders may want to retain long-term control or ownership of their living arrangements, making it beneficial for both parties—the leaseholders have an opportunity to maintain continuity in ownership, while the freeholder or management company has a structured process to follow.

The other options do not accurately define this term. Negotiating rent pertains to discussions about lease terms, renewing a lease refers to extending the duration of an existing lease, and the right to sublet involves permitting another tenant to occupy the property under the original lease terms, none of which relate directly to the specific opportunity provided by the Right of First Refusal.