How ROFR Works in Practice
| Scenario | ROFR Holder | Process |
|---|---|---|
| Co-owned property sale | Other co-owner(s) | Selling co-owner must first offer their share to other co-owners at same price — statutory right under TPA |
| Society flat resale | Housing society | Some society bylaws require seller to first offer flat to society or society nominees — society can find a buyer or waive |
| Tenant in rented property | Existing tenant | Some agreements or state laws give tenant ROFR when landlord decides to sell the rented property |
| Builder JDA (Joint Dev. Agreement) | Developer partner | Landowner cannot sell to another developer without first offering to the JDA partner |
| Commercial property | Existing tenant/lessee | Long-term commercial tenants often negotiate ROFR when entering lease |
Statutory Right of Pre-emption Under TPA
Under Section 22 of the Transfer of Property Act, co-owners of immovable property (heirs, joint purchasers) have a statutory right of pre-emption — the right to purchase a co-owner's share before it is transferred to a stranger. This statutory right must be exercised promptly on learning of the proposed transfer.
Buyers should check for ROFR: Before finalising a purchase, ask the seller: "Are there any right of first refusal agreements or co-owner pre-emption rights on this property?" If yes, ensure the ROFR holder has formally declined in writing before proceeding. Buying property with an unexercised ROFR can result in legal challenges from the ROFR holder.
Related Terms
Frequently Asked Questions
Right of First Refusal (ROFR) is a contractual or statutory right giving the holder the first opportunity to buy a property before the owner can sell to a third party. The owner must first offer the property to the ROFR holder at the same price and terms being offered to third parties. Only if the ROFR holder declines can the owner sell to someone else.
ROFR applies in: (1) Co-ownership — co-owners have statutory pre-emption right under TPA Section 22, (2) Housing society bylaws — society may have ROFR on flat resale, (3) Tenant agreements — some commercial tenants negotiate ROFR in long-term leases, (4) Builder JDAs — landowner cannot sell to another developer without offering to JDA partner, (5) Any sale agreement where parties contractually agreed on ROFR.
Yes — if in writing. A written ROFR clause in a sale agreement, society bylaws, or lease agreement is legally enforceable. The ROFR holder can file a suit for specific performance if the owner sells to a third party without first offering the property. Statutory ROFR under TPA for co-owners is automatically enforceable without any written agreement.
The exercise period should be specified in the agreement — typically 15–30 days from the date of receiving the offer. If not specified, the holder must exercise within a reasonable time. If the holder does not respond within the specified period, the owner can proceed to sell to a third party. ROFR holders should respond in writing — silence is not acceptance.
Ask the seller explicitly: "Is there any right of first refusal or pre-emption right on this property?" Check the sale agreement and any co-ownership deed — ROFR clauses should be disclosed. For housing society flats, review the society bylaws. For commercial property, review the lease agreement. Include a warranty in the sale agreement — seller declares no ROFR exists or all ROFR holders have declined in writing.