What happens if an existing commercial tenant has a right of first refusal to buy the building?

A right of first refusal (ROFR) to purchase gives a tenant the ability to step into a sale on the same terms someone else has already agreed to, before the landlord can complete a sale to that outside buyer. In practice, once the landlord has a bona fide offer it's prepared to accept, it generally has to give the tenant a chance to match those terms and buy the building itself before selling to the third party.

For a seller, this means a ROFR needs to be dealt with early in the sale process, not discovered at the last minute. Offering the property to an outside buyer without first honouring a valid ROFR risks a claim from the tenant and can create real uncertainty for that outside buyer, whose deal may be at risk of being displaced or unwound. For a prospective buyer, discovering an unaddressed ROFR during due diligence is a serious flag that needs to be resolved, through a proper waiver from the tenant, before closing can safely proceed.

Anyone selling or buying a property with an existing tenant should have a lawyer confirm early whether a ROFR exists in the lease and build the necessary notice and waiver steps into the transaction timeline.