Do you know what the right of first refusal and withdrawal is? It is quite common in rental contracts to regulate the right of preferential acquisition or right of first refusal and withdrawal. Next, we will tell you what a clause waiving the right of first refusal and withdrawal consists of and how it should be regulated.
In civil law (common law) there are two types of rights. Those of legal trial and withdrawal (those regulated by law) and conventional ones (those agreed upon by the parties in a contract). The Civil Code establishes the following legal retractions: that of the community members, that of the adjoining ones, that of the co-heirs and the emphyteutic. For its part, the right of first refusal and rental withdrawal is regulated in the Urban Leases Law, as we will see below.
What is the right of first refusal and withdrawal in a rental contract?
The right of preferential acquisition with respect to a rental is regulated in article 25 of the Urban Leasing Law. This is a tenant’s right that is divided into two:
Right of first refusal
Grants the tenant the right to acquire the property they have leased. The period for this is 30 days from when the owner informs you of the decision to sell. In this case, therefore, in order to exercise the right of first refusal, three requirements must be met:
– It must be exercised within 30 days from receiving the notification to sell the property.
– The notification must be reliable. That is, there must be evidence of its sending and receipt. Therefore, it is most advisable that it be done through burofax.
– The notification must specify the purchase price and the rest of the conditions of the sale, as well as the location of the property.
Right of withdrawal
In the event that the sale is not notified or any legal requirement has been omitted, the tenant will have the right of withdrawal. For example, if the property is sold for a lower price than what appears in the communication. To understand it better let’s look at an example. It may happen that the owner of the apartment notifies the tenant that he is going to sell for 120,000 euros. Given this, the tenant may not exercise his right of first refusal because the price seems a little high. If, later, he knows that the sale price was 90,000 euros, he may exercise his right of withdrawal. With this, the sale will be undone to be able to buy for the price of 90,000 euros.
The right of first refusal and withdrawal cannot be exercised in one case. This is when the rented home is sold along with the rest of the homes or premises owned by the landlord that are part of the same property. This is the case of an entire building that is owned by a single landlord. But, if there is only one home in the property, the tenant will have the right of first refusal and withdrawal.
Is the waiver clause valid?
At this point we must make a distinction that refers to the date on which the rental contract was signed:
– First, we will talk about the case of contracts signed between January 1995 and June 2013. In these, the clause waiving the right of preferential acquisition is only valid if the initially agreed duration of the contract was greater than five years. This applies to the case of rental housing. In the case of rental for use other than housing (commercial premises, for example), the will of the parties prevailed.
– For contracts signed since 2013, it is possible to include a waiver clause without considering the duration of the contract. The requirement for the resignation to be valid is that it is expressly regulated in the contract. Currently, in fact, section 8 of article 25 of the Urban Leasing Law establishes the following:
8. Notwithstanding what is established in the previous sections, the parties may agree on the lessee’s renunciation of the right of preferential acquisition.
In cases in which such waiver has been agreed, the landlord must notify the tenant of his intention to sell the home at least thirty days in advance of the date of formalization of the purchase and sale contract.
Therefore, it is quite common for the clause waiving the right of first refusal and withdrawal to be included in rental contracts. For said waiver to be valid, it must be expressly agreed between the parties to the contract. Likewise, it must be expressly stated in writing; both the waiver of the application of article 25 of the urban leasing law, and the right of preferential acquisition or right of first refusal and withdrawal. In addition, the landlord will notify the tenant of his willingness to sell 30 days in advance. Finally, it is advisable that the rental contract be granted in a public deed before a notary. In this way, it can be registered in the Property Registry and have effects against third parties.
Right of first refusal and withdrawal of the Generalitat of Catalonia
The Generalitat of Catalonia has a right of first refusal and withdrawal in certain sales that must be taken into account. This right exists when the property to be transferred has been acquired through a foreclosure process; an extrajudicial execution process; a debt compensation between creditor and debtor or a dation in payment.
In these cases, the seller must notify the Housing Agency of Catalonia of the sale of the home. This will have a period of two months to exercise the right of first refusal. If you do not communicate anything, it is considered that you renounce the exercise of the right. If the notification is not made or is made with some defect, the administration will have the right of withdrawal.
What happens if the waiver clause does not appear in the contract?
It may happen that the rental contract does not include a clause waiving the right of first refusal and withdrawal. In that case, the tenant will have that right, but it may happen that they decide to renounce it because they have no intention of buying. In this case, you can make a reliable notification to the landlord in which you expressly waive your right of first refusal and withdrawal. In this way, the owner of the property can sell it freely. Another option is for the tenant to go to the notary’s office on the day the property is sold and expressly waive the right of first refusal and withdrawal.
Model clause for waiver of the right of first refusal and withdrawal
The preparation of a model clause waiving the right of first refusal and withdrawal is simple. For example, the following text may be included in the rental agreement:
The lessee expressly waives the application of article 25 of the Urban Leasing Law regarding the right of preferential acquisition and the rights of first refusal and withdrawal regulated therein.
Notwithstanding the above, in the event of the sale of the rented home, the lessor must reliably inform the lessee of his intention to sell the property 30 days in advance of the date of formalization of the sale.
As a result, it is important to know all of the tenant’s rights in a rental agreement. Likewise, it is necessary to correctly regulate the clause waiving the right of first refusal and withdrawal; so that it is valid in the event of the sale of the property. This is true whether it is a home, a business premises or an office, for example. To do this, you can count on the help of an expert lawyer in real estate law and a real estate consultant. They will advise you and draft the resignation clause.
Rights and obligations of
lessor and lessee
