What does pre-emption right mean?

Show notes

The pre-emption right, also known as the right of first refusal, is a legal tool in real estate that grants a third party, such as an individual, organization, or city, the opportunity to purchase a property before it is offered to another potential buyer. This right typically applies in scenarios like conservation areas or condominium conversions.

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However, certain cases, such as buying the property for personal use, may exclude the pre-emption right, and the regulations surrounding it are intricate and should be examined by a legal expert when necessary.

To determine if the right of first refusal applies to a property, consulting with a notary is crucial, and obtaining this information early is essential for informed decision-making. It is advisable to confirm with the current tenant whether they plan to exercise their privilege before the notary appointment to avoid surprises.

Despite the complexity, avoiding real estate with a pre-emption right is not necessarily recommended. In fact, it can present an attractive investment opportunity.