A provision in some condominium declarations that gives the condo corporation the legal right to match an outside buyer's offer and purchase the unit themselves before the sale to the outside buyer can be completed. When triggered, the corporation has a specified time period to decide whether to exercise this right. While uncommon in most GTA condos, it's more prevalent in co-operative housing and some older condominium corporations.
Why It Matters
If your condo has a right of first refusal, it adds a step and potential uncertainty to the selling process. A buyer might make an offer and then have to wait to see if the condo corporation decides to match it. As a buyer, be aware that your accepted offer isn't final until the corporation waives its right. Check the declaration and status certificate to know if this applies.
Real-World Example
You find a one-bedroom unit in a small co-op-style condo building near the Annex in Toronto listed at $480,000. You submit an offer and it is accepted by the seller. However, the condo declaration includes a right of first refusal clause. The corporation has 30 days to decide whether to match your offer and purchase the unit itself. During those 30 days, you cannot proceed with the transaction. The corporation ultimately decides not to exercise its right, and the sale proceeds -- but the process added a month of uncertainty to your timeline.
Ontario & GTA Context
Right of first refusal provisions are permitted under the Ontario Condominium Act, 1998 and must be set out in the condo declaration. They are uncommon in standard GTA condo towers but more prevalent in co-operative housing conversions and some boutique or heritage buildings. When the right exists, the corporation must follow the specific procedures and timelines set out in the declaration. If the corporation decides to purchase, it must match the full terms of the outside offer, including the price.
How It Works in Practice
If you are buying a condo with a right of first refusal, factor the additional waiting period into your timeline and financing. Your mortgage rate hold and any conditions on your current home sale may be affected by the delay. Your real estate lawyer should review the declaration to confirm the exact process, timelines, and conditions that apply.
Common Questions
How common is right of first refusal in Toronto condos?▾
Can I negotiate around a right of first refusal?▾
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