I want to buy a condo, but the condominium association is exercising a right of first refusal.  Is this legal?

 

While we cannot provide legal advice, many local law firms assert that the short answer is, Yes, if their governing documents allow it.

 

Many community associations have specific clauses in their governing documents that allow them to do everything from collect assessments to approving future residents in the neighborhood.   While an association cannot prevent a property owner from selling their property, they often have clauses such as a “Right of first refusal” that allow them to determine whether or not a potential buyer can purchase the property.

 

A right of first refusal is a “a right to elect to take specified property at the same price and on the same terms and conditions as those contained in a good faith offer by a third person if the owner manifests a willingness to accept the offer.”   Meaning, if an owner accepts a buyers offer, the association may have the right to purchase the property with the same terms of the buyer’s offer, thus keeping the buyer from purchasing the property.    In some situations, depending on the language of the associations governing documents, the association can find another buyer instead of purchasing the property.

 

Here is a good link to a reputable community association law firm referencing this issue.   http://wwz-law.com/from-our-wz-qa-can-my-association-disapprove-or-reject-a-prospective-buyer-from-purchasing-a-unit-or-lot/