Tenant Protections
Right of first refusal (ROFR)
Also called: ROFR, right of first offer, ROFO
A right of first refusal requires a landlord to offer a tenant the chance to lease adjacent space on the same terms a third party has agreed to, before signing that third party. A right of first offer is the weaker cousin: the landlord must offer the space to the tenant first, but on the landlord's own proposed terms.
Both rights address the same problem, which is a growing tenant that cannot commit to more space today but does not want to be boxed in.
ROFR versus ROFO
- ROFR. Triggered when the landlord has a bona fide offer from a third party. The tenant may take the space on those terms. Stronger, because the terms are market tested, but it fires late and on a short clock.
- ROFO. Triggered when the space becomes available. The landlord states terms and the tenant may accept. Fires earlier and with more warning, but the terms are the landlord's proposal, so it needs a fair market rent mechanism to have teeth.
Many well negotiated leases include both: a ROFO when space first comes available, and a ROFR if the tenant passes and the landlord later negotiates a materially better deal with someone else.
The mechanics that decide whether it works
- Response window. Five business days is common and often too short for a tenant that must run numbers and get internal approval. Ten business days is a reasonable ask.
- All or nothing. Most rights require the tenant to take the entire offered space. If the landlord bundles the adjacent 2,000 feet with 9,000 feet across the building, an all or nothing right becomes unusable. Negotiate the right to take a contiguous portion.
- Terms conformity. The renewal or expansion should be on the lease's existing terms with rent at the offered rate, and the term of the expansion space should be coterminous with the existing lease rather than a separate term.
- Recurring versus one time. A right that is extinguished the first time the tenant declines is worth much less than one that revives each time the space comes available again.
- Conditions. Not in default, original tenant in occupancy, and no assignment are typical. Watch for a condition that the tenant have exercised its renewal option first.
Why it is easy to lose in a redline
These rights are usually in a rider or addendum rather than the lease body. A landlord's second round that adds "provided this right shall be personal to the original Tenant named herein and shall not apply to any assignee or subtenant" is one sentence and it removes the right from any future transaction.
Catch this clause when it changes
CRE Redline pulls every tracked change out of each redline round, ranks it by how much it moves, and keeps contested clauses visible from round to round. Round 1 of every deal is free.
Analyze your first round freeRelated terms
An option to renew gives a tenant the unilateral right to extend the lease for a stated additional term, exercisable by notice within a defined window.
Assignment and subletting provisions govern whether and how a tenant may transfer its lease or hand possession to someone else, and on what conditions the landlord may withhold consent.
A lease abstract is a structured summary of a lease's key business and legal terms — parties, dates, rent schedule, options, and obligations — reduced to a page or two so the deal can be administered without rereading the document.
This page is general information, not legal advice. Review lease language with qualified counsel.