Information & Instructions: First Right Of Refusal For Purchase Of A Real Property
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1 Information & Instructions: First Right Of Refusal For Purchase Of A Real Property 1. First Right of Refusal is frequently used in order to obtain the right to purchase a particular property at a predetermined price for the terms and consideration stated in the agreement. 2. The agreement affords the holder the right to purchase the property but does not require the purchase. 3. It is thus more flexible than an earnest money contract. An earnest money contract typically requires the holder to consummate the purchase or forfeit the earnest money. 4. Furthermore, an Earnest Money Contract typically provides for specific performance, which could require the holder to consummate the purchase notwithstanding a breach of the Agreement. 5. The First Right of Refusal, on the other hand, does not require the holder to consummate the purchase and typically is not subject to specific performance.
2 Form: First right of refusal FIRST RIGHT OF REFUSAL County of For and in consideration of TEN DOLLARS AND NO CENTS ($10.00) and other good and valuable consideration, receipt of which is hereby acknowledged, [names] ("Grantor") hereby grants to [names] ("Grantee") an irrevocable and exclusive First Right of Refusal to purchase the property listed below on the terms and conditions set forth below. 1. IRREVOCABLE RIGHT 1.1 This First Right of Refusal is irrevocable for the time period during which Grantor shall own, control, or have an interest in the property to which this option applies. 2. TERMS 2.1 First Right of Refusal Terms: At any time that Grantor or any of them, individually or collectively, shall receive or wish to accept an offer made by a third party for the sale, exchange, or other disposition for all or part of the property subject to this First Right of Refusal, either alone or together, then Grantor shall give Grantee written notice of the offer and proposed terms of payment and a copy of any proposal, earnest money contract or other documents in writing that reflect or refer to the proposed purchase or sale price and terms of payment. 2.2 Grantee shall then have an irrevocable option for the period of thirty (30) calendar days, after receipt of the notice, to purchase all or part of the property described below on the same terms and conditions as stated in the notice referred to above. 2.3 The notice shall be sent to Grantee by certified mail, return receipt requested. 2.4 The exercise by Grantee of the First Right of Refusal shall create a binding contract of sale between Grantor and Grantee, and unless the notice of proposed sale expressly provides for inconsistent terms and conditions, the contract of sale created by Grantee's exercise of the option shall be deemed to include the following provisions: a. Grantor shall furnish Grantee (1) a complete abstract of title or title insurance stating and warranting that title is in good and marketable condition; (2) tax certificates showing no delinquent taxes; and (3) a General Warranty Deed to be recorded at Grantee's expense conveying good and marketable title, free and clear of all Liens and encumbrances. b. In the event that an abstract or title insurance company finds objections to the title, the parties may agree to a term during which to cure the title defect. c. Current taxes, insurance, and rents, if any, shall be prorated to the date of closing.
3 d. The First Right of Refusal shall be considered validly exercised when Grantee sends to Grantor a written notice of intent to exercise this First Right of Refusal by certified mail, return receipt requested, within thirty (30) days from the date of Grantee's receipt of the written notice containing the proposed offer or sale. e. If Grantee fails to exercise or refuses to exercise the First Right of Refusal within the thirty (30) day time period, Grantor may finalize the sale, exchange, or other disposition to a third person or persons, on the terms and conditions specified in the written notice sent to Grantee. f. Grantor may not, however, conclude the sale on any material terms or conditions that are inconsistent with the written notice sent to the Grantee. 3. PROPERTY SUBJECT TO FIRST RIGHT OF REFUSAL 3.1 The real property is described as follows: [insert legal description]. 4. NOTICE 4.1 Notice. Notice for the purposes of this Agreement shall be given by sending documents to the addresses set forth below, by certified mail, return receipt requested. 5. GENERAL AND ADMINISTRATIVE PROVISIONS 5.1 Parties Bound. This Agreement shall be binding on and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, successors and assigns. 5.2 Assignment. Neither party shall have any right to transfer or assign that party's interest in this Agreement without the prior written consent of the other party. 5.3 Time Limits. Time is of the essence in this Agreement, and all time limits shall be strictly construed and rigidly enforced. 5.4 No Waiver. Any failure or delay in enforcement of the rights granted by this agreement by either party shall not constitute a waiver of those rights or a basis for estoppel. 5.5 Dispute and Contest. In the unlikely event that a dispute occurs or an action at law or in equity arises out of the operation, construction, or interpretation of this Agreement, the losing party shall bear the expense of the attorney's fees and costs incurred by the prevailing party in the action.
4 5.6 Paragraph Headings. The paragraph headings used in this agreement are descriptive only and shall have no legal force or effect whatever. 5.7 Use of Pronouns. Words of any gender used in this Contract shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. 5.8 Texas Law. This Agreement shall be subject to and governed by the laws of the State of Texas. Any and all obligations or payments are due and payable in [Name of County] County, Texas. 5.9 Severability. If any provision of this Agreement shall, for any reason, be held violative of any applicable law, and so much of the Agreement is held to be unenforceable, then the invalidity of the specific provision shall not invalidate any other provision, and the other provisions of this agreement shall remain in full force and effect unless removal of the invalid provision destroys the legitimate purposes of this Agreement, in which event this Agreement shall be cancelled Entire Agreement. This Agreement represents the entire agreement by and between the parties except as otherwise provided, and it may not be changed except by written amendment duly executed by all parties Date of Effectiveness. This Agreement shall become effective on execution by all parties. Signed on., Grantee County of, Grantor This instrument was acknowledged before me on by. Notary Public,
5 Notary's typed or printed name My commission expires: [or Notary's Stamp] County of This instrument was acknowledged before me on by. Notary Public, Notary's typed or printed name My commission expires: [or Notary's Stamp]
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