What is the term for the right of an existing tenant to buy a property before the owner sells it to someone else?

The right of an existing tenant to buy a property before the owner sells it to someone else is known as the Right of First Refusal. This legal provision grants the tenant the opportunity to purchase the property under specified conditions before the landlord can consider other potential buyers.

This right is often outlined in the lease agreement or a separate document, ensuring that tenants have a priority option to buy. The concept stems from the idea of providing existing tenants some level of security and potential investment opportunity, enabling them to solidify their housing situation or take ownership of a property they have been renting.

In contrast to other terms, the Tenant Buyout Option typically refers to arrangements where a landlord offers a tenant cash or incentives to vacate the property. The Preemptive Right, while similar, is often a broader legal term used in corporate and real estate contexts to indicate the right to acquire an asset once it becomes available, but it is not as specifically tied to existing tenants. The Option to Purchase, while also relevant, usually means a formal agreement where the seller has granted an outright option to buy, which may not apply automatically to tenants.