How does the Right of First Refusal Work in a 2026 Partition Sale?
Under the Partition of Real Property Act (effective January 1, 2026), the right of first refusal (ROFR) serves as a statutory protection that allows co-owners to acquire another owner’s interest before a public sale occurs. The process follows a specific legal framework:
- Mandatory Appraisal: Before the ROFR can be exercised, the court must order a formal, independent appraisal to establish the property’s fair market value. This ensures the buyout price is grounded in objective market data.
- The Purchase Period: Once the appraisal is finalized, co-owners are typically granted a window of 30 to 90 days to review the valuation and decide whether to exercise their buyout rights.
- Formal Notice and Payment: To exercise the ROFR, a co-owner must submit a formal buyout notice and arrange for payment based on the USPAP-compliant fair market value determined by the appraiser.
- Public Sale Contingency: If no co-owner exercises the right of first refusal within the court-mandated period, the property will proceed to a public auction, which is often subject to a minimum bid set by the court.
- Confirmation Hearing: After the ROFR period expires, the court holds a confirmation hearing to finalize the sale process, whether to a co-owner or the highest bidder at auction.
This statutory right is mandated by law and generally cannot be waived without court approval.
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