Although they can be numerous in iterations, a ROFR (pronounced Rōfer) is a contractual clause that enables a third party to step in and purchase and/or lease a property based on what was negotiated between the Owner and a potential buyer/lessee.

As an example, let’s say a tenant leases a building and in that lease, there is a ROFR clause to purchase the property if the owner decides to sell. In a more traditional ROFR scenario, if the Owner puts the building up for sale and negotiates with a potential buyer, upon coming to an agreement, the Owner would be legally obligated to take the negotiated terms and price to the tenant and offer the tenant the opportunity to step in and purchase the property first.