Under the law, the right of first refusal applies whenever a leased property is put up for sale. The owner must formally notify the tenant, ensuring equal terms compared to third parties.

“The Right of First Refusal is mandatorily applied whenever the property is leased, even without contractual provision,” says Ana Taques, partner at Siqueira Castro Advogados.

According to her, the landlord must inform the price, payment terms, and other transaction conditions. There are, however, relevant exceptions such as swaps, donations, capital contributions, and court decisions.

In practice, compliance with the right depends on technical aspects, particularly the registration of the lease agreement in the property’s registry.

“The Right of First Refusal is respected much more effectively when the agreement is registered,” Taques explains.

Even so, courts often recognize the tenant’s right to damages in cases of non-compliance, even without registration, which keeps legal risk elevated.

More sophisticated transaction structures have created alternatives that, in practice, reduce the scope of the right of first refusal. The most common include swaps and donations; capital contributions; portfolio sales; lack of lease registration; and above-market pricing.

“There are several mechanisms used by owners and investors to circumvent the Right of First Refusal,” the attorney states.

In institutional assets such as corporate office floors and logistics warehouses, the topic gains additional complexity.

“These assets involve structures such as real estate funds and SPVs, with more complex negotiations and higher values. They are often sold in portfolios, which may not interest a tenant occupying only part of the property,” she says.

Ignoring the right of first refusal can generate significant consequences.

“The owner may be liable for damages and may even have the sale annulled, with the return of amounts received,” Taques warns.

The tenant, in turn, may seek adjudication of the property.

“It is possible to request the judicial transfer of the property under the same sale conditions, provided the amount is deposited in court within the legal deadline.”

Litigation is frequent. According to Taques, annulment of sales for non-compliance with the right of first refusal is a recurring topic in courts.

Court decisions tend to be case-by-case, analyzing whether proper notification and equal terms were provided. In general, the trend is to reinforce tenant protection when legal requirements are clear.

In assets occupied by large companies, the right of first refusal becomes a central element in negotiations.

“The right of first refusal is decisive, as it involves protection of the business location, improvements, and property appreciation.”

This factor also directly impacts institutional investor behavior.

“The risk lies in investing time and resources and having the offer matched by the tenant, generating losses from costs already incurred.”

The possibility of exercising the right influences valuation and deal structuring.

“The impact depends on technical, legal, and market factors, and is fundamental to determining fair value,” Taques explains.

In response, the market has sought greater predictability through mechanisms such as lease registration, formal notifications with defined deadlines, penalty clauses, and shareholder agreements.

The attorney issues a warning: “Clauses waiving the right of first refusal in advance are null and void.”

With the professionalization of the sector and the growth of institutional investors, the trend is toward stricter compliance with rules, even as legal engineering remains present.

“Greater rigor seeks to ensure legal certainty and predictability, reducing risks of annulment and disputes.”

At the same time, there is room for flexibility within legal limits.

“Proper compliance with procedures allows transactions to be structured efficiently, without harming the lease,” she concludes.