Right of First Refusal and Redemption: The Definitive Guide 2026

The right of first refusal and redemption is a legal concept of great relevance in the field of property law and contract regulation in Spain. It is also known as right of preferential acquisition. Although its operation can be complicated for many, understanding these concepts is essential for those seeking to protect their interests in real estate and commercial transactions. If you are a tenant of a property, you have the preferential right of first refusal and redemption before the seller decides to offer it to the market.

What is the right of first refusal?

The right of first refusal is the right a person has (generally, the holder of a right over an asset) to have priority in the purchase of an asset before any other potential buyer. This right is activated when the owner of the asset intends to sell it. In other words, the holder of the right of first refusal has the opportunity to acquire the asset under the same conditions offered to a third party.

This right is commonly linked to leases, especially in the case of residential rentals. In this context, the tenant has preference over other potential buyers if the owner decides to sell the property they are renting. This aims to protect the tenant, giving them an advantage in acquiring the home they already occupy.

What is the right of redemption?

On the other hand, the right of redemption is the right that grants a person the possibility of recovering an asset they have sold under certain conditions. This means that, if the owner of an asset sells it to a third party, the holder of the right of redemption (the tenant) can choose to recover said asset, paying the buyer the price agreed upon in the sale.

The right of redemption is particularly relevant in situations where co-owners of a property wish to prevent an outsider from affecting the possession of the property. This right, like the right of first refusal, seeks to protect the interests of certain groups of people by offering them a second chance to recover the property.

In the case of leases, the owner might offer unfavorable conditions to the tenant, and then modify them in favor of a third party. If the price offered to the third party is lower than the price offered to the tenant, it is sufficient for the tenant to exercise their right of preferential acquisition. 

What is the difference between the right of first refusal and the right of redemption?

When we refer to the right of first refusal and the right of redemption, we are talking about two distinct but complementary rights. The differences between the right of first refusal and the right of redemption are fundamental and can be summarized as follows:

1. Nature:some text
   • Right of First Refusal: It is a right of preference that is triggered before a sale to a third party. It allows the interested party to purchase the property first.
   • Right of Redemption: It is a right of recovery that is exercised after a sale to a third party has occurred. It allows for the recovery of the property, under certain conditions.
2. When Exercised:some text
   • Right of First Refusal: It is exercised before the sale occurs.
   • Right of Redemption: It is exercised once the sale has taken place.
3. Purpose:some text
   • Right of First Refusal: To keep the property within a specific group of people (such as tenants or co-owners).
   • Right of Redemption: To allow the recovery of the property by the former owner or co-owner.

How does it work?

The tenant has the right of first refusal and redemption, meaning that if the owner decides to sell the property, the tenant has the right to buy it before other external buyers, under the same conditions.

On the other hand, the right of redemption is triggered once the sale has been completed. It is important that the tenant is informed of the sale and the price. The property is recovered by paying the agreed price to the new owner.

The right of first refusal and the right of redemption are distinct but related rights that a tenant holds in the context of the sale of a rented property.

Who has the right of first refusal and redemption?

The right of first refusal and redemption is a right in favor of the tenant that allows them to preferentially purchase the property they are renting, should the owner wish to sell it. It also allows them to challenge the sale if the property is sold to a third party without respecting this preferential acquisition right. In such a case, they must pay the corresponding price. When we talk about the right of first refusal and redemption, we are referring to two distinct, complementary rights.

When can it be exercised?

The right of first refusal is exercised when the property owner expresses their intention to sell it. The right holder must be officially notified before the sale, allowing them to decide whether or not to exercise their right. Furthermore, a co-owner also has a right of first refusal and redemption if another co-owner decides to sell their share without offering them the opportunity to acquire that portion of the property.

The right of redemption, on the other hand, can be exercised within a specified period after the formalization of the sale. This period is usually stipulated by law or in the contract, and may vary depending on the circumstances of the agreement and the type of asset involved.

In other words, the right of first refusal applies before the property sale takes place, while the right of redemption is exercised after the sale has been completed.  

What are the exceptions?

It will not be possible to exercise the rights of first refusal or redemption if the leased dwelling is part of a single property and is sold together with the other apartments or premises belonging to the landlord. Likewise, these rights cannot be exercised when different owners jointly sell all the apartments and premises of the property to the same buyer. In these situations, housing-related legislation may grant the right of first refusal and redemption over the entire property.

Another exception is when the property is in a public auction or is used to settle a debt.

When is the right of first refusal lost?

The right of first refusal, which grants a person preference to acquire a property before third parties, can be lost under various circumstances. Firstly, there can be an explicit waiver by the holder, who clearly and directly expresses their wish not to exercise that right. Furthermore, the non-exercise of the right within the stipulated period also leads to its loss; that is, if the holder does not respond within the assigned time after receiving notification of the sale, that right is automatically annulled. On the other hand, it is important to note that, as established by law, there may be exceptional circumstances that lead to the loss of the right of first refusal, which can vary depending on the specific legal context. These conditions underscore the importance for holders to act promptly and clearly to ensure they retain their right of first refusal and avoid potential issues in purchase-sale situations.

When does the right of redemption expire?

The tenant will exercise the right of redemption when they are not notified or when some of the required conditions are omitted from the notification; also when the purchase price is lower than that notified. Under these conditions, the right of redemption expires within 30 days from the day following notification of the terms under which the sale was made, by delivering a copy of the deed or document formalizing it.

How to know if a property is subject to the right of first refusal and redemption?

To determine if a property is subject to the right of first refusal and redemption, it is advisable to follow several steps. Firstly, if you are a tenant, it is essential Review your lease agreement carefully, lease agreement, as this could include a clause establishing the existence of such a right. In addition to the above, it is important to conduct a review in the Land Registry, as some entries may indicate the existence of pre-emption or redemption rights affecting the property in question. Finally, it is advisable to seek legal advice from a lawyer specializing in real estate law, as this professional can provide the necessary clarity on the specific situation of the property, helping to better understand the rights and obligations that may exist in relation to the property. 

Example of pre-emption and redemption rights

Let's imagine the following scenario:

Manuel is a tenant of a commercial premises owned by Rosario. Rosario decides to sell the premises to a third party, Carlos, for a price of 100,000 euros. According to the lease agreement, Manuel has a right of first refusal. Rosario must notify Manuel of her intention to sell the premises, giving him a period of 30 days to decide whether or not he wants to buy it.

If Manuel decides to exercise his right of first refusal, he has the opportunity to buy the premises under the same conditions offered to Carlos. If Manuel does not respond within that period, Rosario may proceed with the sale to Carlos.

On the other hand, if Rosario has already sold the premises to Carlos and Manuel learns of the transaction, he can exercise his right of redemption within the legally stipulated period, which would also be 30 days, to reclaim the premises, provided he is willing to pay the agreed 100,000 euros.

How to waive pre-emption and redemption rights?

Waiving pre-emption and redemption rights is generally done in the lease agreement; it is a common clause, especially when the tenant has no interest in buying the property, or is not in a position to acquire it. This clause protects the owner and, normally, does not affect the tenant.

Similarly, the buyer of the leased property must respect the current lease agreement and its duration; frequently, they are subrogated to the position of the previous owner. 

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Conclusion 

If you are facing a situation related to the right of first refusal or redemption, we advise you to consult with a legal professional to receive the necessary guidance for your particular case. With good knowledge and advice, you will be better prepared to protect your rights and make the most appropriate decisions in your real estate transactions.