Tenant's Right of First Refusal Wasn't Triggered Because Transfer Wasn't a Sale

A lease gave the tenant a right of first refusal to buy the property if the owner either got an offer to buy the property or made an offer to sell it. The owner transferred ownership of the property to its sole shareholder for $60,000. The tenant sued the owner for failing to give it an opportunity to exercise its right of first refusal before the transfer occurred.

A Pennsylvania appeals court ruled that the tenant's right of first refusal wasn't triggered because the transfer wasn't a sale. The court said that to qualify as a “sale,” the transfer had to meet four criteria, which it failed to do because the transfer wasn't to a “stranger to the lease.” Rather, it was to the shareholder who was mentioned in the lease and, in fact, had signed the lease on the owner's behalf, the court explained [Lehn's Court Mgmt. LLC v. My Mouna, Inc.].