Right of First Refusal for Tenants on Sale of Property
Written in plain language to promote general understanding. This is educational information, not legal advice. Based on Indian central (Union) law — Constitution of India, central Acts of Parliament, and Supreme Court decisions.
Indian Central Law
What is this right?
Under several Indian tenancy laws, a tenant has a statutory right of first refusal if the landlord decides to sell the rented property.
- Model Tenancy Act (MTA), s. 23: If a landlord intends to sell the rented premises, they must first offer it to the tenant at the price they intend to sell to a third party. The tenant has 30 days to accept or decline the offer.
- If the tenant declines (or does not respond in 30 days), the landlord is free to sell to any third party at not less than the offered price.
- If the landlord sells to a third party at a lower price without offering it to the tenant at that price, the tenant can challenge the sale in the Rent Court.
- State laws: Delhi's Rent Control Act provides a similar pre-emption right; some state laws go further, requiring registration of the offer with the Rent Authority.
When does it apply?
- You are a tenant in a property covered by the MTA or a state Rent Control Act.
- Your landlord has informed you they intend to sell the property.
- You discover the property was sold to a third party without your being offered it first.
What should you do?
- When the landlord makes the offer, respond in writing within 30 days either accepting or requesting more time to arrange financing.
- If you wish to purchase, negotiate and execute a registered sale agreement as you would for any property transaction.
- If the property was sold to a third party in violation of your right of first refusal, file a complaint before the Rent Court — the court can set aside the sale or award compensation.
What should you NOT do?
- Do not delay responding to the landlord's offer — missing the 30-day window extinguishes your right of first refusal for that sale.
- Do not assume this right applies automatically without checking whether your state has adopted the MTA or has its own provision.
- Do not conflate the right of first refusal with a right to purchase at any price you choose — you must match the offered price.
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