Right of First Refusal for Tenants on Sale of Property in Delhi

Source: Model Tenancy Act, 2021, s. 23; some state Rent Control Acts (e.g., Delhi Rent Control Act 1958, s. 54A)

Reviewed by the Commoner Law Editorial Team. Sourced from Indian central (Union) law — Constitution of India, central Acts of Parliament, and Supreme Court decisions. State-level information reflects each state's own Acts and High Court rulings. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards

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 to Do If Your Landlord in India Sells Without Offering You First Refusal

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.

Delhi Law

How Delhi differs from central law

The right of first refusal for tenants in Delhi operates primarily under the Delhi Rent Control Act, 1958 and general contract law principles.

Under the Delhi Rent Control Act, a tenant in lawful possession has strong security of tenure, which effectively gives them a practical advantage if the property is sold — the new owner inherits the tenancy and cannot evict the tenant except on statutory grounds under Section 14.
There is no express statutory right of first refusal for tenants in Delhi, but the Transfer of Property Act, s. 108(j) provides that a lease is not terminated merely by the transfer of the landlord's interest — the new buyer takes the property subject to the existing tenancy.
For DDA flats, DDA's own regulations restrict transfer and resale, and sitting allottees may have preferential rights under DDA policy when flats are converted from leasehold to freehold.
In cooperative group housing societies in Delhi, the society's bylaws often grant existing members or the society a right of first refusal before a flat can be sold to an outsider.

Additional Steps in Delhi

Check your lease agreement for any first-refusal clause. For DDA properties, consult the DDA office at Vikas Sadan regarding transfer and freehold conversion policies. For cooperative society properties, review the society bylaws and consult the Registrar of Cooperative Societies (Delhi).

Relevant Law: Delhi Rent Control Act, 1958; Transfer of Property Act, 1882, s. 108; DDA (Disposal of Developed Nazul Land) Rules; Delhi Cooperative Societies Act, 2003

Common Questions

When does right of first refusal for tenants on sale of property 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 I do if my landlord in India sold the property without offering it to me first?

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 mistakes should I avoid with right of first refusal for tenants on sale of property?

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.

Right of First Refusal for Tenants on Sale of Property in other states

Same topic, different jurisdiction. Pick the one that applies to you.