The right of first refusal allows certain individuals or organizations to purchase a property for sale before any other buyer, under the same terms agreed upon with the seller. For example, you may find a buyer for your apartment listed at €800,000, only for the city council to step in and acquire it at the same price. This legal mechanism, often unknown to sellers, can derail a sale at the last moment and delay the process by several months.
How exactly does the right of first refusal work?
The right of first refusal is a preferential right exercised through several legally regulated steps. As soon as a sales agreement or a promise to sell is signed, the notary must send a Declaration of Intent to Sell (DIA) to the holder of the right. This entity then has two months to respond:
- They may decline,
- They may exercise the right and buy at the proposed price,
- Or they may make a counteroffer.
If the holder accepts the price, the sale is automatically transferred to them, and the initial buyer is excluded. If they offer a lower price, the seller can refuse, accept, or withdraw the property from sale.
In case of a dispute over the price, the expropriation judge decides. Key point: silence equals waiver. If no response is received within two months, the sale proceeds normally.
Who can exercise the right of first refusal?
Several entities hold this right.
Most commonly, municipalities exercise their urban preemption right (DPU) to build social housing, public facilities, or protect local businesses. In Paris, this right applies in almost every district.
The State also preempts properties to protect historical heritage or natural areas. For instance, a classified château or a remarkable private mansion may trigger State intervention.
The departments and regions may intervene for specific development projects.
Even tenants enjoy a right of first refusal when their rented property is sold, and farmers can preempt agricultural land they work on.
Which properties are subject to the right of first refusal?
In urban areas, the right applies to built or undeveloped properties located in U zones (urbanized) or AU zones (to be urbanized) as defined in the Local Urban Plan (PLU). Sales of SCI shares giving ownership rights to a property are also covered.
Exemptions include: properties under ten years old (except under reinforced DPU), donations, sales between relatives up to the sixth degree, and sales between co-owners.
Note: in Paris and other major cities, reinforced DPU applies even to recent condominiums. An apartment on Avenue Victor Hugo can be preempted even if it was built in 2015.
How can I find out if my property is subject to preemption?
First, consult your municipality’s Local Urban Plan (PLU), available at the town hall or online. Areas subject to DPU are clearly identified there. The notary will always verify this before preparing any pre-sale agreement.
For luxury or heritage properties, additional checks are required:
- A private mansion in Le Marais? Check if it’s in a protected heritage zone.
- An estate with parkland on the outskirts? Verify if it’s within a designated natural protection area.
A certificate of urban planning, free and valid for 18 months, provides all this information. The peace of mind costs €0, with a one-month processing time.
Can the right of first refusal be circumvented?
No. Any attempt is penalized. For instance, declaring a higher price is a bad idea — the authorities will verify it. The same applies to concealing part of the price through the sale of furniture; if the discrepancy is excessive, it will be reclassified automatically.
Example: you sell your apartment for €1.2 million, but to discourage the city from preempting (as it must pay the declared price), you state €1.5 million in the DIA and privately agree with the buyer that they will only pay €1.2 million.
This common tactic almost always fails. The authorities can request your bank statements, assess the furnishings, and uncover the fraud. Consequences? The city preempts at the actual value (€1.2 million), the sale can be annulled, and you risk fines or even criminal prosecution for falsification.
The only legal options are either to wait for the preemption period (two months) to expire without action or to contact the city beforehand to determine whether it has plans for your area and, if so, negotiate directly.
What impact does it have on sale timelines?
The right of first refusal inevitably extends the process. Expect a minimum of two months between signing the sales agreement and the clearance of the preemption right. If there’s disagreement over price, add six to twelve months of legal proceedings. In the Paris luxury market, where many buyers are international, these delays can derail deals.
Professional tip: include a suspensive clause for non-preemption in the sales agreement. If the municipality preempts, both seller and buyer are released with no penalty. Also allow sufficient time in the final deed of sale — at least three months after the agreement — to safely accommodate the preemption clearance.
The right of first refusal in the luxury real estate market: what are the risks?
Prestige properties often attract the attention of public authorities. A private mansion may become a museum, or a large apartment may be converted into social housing. In Paris, the city regularly preempts properties in upscale districts to preserve social diversity.
To secure your high-end transaction and anticipate preemption risks, Consultants Immobilier and its network of 17 agencies leverage their in-depth knowledge of local urban policies. Our experts advise on appropriate sales strategies and assist you through every step, ensuring a smooth transaction despite the complexities of preemption law.