REALWorld Law

Sale and purchase

Mandatory pre-emption rights

Do mandatory pre-emption rights apply to the sale of real estate assets in this country?



Municipalities may have mandatory pre-emption rights under the federal building code, the nature conservation law, the historic preservation laws or other laws of individual states. Where this is the case, the municipality is entitled to replace the buyer in the purchase agreement, subject to the same purchase price. The municipality must be informed when a purchase agreement is concluded. While such pre-emption rights arise frequently, in practice they are exercised only on rare occasions. Tenants of residential real estate also have a mandatory pre-emption right in the event of a sale of condominium ownership, if their lease contract was already in existence when the condominium ownership was established.