Do mandatory pre-emption rights apply to the sale of real estate assets in this country?
The state enjoys preferential rights and has first preference in the case of sale, accord and satisfaction or tenure of land granted.
Pre-emption rights are not imposed by statute.
It is possible, as a matter of contract law, for parties to grant pre-emptive rights or first rights of refusal in relation to the sale of real estate.
Depending on the location of the real estate, different regional pre-emption rights may apply (eg in relation to vacant houses, in port areas, on real estate situated in nature reserves, or on real estate located in zones where expropriation is likely) mostly in relation to areas designated for housing or next to public ports. Under certain circumstances, pre-emption rights apply to social housing companies and certain public entities. Real estate that is empty or in decay may also be subject to pre-emption rights.
Yes. Pre-emption rights can exist by law or under the contract.
According to the Rights in Rem Act in the Federation of Bosnia and Herzegovina and the applicable regulations in the Serb Republic and the Brčko District, if the real estate to be sold is co-owned by more than one person, the existing co-owners have a mandatory pre-emption right.
The owner of residential property must offer first refusal to a co-owner or to the holder of any tenancy.
The owner of a business building or premises must offer first refusal to a co-owner or a lessee who has leased the building for more than five years. This is an old law which is not always applied. There are no specific regulations governing the pre-emption rights of multiple lessees.
If a person who has pre-emption rights does not advise the seller of their acceptance of the offer within 30 days, the owner is free to sell the property to someone else, although the seller is not allowed to offer them better terms or a lower price.
In addition, in the Republika Srpska (RS), a municipality also has pre-emption rights to property located in the municipality.
A new Rights in Rem Act in the Federation of Bosnia and Herzegovina was published on 28 August 2013 and came into effect on 5 March 2014.
Pre-emption rights are not imposed by statute. However, property owners can grant rights of first refusal to other parties in relation to the sale of real estate by way of contract. Pre-emptive rights can be registered on title to the property.
Certain pre-emption rights exist under the PRC law when real estate assets are sold:
However, the abovementioned pre-emption rights may be waived by the party holding such pre-emption rights.
Mandatory pre-emption rights apply in case of sale of a flat which is occupied by a 'protected' tenant (usually in old buildings) and in the case of a sale of real estate assets falling into the category of a “cultural monument”. In the first case the protected tenant has a mandatory pre-emption right and in the second case the relevant city and the state have such a right.
There are plans to allocate pre-emption rights to national government and local authorities in relation to certain Croatian islands, and where land is sold following an insolvency.
Yes, but these pre-emption rights apply only in exceptional circumstances. They apply to culturally significant real estate, certain agricultural land and real estate located in environmentally protected areas.
With effect as of 1 July 2020, statutory pre-emption right of the real estate co-owners applies only if: (i) the co-ownership upon a property was established by inheritance or other similar succession so that the will of acquiring co-owners could not reflect upon their position and (ii) the relevant share is being transferred within the period of six months from the date on which the co-ownership was established. Unless the transferor and the transferee are classified as close persons (eg family members – spouses, siblings and direct ancestors) or unless the remaining co-owners of real estate property have pre-emption right in case of sale or donation of the respective share in the property.
Further, there is a specific pre-emption right applicable to structures (typically building) and the land underneath such structures in case the respective owners are different. The owner of the underlying land on which a structure was constructed which did not constitute integral part of the land in the past and have not become integral part of the land since the effective date of the new Civil Code, has a pre-emption right to the structure, and vice versa the owner of the structure has a pre-emption right to the underlying land.
Municipalities and individuals may in some cases have registered a pre-emptive purchasing right or a right to repurchase properties at a certain time and specified price, if this has been agreed with the existing or prior owners of the properties.
If the real estate is a residential property consisting of a minimum of six tenanted apartments, and subject that the property is not converted to freehold flats, the tenants have mandatory pre-emption rights. The same applies to other types of real estate with a minimum of 13 tenanted apartments. The mandatory pre-emption rights are fulfilled by offering the tenants the opportunity to acquire the real estate through a cooperative housing association on the same terms as any other buyer. The tenants’ time for acceptance must be at least 10 weeks (July not included).
Pre-emption rights exist for the benefit of French local government and administrative bodies. There are three pre-emption rights of significance here.
Where the relevant municipal council has exercised its power to implement a legal pre-emption right, the municipality in which the property is located has first call on the property itself or on the shares of the company holding the property where either the majority stake in the company or a minority stake granting the majority stake to any shareholder is sold – provided that the said company is a real estate civil company (société civile immobilière).
This right arises following the filing of a declaration of intent to sell (Declaration d’Intention d’Aliéner, DIA) by the owner of the property.
The municipality has two months as from the filing of the declaration of intent to sell to decide whether or not it will pre-empt – this two-month period can be extended if the municipality requires additional information or asks to visit the property. If the municipality decides to exercise its pre-emption right and purchase it may purchase at the price and conditions proposed in the declaration of intent to sell or make a counteroffer at a lower price/different conditions.
If the authority fails to reply to the notice within the applicable time scale, it is deemed to have waived its right.
An immediate consequence is that investors should account for a 2.5 to 3-month period between signing and closing.
Agricultural organizations (SAFER) have a right of pre-emption over agricultural assets. This allows them to consolidate farmland into larger units if this would be of benefit to the local economy.
In certain limited situations, a sale may be conditional on pre-emption rights granted to tenants of retail or of residential premises.
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. In its decision of 9 November 2021, the Federal Administrative Court (Bundesverwaltungsgericht) also declared the practice of pre-emption rights of the Land of Berlin in social conservation areas to be unlawful. According to this, the far-reaching exercise of pre-emptive rights by municipalities in milieu protection areas with reference to mere (alleged) intentions of the purchasers is inadmissible. 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.
The Building Land Mobilization Act (Baulandmobilisierungsgesetz) came into effect on 23 June 2021. The Act has amended Sec. 28 of the Federal Building Code; notably, the time frame in which the municipalities can exercise their pre-emption rights has been extended to three months (Sec. 28 (2) sentence 1 of the Federal Building Code).
Furthermore, the Building Land Mobilization Act has introduced Sec. 250 of the Federal Building Code, under which the conversion of leased premises into owner-occupied dwellings (home ownership),and consequently the sale of a flat to a third party, in a building with more than five flats in tense residential housing markets according to a statutory ordinance is subject to the approval of the local municipality. The aim of this legislation is the creation of residential accommodation. The statutory ordinance will be passed by the federal states (Länder) and will be valid until 31 December 2025. The federal states are authorized to deviate from the requirement of five flats and can include in the scope of their respective statutory ordinances buildings, which have between three and fifteen flats (Sec. 250 (1) sentence 6 of the Building Land Mobilization Act).
In certain cases, yes. The Hungarian State has a pre-emption right over protected historical, cultural or world heritage buildings, properties located in specifically designated areas having cultural or historical importance or national parks or located in areas designated for the construction of highways. Current occupiers, neighbouring landowners and the Hungarian State (in that order) have pre-emption rights over arable land. Municipalities and third parties are also provided with pre-emption rights by specific national laws and regulations.
When one co-owner of a jointly owned property wishes to sell, the other co-owners have pre-emption rights.
In rare cases mandatory pre-emption rights apply to the sale of real estate assets. Public authorities have pre-emption rights over properties of historical or architectural significance. In addition, agricultural tenants or neighbouring farmers have pre-emption rights over farmlands, provided those certain requirements set forth by the laws are met.
In the case of commercial lease agreements (ie lease agreements for non-residential use) tenants carrying out activities involving direct contact with the public (as users and consumers) have – inter alia – a pre-emption right if the landlord intends to sell the property they are leasing during the term of the lease; in particular, tenants are entitled to purchase the leased premises on the same terms and conditions agreed for the sale to third parties. According to the prevailing case law tenants shall not be granted with such pre-emption right in the case of bulk sale of the leased properties (vendita in blocco). For the sake of completeness, please consider that – according to Law Decree no. 164/2014 (the ‘Decreto Sblocca Italia’) – it is possible to expressly derogate – inter alia – the application of the tenant’s pre-emption right in case the yearly rent agreed between the parties in the lease agreement is higher than € 250,000.
Under the Act for Promotion of Expansion of Public Land, when a seller intends to sell for consideration lands larger than certain areas which depend on the designation of the lands under the City Planning Act, the government has the right to negotiate with the seller to purchase the lands. However, in practice such right is not often exercised.
Yes, certain agricultural tenants (pachters) may have pre-emption rights and local authorities can impose pre-emption rights on a property under the Municipalities Preferential Rights Act. Also, it is possible to agree to create (obligatory) pre-emption rights.
The state grants evinced in the Certificate of Occupancy usually provides that the holder of the title shall not alienate the rights granted within 10 years of the grant and is obliged to first offer the property to the Governor. In practice, upon the sale of real property within the 10-year period of the state grant, an additional fee (about 1.5 % of the value) will apply at registration of the transfer.
Also, by the Acquisition of Lands by Aliens Law, a foreigner who has lawfully acquired interest in a land shall not dispose of same without first offering it to the State Government (Section 2(3) of the ALAL).
In a private sale, the contracting parties may by agreement covenant that a property is not to be sold to a third party without first offering it to the seller on terms as agreed in the document.
In some specific cases, mandatory pre-emption rights may apply. If a property is subject to co-ownership or is part of a housing cooperative, then the co-owners or members of the cooperative have a right of pre-emption.
Under Polish law, a number of pre-emption rights exist. The most important pre-emption rights under Polish law are described below.
The community (ustawowe prawo pierwokupu gminy) has pre-emption rights in relation to real estate appearing in the register of historical monuments or that is designated for public utility purposes (although such pre-emption rights must be disclosed in the relevant land and mortgage register in order to be binding), as well as in relation to undeveloped land that was acquired by the seller directly from the State Treasury or the local authority and in relation to perpetual usufruct right of the undeveloped land irrespective of the form of acquisition of that right by the seller.
National parks, acting for the benefit of the State Treasury have pre-emption rights in relation to real estate located within the borders of the parks.
A tenant has pre-emption rights in relation to agricultural real estate.
The National Agricultural Support Centre has pre-emption rights in relation to agricultural real estate and forests (in some circumstances). The law on suspending the sale of the real properties of the National Agricultural Support Centre, in force since 30 April 2016, extends the pre-emption right of the National Agricultural Support Centre to any agricultural property (with an area of at least 0.3 hectares) and introduces a pre-emption right of the National Agricultural Support Centre in relation to the purchase of shares or stocks in a capital company, which is an owner or perpetual usufructuary of agricultural property with a surface area of at least 5 hectares or agricultural properties with a total surface area of at least 5 hectares . The pre-emption right the National Agricultural Support Centre in relation to the purchase of shares in a commercial company, which owns agricultural property (with an area of at least 5 hectares) is not applied to the sale of the stocks on the stock exchange, the commercial companies or groups of commercial companies operating in the electricity, oil and gas fuels sectors (which assets have been disclosed in the appropriate registers) and to the sale of the shares or stocks for the benefit of the close relatives.
Based on the law on suspending the sale of the real properties of the National Agricultural Support Centre, in force since 30 April 2016, in the case of the changes of the partners in a partnership (ie change of the partner or entering of a new partners to the partnership), which is an owner or perpetual usufructuary of agricultural property with an area of at least 5 hectares or agricultural properties with a total surface area of at least 5 hectares, the National Agricultural Support Centre is entitled to submit a statement on the acquisition of the agricultural real property owned by this partnership for the pecuniary equivalent corresponding with the market value of this real property. The entitlement referred to in the previous sentence does not apply if the current partner is replaced by its close relative as well as if the new partner entering into the partnership is a close relative of the current partners.
The above-mentioned limitations provided for in the law on suspending the sale of the real properties of the National Agricultural Support Centre, in force since 30 April 2016, do not apply to agricultural real properties with an area of less than 0.3 hectares. These limitations also do not apply to agricultural real properties located on the areas designated in the local zoning plans for non-agricultural purposes, as well as to the agricultural real properties with respect to which, according to the status as on 30 April 2016, there were in force final zoning decisions providing for the designation of these real properties for non-agricultural purposes. Moreover, the real properties for which a resolution on localization of housing or associated investment has been adopted or that are being sold for purpose of realization of such investment are exempt from the limitations.
Co-owners of agricultural real estate have pre-emption rights, although these do not apply if the owner wants to transfer his or her share of the property to relatives.
The manager of a special economic zone has pre-emption rights in relation to real estate located in the zone. Under the Anti-Crisis Shield 4.0 bill, introduced to combat the economic consequences of COVID-19, this right has been extended to include State's agricultural property stock properties designated in the local zoning plan for industrial, service or industrial and service purposes, in relation to which the manager performs the property management, while the property is not located within the boundaries of the special economic zone managed by the appropriate manager.
Yes. There are several mandatory pre-emption rights, such as:
For specific situations expressly regulated by Romanian legislation, mandatory pre-emption rights apply:
Any contract for the sale of land located outside the city limits without observing this pre-emption right, or without obtaining the approvals required by the law is forbidden and sanctioned with absolute nullity.
Yes. Pre-emption rights exist under law and under certain contractual arrangements between parties.
Under the Civil Code, if real estate is co-owned by two or more persons, the existing co-owners have a mandatory pre-emption right to buy the share of any owner who wants to sell. This does not apply if an owner wants to transfer his share of the property to relatives. A breach of this pre-emption right by one of the co-owners creates what is called “relative invalidity”. This may be enforced by any co-owners who wish to exercise their pre-emption right within a three-year period from the date the co-owner (invalidly) offered his share to a third party without offering it first to the co-owner concerned.
Pre-emption rights can also be created contractually with specific conditions being included in the purchase agreement.
Pre-emption rights may also stem from special legislation. For example, the Slovak State has a pre-emption right over any real estate classified as being culturally significant, and, under nature conservation legislation, over land in protected areas.
Public authorities have a right of pre-emption in relation to properties of historical, architectural or environmental significance.
Pre-emption rights are regulated by the Spanish Civil Code. Neighbouring landowners have a pre-emption right over rural land of less than one hectare and the co-owners of jointly owned land have a pre-emption right over the other owners' shares. Under the Urban Leases Act, tenants have a mandatory first refusal and pre-emption rights in respect of the property they lease; however, these rights can be waived contractually.
Due to legislative changes, pre-emption rights for municipalities do not apply as of 1 May 2010.
No pre-emption rights apply to the sale of real estate assets.
Pre-emption rights are not imposed by statute in either Abu Dhabi or the Abu Dhabi Global Market free zone.
Pre-emption rights are not imposed by law.
Pre-emption rights are not generally imposed by statute. However, a property owner granting rights to a third party can ensure that the third party is not able to dispose of the property without offering the owner first refusal.
An exception applies in relation to buildings containing residential apartments or flats. If certain statutory criteria are met then a freehold owner cannot sell the building unless it has first offered the building to the owners of the flats, on the same terms. The procedures involved are complex and specific advice should be obtained in each case. Failure to offer the freehold to the flat owners before a sale is a criminal offence.
‘Community bodies’ representing local communities in Scotland have a statutory right to apply to the Scottish Ministers to register an interest to buy real estate. The process is subject to rigorous scrutiny by the Scottish Ministers, and applicants must be able to show that the acquisition is in the public interest and that the real estate will be used for the benefit of the local community for ‘sustainable’ purposes (such as provision of facilities for educational, sports, and other recreational activities). If successful the community body then has a right to buy the real estate at market value when the owner decides to sell. This statutory right (which was introduced under Part 2 of the Land Reform (Scotland) Act 2003) originally applied to rural areas only, but was extended to urban areas on 15 April 2016.
An additional community right to buy was brought into force on 27 June 2018. The ‘Right to Buy Abandoned, Neglected or Detrimental Land’ allows a community body to apply to the Scottish Ministers for consent to purchase (at market value) land deemed by the Scottish Ministers to be ‘eligible’. This right to buy is not a pre-emptive right, and can potentially be used even when the owner of the land in question does not wish to sell. Land will be ‘eligible’ for the Right to Buy Abandoned, Neglected or Detrimental Land if, in the opinion of the Scottish Ministers, it is ‘wholly or mainly abandoned or neglected’ or ‘the use or management of the land is such that it results in or causes harm, directly or indirectly, to the environmental wellbeing of a relevant community’. When a community body applies to exercise this right to buy, the Scottish Ministers must carry out a full assessment of the application and consult with various parties (including the landowner) before deciding whether to allow the purchase to proceed. Before issuing consent, the Scottish Ministers must be satisfied that the community body's plans for the land are in the public interest, and compatible with furthering the achievement of sustainable development in relation to the land.
On 26 April 2020, a further right to buy, called the ‘Right to Buy Land to Further Sustainable Development’ was brought into effect. This allows community bodies to apply to the Scottish Ministers for consent to purchase (at market value) land in their community to ‘further sustainable development’. (Official guidance describes ‘sustainable development’ as ‘an integrated long-term approach to economic, social and environmental issues’.) The Land Reform (Scotland) Act 2016 sets out four ‘sustainable development’ conditions on which the Scottish Ministers must be satisfied before giving consent to a community body wishing to exercise this right to buy. These are:
Once an application is made by a community body for consent to exercise this right to buy, the Scottish Ministers must carry out a full assessment of the application and consult with various parties (including the landowner) before deciding whether to issue consent for the purchase to proceed.
Tenants under certain types of agricultural tenancies can apply to register an interest over the agricultural land allowing them to buy that land if it becomes available for sale. Under recent legislation, the requirement for tenants to register an interest is to be removed, meaning that tenants will have an automatic right to buy the agricultural land (at a price agreed between the parties or by a valuer appointed in accordance with the provisions of the relevant legislation) when the owner decides to sell. The date on which this change will take effect is still to be announced.
The owner of real estate is free to grant pre-emption rights to any third party. The seller would then need to offer that third party the option of buying the property ahead of any other potential buyer.
Pre-emption rights are generally not imposed by statute. However, property owners can grant rights so that a particular party must be offered the property before it is sold to another; for instance, a property owner can grant an adjacent land owner and a landlord may grant its tenant, a right to purchase the fee interest in its property before the property owner sells it to a third party and in some cases a particular class of land (eg former railroad land) may be subject to statutory provisions requiring the land to be offered to certain parties before it is sold to another. Investigation into possible purchase rights should be done as part of due diligence investigations respecting title and survey review and can be addressed through title insurance.
Pre-emption rights are not imposed by statute. This is a matter subject to contract between the parties. For example, where there is a sale of an apartment in a block of residential flats, it may be a condition imposed by the Home Owners Association in the Home Owners Agreement that one owner offers a right of first refusal to other owners in the complex before opening up the sale to members of the public. In an instance such as this, the seller would need to offer the building to the other owners on the same terms and thereafter obtain a written refusal from each of the current occupiers before selling to a third party.
In respect of rural land, the Land Acquisition (Disposal of Rural Land) Regulations provide that the Minister of Lands and Rural Resettlement shall be given the right of first refusal when disposing of rural land. In terms of these regulations, a person would therefore be required to obtain a certificate of no present interest from the Minister of Lands in order to dispose of the rural land.