THE JERUSALEM INSTITUTE OF JEWISH LAW
Rabbi Emanuel Quint, Dean

Lesson # 346 (part three) •Right of First Refusal
At the end of the last lesson there were listed some of the exceptions to the exercise of the right of first refusal.

We continue with other exceptions.

Sale to a minor:
The law of the right of first refusal does not apply if Reuven sells his land to minor orphans. The reason for the right of first refusal is that Levi, the purchaser, can just as easily purchase a piece of land somewhere else and Shimon the contiguous neighbor, will gain if he purchases the land and develops it as part of the land that he already owns. In the case of a minor orphan purchaser this reason does not prevail since minor orphans are not required to search for land in another place. Orphans who are not minors or minors who have a father are also not exempt from the law of right of first refusal, and Shimon may take the land from them upon paying to them the purchase price.

There is an opinion that holds that if the seller (the role of Reuven) is a minor or a woman, the law of the right of first refusal does not apply. For example, Sarah (or Reuven, an orphaned minor) sells land to Levi, then Shimon cannot exercise a right of first refusal.

Sale to a Woman
The law of the right of first refusal does not apply if Reuven sells the land to a woman who is a widow of a divorcee, or even a married woman purchasing the real estate with her own funds over which her husband does not exercise control. [The reason for the right of first refusal is that Levi, the purchaser, can just as easily purchase a piece of land somewhere else and Shimon, the contiguous neighbor, will gain if he can purchase the land and develop it as part of the land that he already owns. In the case of a woman this reason does not prevail, since women are not required to search for land in another place.] That the right of first refusal cannot be exercised by the neighbor if the purchaser is a woman applies even if the neighbor is a woman or minor orphan. However, Beth Din must be convinced that the purchase by the woman is with her own independent funds, and is not really a purchase by her husband to circumvent Shimon’s right of first refusal.

Tenants
For many purposes in halacha, a tenant is treated as a purchaser of the land of the owner for the period of the lease. Assume that the landlord is Reuven and the tenant on the land is Aaron, and Shimon is the owner of a contiguous piece of land. Various questions arise in the following fact situations:

(1) If Reuven sells the land to Levi, a person who does not own land contiguous to Reuven’s land, does Aaron have the right of first refusal against such sale?
(2) If Reuven sells the land to Aaron, does Shimon have the right of first refusal?
(3) If Shimon sells his land, does Aaron have the right of first refusal regarding Shimon’s land?
(4) May Shimon exercise a right of first refusal regarding the lease and insist that Reuven lease the land to him upon the same terms as the lease to Aaron?

There are those who hold that the law of the right of first refusal does not apply in any event to Aaron, the tenant of the land, and the answer to the first three questions will be that (1) Reuven may sell his land to Levi or Shimon and Aaron cannot exercise a right of first refusal; (2) if Reuven sells his land to Aaron, Shimon may exercise a right of first refusal; and (3) if Shimon sells his land, Aaron may not exercise a right of first refusal.

There is an opinion that Aaron does have the right of first refusal. Thus if Reuven sells his land to anyone including Shimon, Aaron may exercise the right of first refusal, and if Reuven sells the land to Aaron, Shimon may not exercise his right of first refusal. If Shimon sells his land to Aaron, Reuven may exercise his right of first refusal, even against Aaron.

Regarding question (4), here too there are various views, the most prominent being that Shimon may exercise a right of first refusal and Reuven must lease the land to Shimon, if the contemplated use by Shimon will not be more burdensome to the land than the use contemplated by Aaron. For example, Aaron has a family of five persons who will be living as tenants in Reuven’s house, while Shimon has a family of seven who will be living in Reuven’s house. The ages of the children may be a determining factor if there is more wear and tear on the house in the case of Shimon. Beth Din must decide in each case to make the determination of which family will cause more damage to Reuven’s house.

Gentiles
Levi purchases or leases land from a Gentile. Shimon the contiguous owner may not exercise a right of first refusal. Assume that Reuven sells his land to a Gentile. Shimon, the contiguous owner, may not exercise a right of first refusal. Or assume that Reuven has land between Shimon and a Gentile. Reuven sells his land to Levi. There is an opinion that Shimon may not exercise a right of first refusal.

Heirs of Purchaser
Reuven sells his land to Levi. Before Shimon has the opportunity to exercise his right of first refusal, Levi dies, and his land is left to his heir Yehuda. There are authorities who hold that Shimon may exercise his right of first refusal against Yehuda and some authorities hold he may not, since it was not Yehuda who acted against the interests of Shimon. Even according to the latter opinion, if Yehuda sells this land to Yissacher, Shimon may exercise his right of first refusal against Yissacher.

Charities
Reuven donates his land to charity. Shimon may not exercise his right of first refusal, even if he offers to substitute other land in another place that is appraised to be worth more that the land donated by Reuven. The reason is that Reuven wants people to know that he donated this land. If the land is exchanged by Shimon for and land in another place, Reuven’s friends may not remember that he donated the land to charity.

IYH, in the next lesson, how and by who may the right of first refusal be exercised.

The subject matter of this lesson is more fully discussed in volume V chapter 175 A Restatement of Rabbinic Civil Law by E. Quint. Copies of all volumes can be purchased via email: orders@gefenpublishing.com and via website: www.israelbooks.com and at local Judaica bookstores. Questions to quint@inter.net.il

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