Lesson # 345 (part two) •Right of First Refusal There is a dispute among the authorities regarding the following fact situation: Levi purchases the land from Reuven and before Shimon can exercise his right of first refusal, Levi gives the land by gift to Yehuda. According to some authorities the law of the right of first refusal does not apply to Yehuda, and Shimon cannot exercise his right of first refusal, while according to other authorities the law of the right of first refusal does apply. Even according to the first authority, Beth Din should closely scrutinize to see if the gift from Levi to Yehuda is really a gift since these facts are rather unusual. The law of the right of first refusal does not apply if Reuven sells several parcels of land to Levi, which parcels are not contiguous to each other. Shimon cannot exercise his right of first refusal regarding the parcel that is contiguous to his parcel. Shimon may not exercise his right of first refusal even if he offers to purchase all of the parcels that Reuven sold to Levi. The law of the right of first refusal does not apply if Reuven sells the land to the person from whom he purchased the land. For example, Reuven purchased the land from Naftali. He now resells the land to Naftali or to Naftali's heirs if Naftali is dead. Shimon has no right of first refusal. A person does "what is right and just" when he resells the land to the original owner. However, if Reuven purchased the land from Naftali and then sells the land to Levi, and now Levi sells the land to Naftali, Shimon may exercise the right of first refusal. The law of the right of first refusal does not apply if Reuven sells the land to his son. The law of the right of first refusal does not apply if Reuven sells the land in an emergency situation. Levi will not purchase if he knows that Shimon may force him to sell to Shimon and thus Reuven will not find a ready buyer and he cannot wait until Shimon goes to the bank to obtain funds to purchase. It also does not apply if Reuven must raise immediate cash to pay the tax collectors of the king who will arrest him unless the tax is paid within minutes. Or Reuven must raise immediate cash to bury a close relative. If Levi is wiling to purchase within these few minutes, then Shimon cannot exercise his right of first refusal. The law is the same if Reuven borrows money from Levi in these emergency situations and now wants to sell the land to Jacob to repay Levi. Shimon cannot exercise his right of first refusal against Jacob. However, if Reuven needs money for his business, the nature of the requirement is not enough of an emergency to make Shimon lose his right of first refusal. Merchants very often need cash in a hurry and to have the right of first refusal not apply to those situations will essentially emasculate the law. There is authority that the emergency exception can be extended to any situation when it would require hardship on Levi a member of the community to require him to transfer title to Shimon, the contiguous neighbor. For example, Levi purchases Reuven's house and he cannot find any other place to live. For Shimon the gain is to expand his land to include the land sold by Reuven to Levi. This opinion holds that it is up to the Beth Din to weigh the conflicting interests between Levi and Shimon. Many authorities do not agree and hold that to include this exception would result in emasculation of the law of the right of first refusal. The law of the right of first refusal does not apply in land for land exchanges situations. For example, Reuven exchanges his parcel of land, parcel #1, for a parcel of land parcel #2 owned by Levi. Shimon may not exercise the right of first refusal and acquire parcel #1 from Levi. There is no way that Shimon can give to Reuven a piece of land that is the same as Reuven receives from Levi. Also, Levi would not give up his land except for the land he receives from Reuven. However, if Reuven exchanges his land for an animal or other personal property belonging to Levi, Shimon can have the animal or personal property appraised and pay to Levi the appraised value to acquire the land from Levi. Levi cannot demand that Shimon obtain from Reuven the animal or personal property that Levi gave to Reuven for the land. In this last described situation, Beth Din will be within its rights to suspect fraud, or at least an attempt to circumvent the right of first refusal on the part of Reuven and Levi, since it is unusual for a person to give up land for a animal or personal property. The right of first refusal does not apply against a partner. If Reuven and Naftali are partners in the ownership of the land or joint tenants in the ownership of the land or even partners in another business, Reuven can sell his interest to Naftali. Shimon the contiguous neighbor to the land does not have right of first refusal. In the next lesson, IYH more exceptions to the right of first refusal. Part 2) The subject matter of this lesson is more fully discussed in volume V chapter 1751 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 [The Parshat Sho-f'tim Homepage]
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