Right of First Refusal: What It Means if a Condo Board Can Block Your Purchase (and How Often It Happens)
Quick Summary
- ROFR lets an association match your contract, not negotiate new terms
- Timelines and notice steps live in the declaration and bylaws, not vibes
- Most ROFRs are waived, but you must calendar the decision window
- Overly restrictive transfer rules can shrink financing options and buyers
Why ROFR matters in South Florida luxury resales
In the ultra-premium condo market, the most expensive surprises are rarely design-related - they’re procedural. One clause in a condominium’s governing documents can change the tempo of a closing, the certainty of a deal, and the leverage each party feels at the negotiating table: the right of first refusal, commonly shortened to ROFR.
At its core, ROFR is a contractual right that allows a designated holder to match a bona fide third-party offer after an owner decides to sell. The seller is not required to sell until there is an actual offer in hand, and the ROFR holder cannot “shop” the unit on its own. The right activates only when there is a signed deal to match.
For South Florida luxury buyers, ROFR is rarely the headline risk. The real exposure is timing and documentation. High-end transactions often involve coordinated asset movements, international parties, and nonstandard closing mechanics. A missed notice requirement or a misread decision window can create friction that is entirely avoidable.
ROFR vs. “board approval”: a crucial distinction
Many buyers arrive with a co-op mental model: the idea that a board can simply approve or reject a purchaser. In a condominium, that is generally not the power structure. Condo associations are typically constrained from imposing absolute restraints on an owner’s ability to sell. As a result, many condos use the narrower tool of ROFR rather than open-ended buyer rejection.
That distinction matters because it defines what is reasonable to request - and what is unlikely to be enforceable. A condominium ROFR is typically grounded in the declaration and bylaws, not an informal “board approval” concept. If the documents grant a ROFR, the association can either waive it or exercise it, strictly as written.
Put simply, ROFR should not be a moving target. It is a defined mechanism. The association’s role is not to renegotiate your deal; it is to decide - within the prescribed procedure - whether it will step into the contract you negotiated.
The typical ROFR flow (and where deals get delayed)
While each building’s documents are unique, ROFRs often follow a familiar cadence:
First, the seller receives and accepts a bona fide offer, creating a signed contract. Then the seller delivers that contract to the association in the manner the documents require. The association has a limited period to waive or exercise the ROFR. If it waives, the sale proceeds to the original buyer. If it exercises, the association (or its designee, depending on the language) purchases on the same price and terms.
Two operational realities tend to catch even sophisticated buyers off guard:
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Submission and notice requirements can be formal. “We emailed the manager” may not satisfy a clause requiring delivery to a specified address, officer, or method.
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The decision period is a calendar item, not a suggestion. If the association does not act within the time and manner required, it may waive - or lose - the ability to exercise ROFR for that transaction.
In practice, many associations rarely exercise ROFR and routinely waive it. But buyers should not plan a seamless closing based on “they always waive.” The right may be rarely used and still decisive when it appears.
What a condo board can’t do with ROFR
In luxury sales, leverage often shows up as subtle delay. A common point of tension arises when an association attempts to use ROFR as a pressure point to extract conditions that are not in the governing documents.
ROFR is not designed to be a negotiation tool to add new fees, impose new buyer obligations, or rewrite contract economics. The association’s choice is generally binary: match the deal as written, or waive.
If a building’s culture is to “review buyers,” ROFR can be treated as a proxy for approval. Buyers should resist that conflation. The question is not, “Does the board like me?” It is, “What do the documents actually authorize, and what procedure is required?”
A discreet but effective approach is to have counsel map the ROFR language against the closing timeline and confirm how waiver is issued. In trophy corridors like Miami Beach, where branded inventory draws global attention, formality and precision often produce the smoothest experience. For buyers comparing lifestyle and governance in the same breath, it is natural to weigh properties such as Setai Residences Miami Beach against other oceanfront options while also understanding how transfer provisions may differ by building.
When ROFR gets exercised: the real-world triggers
Because ROFR requires the association to buy on the same terms, exercising it is not costless. It can require liquidity and a clear plan. That alone is a deterrent.
When ROFR is exercised, marketplace commentary often points to a few recurring motivations:
- Preventing a below-market transfer that could influence comparable sales.
- Addressing perceived “problem” transactions from the association’s perspective.
- Steering ownership outcomes in a way the documents permit, such as buying into the association or assigning to a permitted party.
For luxury buyers, the takeaway is not paranoia - it’s preparation. If a deal is unusually priced, unusually structured, or unusually fast, assume the association will scrutinize it more closely, even if only to decide to waive.
Financing and resale: ROFR is usually fine, but transfer restrictions can bite
ROFR itself is not inherently incompatible with financing. Financing concerns arise when transfer provisions become restrictive enough to conflict with secondary market eligibility standards that expect owners to be able to freely convey units.
When a project is considered “non-warrantable,” conventional financing can become more difficult, shrinking the buyer pool and potentially affecting resale flexibility. Transfer controls are one of several elements that can contribute to eligibility issues. In today’s environment, buyers also hear about expanding lender and agency ineligibility lists tied to condo project risk factors. The details vary widely, but the implication is simple: governance, reserves, and legal provisions can show up in your exit strategy.
Even for cash buyers, this matters. Your next buyer may want financing. The most resilient luxury holdings tend to pair design excellence with straightforward transfer mechanics.
Florida nuance: don’t confuse resale ROFR with conversion tenant rights
Florida law includes a specific statutory right of first refusal framework for condominium conversions that gives tenants an opportunity to purchase under defined notice and timing rules. That statutory regime is distinct from the ROFR provisions you typically see in day-to-day condo resales governed by a building’s declaration and bylaws.
For buyers, the practical point is to identify which ROFR you’re dealing with. A resale ROFR is usually document-driven. A conversion context can bring a different set of rules and timelines.
Post-Surfside reality: governance scrutiny, reserves, and transaction psychology
Florida’s condo-law reforms after the Surfside collapse have focused on inspections and reserves. These reforms are not ROFR-focused, but they do affect association budgets and planning. When an association is managing higher reserve expectations and more rigorous building obligations, it can become more procedural about everything, including transfers.
That does not mean your transaction is at risk. It means timelines and document compliance matter more than ever. In premium submarkets, buyers often treat a building’s governance posture as part of the luxury equation, alongside architecture and service. In Miami Beach, that conversation can sit comfortably next to evaluating a residence at The Ritz-Carlton Residences® Miami Beach for its lifestyle proposition while also confirming how cleanly transactions move from contract to closing.
A buyer’s ROFR checklist before you sign
A luxury contract can be impeccably negotiated and still become stressful if ROFR mechanics surface late. Before you go hard on deposits and scheduling, focus on a few items:
- Identify where the ROFR language lives. In many condos, the authority comes from the declaration and bylaws.
- Confirm the trigger: ROFR should activate only after a bona fide offer exists and the owner elects to sell.
- Map the timeline: How many days does the association have to waive or exercise after receiving the contract?
- Confirm delivery requirements: Who receives the contract, and what method of delivery is required?
- Understand proof of waiver: Is waiver automatic after the time expires, or must the association issue a written waiver?
- Coordinate closing dates: Build the ROFR window into your contract milestones, especially for international wire timing.
For buyers prioritizing quiet oceanfront living where inventory is limited, a building’s administrative elegance can matter almost as much as the floor plan. That is one reason some shoppers compare newer boutique offerings such as 57 Ocean Miami Beach with larger full-service towers, aligning lifestyle expectations with the predictability of the purchase process.
Deal strategy: how to keep ROFR from becoming leverage
ROFR becomes leverage when one party controls the calendar. Buyers can reduce that risk with disciplined structure:
- Request ROFR language early, not after inspection.
- Negotiate contract timelines that explicitly account for the ROFR decision period.
- Avoid unusual side arrangements that are not clearly reflected in the contract, since ROFR is matched on the same terms.
- Keep communications formal and documented, especially around submission and confirmation of receipt by the association.
If you are purchasing in a service-heavy environment, you may also be weighing the broader rules that shape ownership experience, including leasing policies and guest protocols. In certain branded contexts, the residence itself is only one part of the proposition, as seen in club-adjacent offerings like Casa Cipriani Miami Beach, where the governance framework and hospitality DNA can influence everything from arrival experience to resale positioning.
FAQs
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What is a right of first refusal (ROFR) in a condo? It is a contractual right allowing the association to match a third-party purchase offer and buy on the same terms.
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Is ROFR the same as a condo board approving or rejecting buyers? Not typically. Condos often lack broad buyer-rejection power and instead rely on ROFR as a limited mechanism.
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When does ROFR get triggered? It is usually triggered only after the owner decides to sell and receives a bona fide offer memorialized in a contract.
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How long does an association have to exercise ROFR? The timeline is set by the declaration and bylaws; if the association does not act as required, it can waive the right.
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Can the association change my contract terms if it has ROFR? Generally no. ROFR is meant to be exercised by matching the same price and terms, not adding new conditions.
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Do condo associations actually exercise ROFR often? Many associations rarely exercise it and commonly waive, but buyers should still plan for the decision window.
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What happens if the association exercises ROFR? The association (or a permitted designee) purchases in place of the original buyer on the same contract terms.
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Does ROFR affect financing? ROFR alone is usually not the issue; overly restrictive transfer provisions can contribute to limited financing options.
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Where should I look to find ROFR rules for a building? The declaration and bylaws typically control the procedure, timing, notice method, and waiver mechanics.
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Should ROFR change how I set my closing date? Yes. Your contract timeline should account for the ROFR submission and decision period to avoid preventable delays.
For a confidential assessment and a building-by-building shortlist, connect with MILLION Luxury.
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