San Jose, CA asked in Business Law, Civil Litigation and Real Estate Law for California

Q: Right if first refusal in our lease agreement was not provided with the actual property price.

We (Tenant) have a gas station on a commercial property with another business and a couple residential rentals on it. Our landlord provided Us with a first right of refusal letter that showed a price of 1.3 million. We later found out the property was sold for 900k through escrow. We never received this notice of the new price, that we could have afforded to buy the property vs the 1.3 million. Can we sue on this matter after the property was already sold?

1 Lawyer Answer
Joshua Kroot
Joshua Kroot
  • Los Angeles, CA
  • Licensed in California

A: In general, if you otherwise have a claim under the right of first refusal clause, you should be able to sue after the sale has already taken place. Depending on how the sale was structured, it may or may not be difficult to get it essentially reversed so that you are able to purchase the property. If you are unable to get it reversed, you may still be entitled to money damages, but you may have to prove those up using an expert. Alternatively, some contracts already set a default damages amount within them (so called “liquidated damages”), so that you would not have to prove them up separately. Your best bet is to have a lawyer review the contract and the facts surrounding the sale, and advise you as to whether you have a claim and if so, what remedy you’re likely to be able to achieve at trial if you sue. Depending on the circumstances you may also be able to reach a settlement with the current seller and/or buyer without going all the way to trial, and a lawyer can advise on this as well.

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