In the context of the Illinois Condominium Property Act, the “right of first refusal” refers to a provision that allows the condominium association or existing unit owners the right to purchase a unit before the owner sells it to an external third party. Details of this right are outlined in Section 30(e) of the Illinois Condominium Property Act, though each association’s governing documents may have its own rules and regulations related to the right of first refusal (ROFR). Be sure to check if your Chicago HOA has a ROFR clause in your governing documents.
How the Right of First Refusal Typically Works
The purpose of the right of first refusal is to allow the condominium association or existing unit owners to maintain some control over who resides in the community. One reason an HOA may enact it is to ensure that the units are sold within a certain price range so as to preserve property values.
Here’s how the ROFR typically works:
- Intent to Sell: When a condo unit owner decides to sell their unit, they must first notify the condominium association or the existing unit owners, depending on the specific provisions outlined in the association’s bylaws or the Illinois Condominium Property Act.
- Offer to Condo Association or Unit Owners: The unit owner presents an offer to sell the unit to the condominium association or existing unit owners. This offer is often made at the same terms and conditions as those offered by a prospective external buyer.
- Decision by Condo Association or Unit Owners: The condominium association or existing unit owners then have a specified period to decide whether they want to purchase the unit at the offered price. If they choose not to, the unit owner can proceed with selling the unit to an external buyer.
It’s important to note that the specific procedures and timelines for exercising the right of first refusal can vary and should be clearly defined in the condo association’s bylaws. If you have questions or concerns about the ROFR, contact your board. And to learn more about condo association management in the greater Chicago area, please contact us at First Community Management.