Dean Heller Published in The Real Estate Finance Journal
"A Refusal You Should Not Offer"

Dean Heller's article "A Refusal You Should Not Offer," was published in the Summer 2009 issue of The Real Estate Finance Journal. His article discusses the right of first refusal, which is a contractual right that gives its holder the option to enter a business transaction with the owner, according to specified terms, before the owner is entitled to enter into that transaction with a third party. According to the article, "Viewed logically, a right of first refusal seems an easy concession for a property owner to make. However, in larger commercial property transactions, a right of first refusal can quickly turn deal-lethal when wielded by a refuser relentlessly pursuing his own advantage, whether it be to force a buy-out of the right, to acquire the property at a discounted price or to gain another undue benefit."

In the article, Dean outlines the issues associated with the right of first refusal and advises property owners of the risks. For instance, Dean warns that the right of first refusal on the sale of real property is usually not a deal-breaker for the requesting party, but in many instances it ought to be one for the party asked to grant the right. Dean recommends that property owners and their lawyers should do their best to say no to the initial, and even repeated, demands for the right. He concludes that "only where there is compelling reason for the request should it ever be granted and then only if the grantor received adequate additional compensation for the right."