Every now and then, a Florida case comes along that quietly clears up a point people argue about way more than they should. This one involves a right of first refusal – something we see all the time in real estate deals – and whether it needs its own separate consideration to be enforceable.
A buyer purchased a parcel, and as part of the deal, the parties signed an addendum giving the buyer the right of first refusal on the neighboring property. Later, when the buyer tried to use that right, the other side said, “No – that addendum isn’t enforceable because there was no separate consideration for it.”
Surprisingly, the trial court agreed.
But the appellate court stepped in and disagreed with the learned trial court.
When a right of first refusal is part of the overall real estate purchase agreement – even if it is in an addendum – the consideration for the main deal can cover both the property and the Right of First Refusal (ROFR). Florida law does not require a separate dollar amount or separate promise unless the parties intended it that way.
The appellate court pointed to something simple but important: the recorded notice of the ROFR said it was granted for “valuable consideration offered and accepted.” That reinforced that the right wasn’t some side handshake – it was part of the bargain.
So what do we learn for those of us working in real estate?
- You do not need to state separate consideration every time you include a ROFR as an addendum to the principal purchase and sale agreement.
- What matters is that the ROFR is clearly part of the deal.
- Recording a notice with intentional language helps avoid the issue.
- Even courts can misread a contract – which is why intentional drafting pays off.
Conclusion: If the right of first refusal is part of a principal purchase and sale agreement, the consideration for the whole transaction usually is consideration for both the principal agreement and the ROFR addendum. This is a reminder that sometimes the simplest reading of a real estate deal is the right one.
The real estate lawyers at Stross Law Firm, P.A. have a strong track record for ensuring that residential and commercial real estate transactions meet the needs of our clients and are free of “issues.” Our real estate lawyers combine business law knowledge with title insurance services in order to avoid extra expenses and help the process go smoothly. Contact us at (813) 852-6500 to schedule a complimentary 30 minute phone consultation.
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