Right of Pre-emption in Inheritance and Divisions

The right of first refusal in inheritance and property division can make the difference between keeping a property in the family or discovering, too late, that a share has been sold to a stranger. This right allows, in certain situations, an heir or co-owner to purchase under the same conditions that were offered to a third party.

However, preference does not exist in all sales related to an inheritance. It is necessary to distinguish between the sale of an inherited share and the sale of a share in a property that has already been divided. It is also important to understand whether the transfer was made to another heir, a family member, or someone completely unrelated to the inheritance.

This article explains when a right of first refusal exists, who can exercise it, the deadlines, how the sale should be communicated, and what to do when an heir sells without informing the others.

To analyze a sale, prepare a communication, or exercise your right within the deadline, you can use our [services/tools/services]. Probate and inheritance lawyers.

What is the right of first refusal in an inheritance?

The right of first refusal allows a specific person to take the place of the buyer in a sale, provided they accept the same price and conditions.

Imagine that an heir intends to sell their share of the inheritance to someone outside the family. Under certain circumstances, the remaining co-heirs may have priority in the purchase.

The right of first refusal does not allow you to force the seller to lower the price. Nor does it allow you to choose only the most favorable terms of the deal.

Anyone wishing to exercise this right must, in principle, accept:

• The same price.
• The same payment method.
• The same deadlines.
• The same guarantees.
• The remaining relevant terms of sale.

The goal is to prevent third parties from entering without giving other interested parties the opportunity to buy under the same conditions.

Hereditary share and quota of a property are not the same thing.

This distinction is crucial. Before the division of the inheritance, each heir has a share of the estate as a whole. They do not necessarily have an independent percentage of each house, piece of land, bank account, or vehicle.

For example, an heir entitled to half of the inheritance does not automatically own half of each physical asset. They have a claim to the entire inherited estate.

After the division of assets, the situation changes. If a house is assigned to two heirs in equal shares, joint ownership of that property will exist. Each will have a specific share of the house.

Therefore, two different situations may be involved:

• Sale of the inheritance share before the division of the estate.
• Sale of a share in a property after the division of assets.

The rules, documents, and procedures for exercising preference may vary depending on the situation.

To understand the phase prior to the division of assets, please refer to our article on... unpartitioned inheritances.

Is there a right of first refusal in the sale of an inherited share?

When a co-heir sells their share to someone outside the inheritance, the remaining co-heirs may have a right of first refusal, as legally provided.

This means that the seller should not finalize the deal with a third party without allowing the other heirs to purchase under the same conditions.

Example:

• There are three heirs.
• One of them intends to sell his inherited share for 50,000 euros.
• The buyer is a person who is not part of the inheritance.
• The remaining heirs should be informed of the price and essential conditions.
• One of them can exercise their right of first refusal and acquire the share for the same 50,000 euros, respecting the remaining conditions.

What is being transferred is not a specific house. What is being transferred is the heir's position in relation to the entire inheritance.

Therefore, whoever buys a share of an inheritance enters a situation that may involve assets, debts, expenses, litigation, and uncertainty about the final outcome of the division of assets.

Does selling to another heir also grant preference?

Legal preference is particularly linked to the transfer of the inheritance share to people outside the estate.

When the sale is made to another co-heir, the situation is different, because the buyer is already part of the inheritance community. As a rule, the risk that the right of first refusal aims to avoid, the entry of a third party, does not present itself in the same way.

However, one should not analyze only the name given to the contract. An apparent sale to an heir may conceal a different transaction or action on behalf of a third party.

Before concluding that the preference does not exist, the following must be confirmed:

• The buyer's real identity.
• The buyer's relationship to the inheritance.
• The exact object of the transmission.
• The stated price.
• The method of payment.
• The existence of parallel agreements.

The document should be analyzed as a whole, and not just by the designation used by the parties.

What happens after the division?

After the division of assets, an undivided inheritance of a particular property may cease to exist, and co-ownership may then come into effect.

Imagine that a house is awarded to two brothers, each with half. If one of them wants to sell their share to a third party, the other co-owner may have a right of first refusal.

Here, we are no longer talking about selling an inherited share. We are talking about selling a share in a specific asset.

The objective remains the same: to give the co-owner the possibility of preventing a stranger from acquiring ownership of the property.

The co-owner's preference can be especially important when the following are at stake:

• Family homes.
• Rustic land.
• Leased buildings.
• Properties used by only one of the owners.
• Assets with potential for appreciation.
• Properties that are already difficult to manage.

Does the preference apply to any transmission?

No. The right of first refusal is primarily associated with sales and, in certain situations, with payment in kind. Not all transfers are sales.

They may require different analysis:

• Donation.
• Sharing.
• Exchange.
• Judicial adjudication.
• Transmission by will.
• Free transfer.
• The inflow of goods into a company.
• Joint sale of several goods.

Simply changing the name of the contract is not enough to eliminate the right of first refusal. If an alleged donation conceals a true sale, the transaction can be challenged.

On the other hand, it should not be assumed that any transfer allows for the exercise of a right of first refusal. It is necessary to identify the true nature of the transaction.

How should the intention to sell be communicated?

Anyone intending to sell must inform the holder of the right of first refusal of the sale plan and the essential conditions of the transaction.

Communication must be sufficiently thorough to allow for an informed decision.

It must indicate, at least:

• What will be sold.
• Who is the potential buyer?.
• The price.
• The method of payment.
• The relevant deadlines.
• The guarantees required.
• Other conditions that may influence the decision.

A vague message, such as "I'm going to sell my share for a good price," does not allow one to consciously exercise their right of first refusal.

Verbal communication alone is also not advisable. In case of conflict, it will be necessary to prove what was communicated, when it was communicated, and what the conditions were.

A registered letter, a formal notification, or other written means that demonstrates receipt offers greater security.

How much time do I have to respond?

The timeframe depends on the specific situation, the nature of the right, and how the communication was made.

Therefore, anyone who receives a proposal should not keep the letter and decide later. They should analyze it immediately:

• If you really have a right of first refusal.
• If the communication meets all the conditions.
• If you can fulfill the payment method.
• If you need funding.
• If there are other preferred options.
• How should you formalize the response?.

A delayed response may result in the loss of the right.

Simply replying "I'm interested" isn't enough. The statement must be clear and demonstrate the intention to purchase under the communicated conditions.

When in doubt, advice should be sought immediately after receiving the communication, and not after the deadline has passed.

Is it possible to negotiate the price and, at the same time, exercise the right of first refusal?

The right of first refusal means accepting the deal under the conditions offered to the third party. The holder of the right of first refusal may attempt to negotiate, but this negotiation does not replace the formal exercise of the right.

Imagine that the seller announces a sale for 100,000 euros. The heir replies that he will only accept paying 80,000 euros. This response does not, in principle, constitute acceptance of the announced deal.

If the goal is to secure preference, it must be clear that the interested party accepts the conditions presented. Any alternative proposal should be separate from this statement.

The risk of an ambiguous response is that it allows the seller to claim that the right of first refusal was not exercised.

What if there are several interested heirs?

When several co-heirs intend to exercise their right of first refusal, it is necessary to determine how the acquisition will be made.

There may be an agreement between them to:

• Buying together.
• To divide the position acquired.
• One of them will buy and compensate the others.
• To integrate the value into the future distribution.

Without an agreement, the legal rules relevant to competition between preferred bidders apply.

The key is to act within the deadline. Internal discussions should not prevent you from missing the opportunity to respond to the seller.

It is also advisable to define this in writing:

• Who pays the price?.
• In what proportions?.
• Who pays the taxes and expenses?.
• What will happen to the acquired position?.
• What is the impact on future sharing?.

What happens if the heir sells without informing the owner?

When a sale is made without notifying the holder of the right of first refusal, there may be grounds for a right of first refusal action.

Through this action, the preferential buyer seeks to replace the buyer in the transaction, acquiring the sold position under the same conditions.

It's not just about asking for compensation. The main objective may be to take the place of the third-party buyer.

To do this, it is necessary to analyze:

• If there was a right of first refusal.
• If the buyer was actually a third party.
• The date on which the interested party learned about the business.
• The actual price and conditions.
• The sales documents.
• The timeframe available to take action.
• The amount that will need to be deposited or paid.

The timeframes for this type of action are short. Anyone who discovers a sale should not wait for the division of assets to be finalized or for a prolonged attempt at an agreement.

Does the deadline begin on the date of the deed?

The date of the deed is not always the deciding factor.

The timing of when the preferential buyer became aware of the essential elements of the sale can be relevant. It's not enough to know that "the share was sold." It's necessary to have information that allows for the evaluation and exercise of that right.

Still, it's not wise to wait.

As soon as you discover a transmission, you should try to obtain:

• Copy of the contract.
• Registration certificate.
• Buyer identification.
• Stated price.
• Method of payment.
• Date of the transaction.
• Proof of when they became aware.

Saving messages, letters, and emails can be crucial for demonstrating chronology.

Do we have to pay the same price?

Yes. Whoever exercises their right of first refusal must accept the actual price of the transaction and the applicable conditions.

In addition to the price, you may have to bear the following:

• Taxes.
• Costs of deed registration or formalization.
• Records.
• Expenses associated with transmission.
• Amounts that must be refunded to the buyer.

Preference is not a mechanism for buying cheaper.

A conflict can also arise when the stated price does not match the actually agreed-upon value. For example, when part of the payment was made without documentation or when there are ancillary contracts.

In these cases, proving the truth of the transaction can be difficult. Therefore, all available documentation should be gathered.

Does the preference allow one to choose only one item?

In the sale of an inherited share, the object is the position within the inheritance and not each asset individually.

Therefore, the preferential buyer cannot, in principle, say that they only want to keep the part relating to the house, rejecting debts, expenses, or other elements connected to the share.

This is one of the reasons why buying an inherited position requires caution.

Before exercising your right, you should try to understand:

• What assets are included in an inheritance?.
• What debts exist?.
• If there are any omitted assets.
• If there is a will.
• If there are donations subject to collation.
• If any dispute arises.
• If the seller has already received any income or advance payments.

It may be helpful to consult the list of assets in the inheritance and confirm that the assets are correctly identified.

Sale of an inherited house and sale of the share.

The sale of a share of a property should not be confused with the sale of a house belonging to an inheritance.

As long as the property is part of an undivided inheritance, a single heir cannot sell the entire house as if they were the sole owner.

Under certain conditions, you can transfer your inheritance share. But this doesn't mean selling a specific division or a physical percentage of the house.

To sell the entire property, the consent of the person with the legal right to transfer the property will usually be required.

This distinction protects the remaining heirs from business dealings made without their participation.

If there is no agreement about the fate of the house, it may be necessary to move on to... division of indivisible assets or for an inventory process.

Right of first refusal during probate.

When an inventory already exists, the transfer of an inheritance position still produces effects.

The buyer may need to intervene in the process to defend the acquired position. Other interested parties may also need to exercise their rights within the inventory itself or through appropriate legal proceedings, depending on the complexity of the matter.

Sales can influence:

• Identifying the interested parties.
• The notifications.
• The bidding processes.
• The composition of the shares.
• Payment of compensation.
• The profit-sharing agreements.

The inventory should not continue as if the sale had not occurred.

If a lack of consensus is already preventing division, consult our guide on... Judicial division of inheritance.

Preference and turns are not the same thing.

The right of first refusal applies in a sale to a third party.

Compensation for losses arises during the division of assets when an heir receives assets of greater value than their share and needs to compensate the remaining heirs.

Example of preference:

• An heir sells their share to a third party.
• Another heir intends to buy under the same conditions.

Example of turns:

• One heir gets the house in the inheritance.
• The house is worth more than your share.
• The heir pays the difference to the others.

These are different mechanisms, although they can appear in the same family process.

To understand how compensation is calculated in the division of assets, see [link to relevant documentation]. turns in case of inheritance.

Can the tenant also have a right of first refusal?

In certain cases, a tenant may have the right of first refusal in the sale of the leased property.

When joint ownership or inheritance also exists, several potential preferential rights may arise. It will be necessary to analyze which right prevails, taking into account the specific situation and the requirements of each preference.

Before proceeding with the sale of a rented property, the following should be confirmed:

• The existence and duration of the lease.
• The object of the contract.
• The registration status.
• The quota that will be sold.
• The existence of co-owners.
• The necessary communications.

Ignoring a preferred buyer can jeopardize the sale.

How to avoid problems before the sale?

The seller must prepare the process transparently.

Before signing with a third party, it is advisable to:

1. Identify exactly what you intend to sell.
2. Confirm who the preferred account holders are.
3. Gather all the necessary information about the deal.
4. To make a written communication.
5. Grant the applicable legal deadline.
6. Keep proof of the communication and the response.
7. Do not change conditions without further notice.
8. Formalize the sale with proper documentation.

If the price, buyer, or payment method changes significantly, it may be necessary to re-communicate the transaction.

It is not safe to make an offer and then sell to a third party for a lower price or with more favorable terms.

What should someone do who intends to exercise their right of first refusal?

The person receiving the communication must act in an organized manner.

Before the list, an essential note: informal interest is not the same as the valid exercise of a right.

The recommended steps are:

1. Record the date of receipt.
2. Analyze the object of the sale.
3. Confirm that you have preferential rights.
4. Check price, deadlines and conditions.
5. Assess the assets and liabilities involved.
6. Confirm financial capacity.
7. Respond in writing within the deadline.
8. Keep proof of sending and receiving.
9. Prepare the payment and formalize the transaction.
10. Take legal action if the sale is made in violation of the law.

The response must be clear, complete, and consistent with the communicated conditions.

Common mistakes regarding the right of first refusal.

Conflicts often arise from mistakes that could have been avoided.

The most common mistakes are:

• Confusing an inheritance share with a share of a property.
• To communicate only verbally.
• Omitting the buyer's identity.
• Do not specify the payment method.
• Change the conditions after communication.
• Simply reply that you are "interested".
• Attempting to negotiate without formally exercising the right of first refusal.
• Let the deadline expire.
• Discovering the sale and waiting too long to act.
• Not raising enough money to fulfill the deal.
• To assume that any donation allows for preferential treatment.
• Ignore other legal preferences.

An error in form or deadline can cause the loss of the possibility of acquiring the asset or share.

When should you seek legal advice?

Legal support is especially important when:

• An heir intends to sell his share.
• The sale was completed without prior notice.
• There are doubts about the deadline.
• The buyer is a relative of another heir.
• The stated price seems unrealistic.
• There are several preferences.
• The inheritance includes real estate and debts.
• There is an inventory in progress.
• The sale was presented as a donation or exchange.
• It is necessary to proceed with the preferential action.

An early analysis can prevent the loss of rights and stop a third party from entering an inheritance already marked by conflict.

Conclusion

The right of first refusal in inheritance and division of assets protects co-heirs and joint owners when an inheritance position or a share in an asset is sold to third parties. However, this right depends on the type of transfer, the stage the inheritance process is in, and compliance with strict deadlines.

Before selling or responding to an offer, confirm the subject of the transaction, the price, the terms, and the buyer's identity. A hasty decision can make a difficult division even more complex.

If you wish to exercise your right of first refusal, contest a sale, or prepare for the secure transfer of a share, speak to our experts. Probate and inheritance lawyers. For a legal analysis tailored to your case, you can also consult a... Solicitor.