Continue with Facebook
Continue with Email
In the competitive landscape of Zimbabwean real estate, the "Right of First Refusal" (ROFR) serves as a critical strategic lever. For developers and long-term tenants, it is often the difference between securing a legacy asset and losing a strategic location to an outside bidder.
The Legal Framework
Commonly referred to in legal circles as a right of pre-emption, the ROFR is a personal contractual arrangement. It grants a specific party — the grantee — the priority to purchase a property before the owner can finalise a sale with any third party. While a staple in commercial leases and land development agreements, its effectiveness relies entirely on the precision of its drafting. Unlike an option to purchase, which allows the holder to initiate the transaction at will, the ROFR is a reactive right. It requires patience and vigilance, ensuring that the holder is positioned to move only when the market dictates a shift in ownership.
The Trigger Event
It is a vital distinction in Zimbabwean law that a ROFR does not grant the holder the power to compel a sale. Under the common law principles often applied in our courts, the right remains dormant until the owner decides to sell and receives a legitimate, bona fide offer. This 'trigger point' is the moment the owner’s freedom to contract is restricted. The owner's obligation only arises once they have reached a stage where they are prepared to accept a specific offer from a third party. At this juncture, they must pause their external negotiations and turn to the right-holder with the same terms. For developers, this ensures that high-value subdivisions or agro-residential projects remain within the control of those who have already invested in their potential.
Matching the Terms
The Price of Priority: Once the owner receives an outside offer, they are legally bound to notify the right-holder of the exact terms. To exercise the right, the holder must generally match the price and conditions of that third-party offer precisely. Zimbabwean courts typically enforce a strict interpretation of these terms; if the holder cannot meet the price or fails to respond within the stipulated notice period (often 14 to 30 days), the right lapses for that specific transaction. This mechanism prevents the owner from being held hostage by a right-holder who cannot perform, while simultaneously protecting the holder from being 'sold out' behind their back.
Registration and the Bona Fide Risk
The primary risk associated with the ROFR is the 'Bona Fide Purchaser' — an outside buyer who acquires the property in good faith without knowledge of the pre-emption right. If an owner sells to such a buyer, the sale may be difficult to reverse once the transfer is registered in the Deeds Office. To safeguard these interests, particularly in multi-hectare subdivisions or long-term commercial developments, it is highly recommended to register the right against the property’s Title Deed under the Deeds Registries Act. This registration provides 'constructive notice' to the world, legally ensuring that any prospective buyer is aware of your priority status. Without this, the holder is often left with only a claim for damages against the seller, rather than a claim to the land itself. Strategic Drafting for Investors To ensure a ROFR is more than just 'ink on paper,' practitioners must focus on specificities. Clarity on notice periods, the definition of a 'bona fide offer' and the inclusion of clauses that account for corporate transfers or inheritance are essential. In Zimbabwe's current property climate — marked by a surge in subdivision interest and agro-residential demand — having an ironclad ROFR isn't just good legal practice; it is a fundamental component of asset management. Certainly, the value of the 'first move' can only be realised if the legal foundation is built to withstand the pressures of a shifting market.
