ROFR to Purchase in Leases

Just wanted to put this out there because I believe it is extremely unethical to include this clause in a lease. If you are a mineral owner and receive a lease offer, at the very least you should ask to strike the Right of First Refusal to purchase clause. Any Lessee that includes this won’t think twice about removing it yet they continue to slip it in there because they know owners will sign.

The issue is, if you ever wanted to sell, this gives you little to no negotiation power because all they have to do is match the offer. They don’t even have to beat it. This deters most groups completely from even making an offer because it would likely be a waste of time. In turn, that depresses the value of your property and makes it an extremely unfair bidding process, leaving you will essentially 1 potential group you can sell to.

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Thanks for highlighting this. You are 110% spot on. A Right of First Refusal is an incredibly de-valuing encumbrance to a mineral interest. Only the uninformed fall for this - but I’m afraid there are a lot of uninformed…

If you think education is expensive, try ignorance.