What is meant by the “right of first refusal”?

The term "right of first refusal" refers to a contractual right that grants an individual or entity the opportunity to purchase a property before it is offered to others. This means that if the property owner decides to sell the property, they must first offer it to the holder of the right—often a tenant or a specific party—on the same terms that they would offer to potential buyers in the open market. This right can provide significant advantages to the holder, as it secures a potential opportunity to buy the property without competing with other buyers, allowing them to evaluate and possibly secure ownership before the property is accessible to others.

In contrast, the other options presented do not accurately convey the essence of a right of first refusal. The concept does not encompass tenant rights regarding rent increases, nor does it solely pertain to leasing agreements or negotiation of sale prices. Rather, it is specifically centered on the priority given to a designated party to purchase property before it is made available to the general market.