Legal Alert

Prince George’s County Poised to Increase ROFR Activities

February 25, 2020

The Department of Housing and Community Development (DHCD) of Prince George’s County in Maryland is reviewing numerous responses it received from developers on its recent Request for Qualifications (RFQ). The RFQ seeks to identify developers that can serve as assignees or designees to exercise the County’s right of first refusal (ROFR).

Prince George’s ROFR law has been in place since 2013, with very little transactional interference or ROFR exercise by the County. This appears to be changing. 

The existing ROFR law provides that when the seller of a multifamily rental property executes a contract to sell the property, the seller must provide a ROFR, the contract, and a variety of property-specific information to DHCD. Upon receipt of the ROFR, DHCD has seven business days to provide an initial evaluation as to whether it will exercise the ROFR. Any ROFR exercise by DHCD must be on substantially the same terms and conditions as the third-party contract, provided that DHCD is entitled to a statutory financing contingency. The law permits DHCD to assign its ROFR to a nonprofit, governmental agency, tenant organization, or other third-party entity. That appears to be the County’s intent with the RFQ.

Investors seeking to buy or sell multifamily properties in Prince George’s County should be aware of the County’s new objective to utilize the RFQ tool as part of the ROFR process.

Ballard Spahr's Real Estate Development and Transactions Group has represented numerous buyers and sellers in Prince George’s County ROFR matters since the law was enacted. Our lawyers can assist parties in preparing contracts that address potential ROFR complications and in developing creative approaches to address the various interests at play.

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