Right of First Refusal in Australia: 2025 Guide for Investors & Homebuyers

Right of first refusal (ROFR) clauses are making bigger waves in 2025 across Australia’s property, business, and startup scenes. If you’re buying, selling, or investing, understanding how ROFR works—and the latest policy updates—could give you a crucial edge in negotiations. Here’s what you need to know about this powerful but often misunderstood contract tool.

What Is Right of First Refusal?

At its core, a right of first refusal gives one party (the holder) the option to enter into a transaction before the owner offers it to anyone else. In Australia, ROFR clauses are most common in property sales, business partnerships, and startup investment rounds. If the owner decides to sell or transfer an asset, the holder must be given the chance to match the terms before outside offers are accepted.

• Property: Tenants or adjoining landowners may have ROFR on a property sale.
• Business: Co-owners or partners often have ROFR if one wants to exit.
• Startups: Early investors frequently negotiate ROFR on future funding rounds or share sales.

The clause can be a game-changer—offering security for buyers and leverage for sellers. But it’s not without complexity or risk.

Why ROFR Matters in Australia’s 2025 Market

ROFR clauses are getting more attention in 2025 thanks to a turbulent market and evolving regulations. Here’s why:

• Property market uncertainty: As property prices fluctuate, buyers and tenants want more security. ROFR gives them a ‘first shot’—especially important in tight rental or ownership markets like Sydney and Melbourne.
• Startup boom: With record venture capital flowing into Aussie startups in 2025, early investors are keen to protect their stakes. ROFR clauses in shareholder agreements are now standard, helping founders manage their cap table and avoid unwanted investors.
• Regulatory spotlight: The Australian Competition and Consumer Commission (ACCC) has issued updated guidelines on ROFR use in 2025, particularly for commercial property and franchise agreements, to promote fair competition and transparency.

Case in point: In early 2025, a landmark case in Victoria saw a commercial tenant successfully enforce a ROFR clause, blocking the landlord from selling the property to a rival business. The court’s decision reinforced the need for clear, well-drafted clauses—and has prompted many landlords and tenants to revisit their agreements.

Key Considerations When Negotiating ROFR

While ROFR sounds straightforward, the devil is in the detail. Here are the must-know points for Australians negotiating these clauses in 2025:

• Trigger events: Is the ROFR triggered by any sale, or only specific circumstances (e.g., third-party offers, inheritance, etc.)?
• Notice and response: How much notice must the seller give? How long does the holder have to respond?
• Matching terms: Must the holder match all terms (price, settlement, conditions), or just the headline figure?
• Duration: Is the ROFR valid indefinitely, or for a set period (e.g., 12–36 months)?
• Assignment: Can the ROFR be transferred if the holder sells their interest?
• Legal enforceability: Recent ACCC guidance urges parties to spell out rights and obligations in plain English, minimising ambiguity and future disputes.

Expert tip: In 2025, more deals are including ‘sunset clauses’—expiry dates for ROFR rights—to provide certainty for both parties and avoid indefinite lock-up of assets.

Practical Examples and Emerging Trends

ROFR isn’t just for big corporates or city properties. Here’s how it’s playing out across the country:

• Regional property: In Queensland’s fast-growing coastal towns, ROFR is helping tenants secure first dibs on homes as landlords look to cash in on rising values.
• Family businesses: In NSW, family farm succession plans increasingly feature ROFR clauses to keep land in the family—while giving siblings the chance to buy before outsiders.
• Tech startups: Melbourne-based fintechs are granting ROFR to seed investors for Series A rounds, ensuring early backers aren’t diluted by future funding deals.

Looking ahead, legal tech platforms in Australia are rolling out digital tools to automate ROFR notifications and responses, reducing disputes and streamlining deal timelines.

Conclusion: Leverage ROFR to Your Advantage in 2025

Right of first refusal clauses are no longer a niche legal curiosity—they’re a core part of Australia’s deal-making toolkit in 2025. Whether you’re a buyer, seller, landlord, or investor, understanding how ROFR works (and how it’s changing) could be your secret weapon in a competitive landscape. Don’t just sign boilerplate clauses—negotiate smart, seek clarity, and use ROFR to protect your interests or unlock new opportunities.