Part 5 – Division 1
Questions & Answers
Building High-Speed Rail Faster
Right of First Refusal (ROFR)
Q: What is the "Right of First Refusal"?
A: "Right of First Refusal" provides Alto a priority in acquiring land that may be required for the high-speed rail initiative. If the owner of land against which a Right of First Refusal has been registered has put his property for sale and accepts an offer, Alto can elect to purchase it instead, at the price specified in the offer.
Q: Why is this measure necessary?
A: This measure helps Alto to acquire critical land for the Initiative while respecting market conditions.
Q: How does this measure ensure fairness for landowners?
A: Even if lands are subject to a Right of First Refusal, landowners are free to list their property on the market and negotiate sale conditions with a third party. Only when an offer is accepted will Alto be given an opportunity to match that offer price and purchase it instead, helping landowners receive fair market value for their property. Additionally, Alto will compensate the third party who made the offer to purchase for reasonable costs they incurred during the negotiation process. The right of first refusal does not limit a landowner’s ability to list or sell their property on the open market. Rather, it is intended to facilitate timely land acquisition and reduce the need for expropriation.
Q: How does Alto subject land to its right of first refusal in a property?
A: Alto does so by registering a notice to that effect with the land registry and sending a copy to the landowner. This notice identifies the property in question, states that it may be needed for the high-speed rail initiative and sets out the effect of the right of first refusal.
Q: How long does the Right of First Refusal last?
A: The Right of First Refusal could last for up to eight years from the time the notice is registered.
Q: What happens if a landowner accepts an offer to purchase the property subject to the Right of First Refusal?
A: If a landowner accepts an offer from a third party to purchase their property, they must inform Alto immediately. They are required to provide a copy of the signed agreement of purchase and sale to Alto so that it can analyse that offer and decide whether it will exercise its right.
Q: How much time does Alto have to decide on the purchase?
A: Alto has 60 days after it receives a copy of the signed agreement of purchase and sale to decide whether it will exercise its right of first refusal to purchase the property.
Q: What happens if Alto declines or doesn’t respond?
A: If Alto declines to exercise its right or fails to respond within the 60-day period, the transaction between the landowner and the third-party can proceed normally. In that context, Alto will cause the notice of right of first refusal to be deleted from the land registry.
Q: What protections exist for potential buyers?
A: If Alto chooses to purchase the property instead of the potential buyer, it must compensate that third party for expenses they reasonably incurred in the course of negotiating the agreement of purchase and sale.
Q: What happens if no offer to purchase is accepted within the eight-year period of the Right of First Refusal?
A: If no offer to purchase is made and accepted within eight years of the registration of the notice of right of first refusal, the notice expires, and the landowner has no further obligations towards Alto.
Q: Are there similar measures in place elsewhere?
A: Yes, a similar system exists in the province of Quebec and has been utilized at the municipal levels.