New York State Real Estate Salesperson Licensing Exam

What is the main benefit of a right of first refusal for condo associations?

1. Financial incentive

2. Control over future sales

3. Shared equity

4. Tax advantages

The correct answer is: Control over future sales

The main benefit of a right of first refusal for condo associations is control over future sales. This provision allows the condo association to have the first opportunity to purchase a unit before it is sold to an outside buyer. This control can help maintain the character and cohesion of the community, ensuring that potential new owners align with the existing residents and contributing to the overall stability of the property values. By having this right, the condo association can effectively manage who purchases units within the development, which can prevent unwanted or disruptive changes to the neighborhood dynamic. This is particularly important in residential communities where the interactions between residents can significantly impact quality of life and property value. The other options, while they may contain some benefits in specific contexts, do not capture the primary advantage that the right of first refusal provides to communities. Financial incentives and shared equity are more relevant to individual buyers rather than the management of community cohesion, and tax advantages typically pertain to different aspects of property ownership rather than the organizational control enabled by this right.