Homeowner's Rehab, Inc. v. Related Corporate V SLP, L.P.Annotate this Case
At issue was when a right of first refusal may be exercised under the terms of the agreements executed in connection with the project in this case.
The parties here were partners in a limited partnership formed for the purpose of rehabilitating and operating an affordable housing complex under the Low Income Housing Tax Credit program set forth in 26 U.S.C. 42. Under the agreements executed in connection with the project, the majority owner of the general partner held a right of first refusal to purchase the partnership’s interest in the property in accordance with section 42(i)(7).
Plaintiffs commenced this action seeking a declaratory judgment as to the parties’ rights under the relevant agreements, arguing that the right of first refusal could be exercised once a third party makes an enforceable offer to purchase the property interest. Defendants argued that the right of first refusal could not be exercised unless the partnership received a bona fide offer from a third party and decided, with the special limited partner’s consent, to accept that offer. The superior court granted summary judgment in favor of Plaintiffs. The Supreme Judicial Court affirmed, holding that the superior court judge correctly granted summary judgment to Plaintiffs under the facts of this case.