Massachusetts Supreme Court Rules in Favor of Nonprofits in LIHTC Right of First Refusal
The Massachusetts Supreme Judicial Court affirmed a lower court’s summary judgment supporting a nonprofit’s right of first refusal to purchase a low-income housing tax credit (LIHTC) property once a third party makes an enforceable offer to purchase the property. The court in Homeowner's Rehab Inc. v. Related Corporate V SLP LP ruled that the right of first refusal doesn’t require a bona fide offer to be made and accepted with the consent of the special limited partner. The ruling states that the partnership only needs an enforceable offer from a third party, that the partnership must make a decision to accept the offer (although that doesn’t need to be communicated to the third party) and that the general partner has the power to accept the offer. The ruling specifies that the power of the general partner to decide to accept the offer depends on the partnership language.