ROFR (Right of First Refusal)

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Program Overview 

Montgomery County enacted its Right of First Refusal (ROFR) law in 1980 to preserve affordable housing and to prevent tenant displacement.  The County, the Housing Opportunities Commission, or any certified tenant organization (in that order) must be offered the opportunity to buy any multifamily rental housing development of 4 or more units before the owner sells to another party.

The ROFR Program is administered by the Montgomery County Department of Housing and Community Affairs (“DHCA”) and is detailed in Montgomery County Code 53A and related Regulations (collectively referred to as the “Code”). 

On February 26, 2024, the County Executive signed Expedited Bill No 38-23 allowing the County to assign its ROFR to qualified affordable housing developers.  The revisions to the program set out assignment processes and procedures, which are explained below. The Council must approve Regulations to establish the new ROFR assignment process.  Those draft Regulations are posted on the County Register and will be adopted after June 1, 2024.  In the interim, until May 26, 2024, the County Executive may, by Executive Order, assign the County’s Right of First Refusal to an entity qualified by DCHA. 

When is ROFR Required?

An owner must offer the County the right to buy rental housing before selling the property to another party.  The multifamily housing must include 4 or more units to trigger ROFR requirements.  “Selling” means either 1) transfer of title, 2) transfer of a majority interest in an owner, or 3) lease of a rental housing for more than 7 years.

The Code provides certain exemptions from ROFR submission.
  • If the seller enters into an agreement with DHCA at least 30 days prior to the sale that maintains the affordability of the property under the terms of County Code Section 53A-5(a).
  • If the sale is:
    • Under the terms of a bona fide mortgage or deed of trust; 
    • To a mortgagee instead of foreclosure;
    • Under a court order;
    • From one co-tenant to another co-tenant by operation of law;
    • Under a will or intestate distribution;
    • To the State or a local government;
    • Of a minority title interest; or
    • One of certain LITHC transfers under County Code Section 53A-5(c).


When an owner of a multifamily rental development of 4 or more units enters into a contract for sale with a contract purchaser, they must send DHCA a complete ROFR packet within five (5) days of executing that contract.  DHCA and the qualified entity have 60 days from the date of receiving the packet to determine if ROFR will be executed. 

Expedited Bill 38-23 requires any offer for ROFR consideration to be sent to DHCA electronically to the Department. DHCA is creating a portal to allow for the upload of ROFR documents.
Until such technical requirements can be met, DHCA requests that all ROFR submissions be submitted by hardcopy and hand-delivered to DHCA at:

Attn: Scott Bruton, Director

Department of Housing and Community Affairs
1401 Rockville Pike, 4th Floor
Rockville, MD 20852

The ROFR packet must include any information about the rental housing relevant to exercising the right of first refusal, such as architectural and engineering plans, specifications, and operating data. Once the Regulations for the ROFR assignment process are approved by the Council, DHCA will forward the ROFR packet to any previously approved qualified entity.

If requested, the owner will provide DHCA and qualified entities with access to the rental housing within 60 days to inspect the property and conduct reasonable tests at reasonable times.

If ROFR is executed, DHCA or the County assignee will exercise ROFR by accepting the offer at substantially the same terms and conditions contained in the owner’s bona fide contract of sale with the third party. 

  • Sale will be completed within 180 days of DHCA receiving the ROFR packet unless the owner agrees to extend the period.
  • Such acceptance may be conditioned on obtaining financing at any time before the deadline for completing the sale.
  • The County, HOC, any tenant organization, or County assignee must not be required to pay more than 5% of the contract price as a downpayment.

If ROFR is not executed, DHCA will issue a certificate of compliance for rental housing to the owner, the buyer, or any other interested parties in a form appropriate for recordation in the land records.  The certificate is conclusive evidence of compliance with the ROFR law. 

NOTE: A tenant organization has 90 days after receiving the ROFR packet to exercise its rights, should the County, their assignee, and HOC decline. 

Approved Qualified Entities

Executive Regulation 16-23 addresses the requirements to become a qualified entity under the law.  DHCA will update this site with additional information and the necessary forms when those Regulations are adopted.  
As the draft regulations currently state, to become a qualified entity, the affordable housing developer or property manager must apply to become a qualified entity with DHCA and all necessary supporting documents.  DHCA will review the application and submit a recommendation to the County Executive for final approval.
A written agreement with the assignee must accomplish any assignment of the County’s ROFR.
53A-2 automatically designates the following as qualified entities:
  • Rockville Development of Housing and Community Development
  • Rockville Housing Enterprises of the City of Rockville
  • Division of Housing and Community Development of the City of Gaithersburg
  • Department of Housing and Community Development of the City of Takoma Park 

Until May 26, 2024, the County Executive may, by executive order, assign the County’s ROFR to an entity qualified by DHCA. Such entity must:
  • Demonstrate they are a bona fide nonprofit or for-profit organization in good standing under the laws of Maryland or one of the designated entities authorized in 53A-2 (listed above);
  • Certify in writing that for the past 10 years, the person or each principal in the entity has complied with all laws related to the acquisition, maintenance, and management of rental and affordable housing;
  • Demonstrate the entity has expertise and experience acquiring, owning, operating, managing, and developing multi-unit affordable rental housing projects in the last five years, including a certification that the entity has never been in financial default as either a borrower or guarantor or if to the contrary, explaining in complete detail all the circumstances; 
  • Demonstrate proof of readiness to purchase the property; and 
  • Demonstrate a commitment to community engagement, such as working with community-based organizations or tenant counseling organizations on anti-displacement activities.

Related Documents

This section will be modified after Executive Regulation 16-23 is adopted. 

Additional Information

The Right of First Refusal Annual Report summarizes the activities of the ROFR program for 2023. 

Download the 2023 ROFR Report (PDF)
For questions regarding the ROFR process, please contact Lawrence Cager, Manager of the Multifamily Section, at [email protected] 
The Department of Housing and Community Affairs, located at 1400 Rockville Pike, 4th Floor, Rockville, MD, 20802, is open to the public, but appointments are strongly encouraged.