A co-owner in a real estate property, after 17 years put his right in the property for sale to a third party, even though in the partnership agreement the other co-owners were granted a right of first refusal.
The Supreme Court held that the right of first refusal, being a proprietary right, does not expire after five years. The Israeli Land Law stipulates that the provision in a real estate joint tenancy agreement that revokes or limits this right of a co-owner in real estate to transfer his share without the consent of the other cannot limit beyond five years. However, the five-year limit refers to limitations set as such and not to the impairment of the ability to make a transaction resulting from the acquisition of a proprietary right in real estate and contrary to that acquisition. Right of first refusal in real estate is a proprietary right. Here, the co-owners were given a right of first refusal to purchase the part that the seller wishes to sell. Therefore, it is not a mere restriction on the seller's right to sell, but rather a proprietary right given to the other co-owners to purchase his share. Therefore, the five-year restriction does not apply and the contractual right of first refusal should be upheld.