Right Of First Refusal To Lease - Get It Right, Or Else!

If a tenant in a commercial building holds a right of first refusal (RFR) to lease any other floor in that building, and the landlord subsequently receives an offer to lease multiple floors, is the tenant's RFR triggered? In the recent judgment of the Alberta Court of Appeal in Equinox Engineering v. Lavalin L.P. Investment Corp. (Equinox), the somewhat surprising answer to this question is "no."

In Equinox, the tenant leased three floors in an office building. The tenant's lease included an RFR that would be triggered if the landlord received a bona fide offer to lease "any floor of the premises in the Building," in which case the tenant would have the first right to lease "the said floor" on the same terms and conditions as set out in the offer. The landlord subsequently received an offer to lease six floors and part of two additional floors. Although the tenant was not in a position to lease all the floors included in the offer, the tenant nonetheless took the