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The Supreme Court, in its Judgment 591/2026, of April 16, has clarified a very interesting question regarding urban leases and Corporate Law: what happens when a rented dwelling ceases to belong to a Company and passes into the name of one of its partners as a result of the Company’s Liquidation?
The ruling interprets Article 25 of the Urban Leasing Law (LAU) and concludes that these types of allocations do not constitute a transfer for consideration equivalent to a sale. Therefore, the tenant does not acquire the Right of first refusal or redemption.
This is a particularly relevant resolution for asset-holding Companies, Property Investors and Legal operators involved in business reorganization processes or Liquidation of leased Assets.
The Case Examined by the Supreme Court
A limited liability Company owned a house and a parking space, which it rented to a tenant who paid the monthly rent on time. Later, the Company was dissolved, and during the Liquidation process, the properties were awarded to one of the partners as part of her share of the liquidation proceeds.
The tenants understood that this allocation was equivalent, in practice, to a transfer of ownership and exercised their Right of first refusal to retain the property under the same conditions. In other words, they understood that the transfer of the property from the Company to the partner opened the period for exercising this Right, allowing the tenant to purchase the property by paying the same price they were being offered in the Company’s Liquidation.
However, both the Court of First Instance and the Provincial Court dismissed the claim, a criterion that was finally confirmed by the Supreme Court in its Judgment 591/2026, of April 16.
Why is There no Right of Withdrawal?
The key to the ruling is to determine whether the operation constitutes a genuine transfer for consideration.
The Supreme Court recalls that the tenant’s Right of first refusal and redemption provided for in article 25 LAU arises only when there is a true onerous transfer of the rented dwelling, that is, a sale or equivalent business with identifiable price and consideration.
In this case, the allocation of the property does not result from a sale between third parties, but from the internal distribution of the Company’s assets following its liquidation. And this is crucial.
According to the Supreme Court, the partner already had a prior right to the Company’s assets. The allocation of the property simply formalizes that right within the liquidation process, but does not constitute a transaction equivalent to a sale.
Furthermore, the ruling emphasizes that there is no legally defined “price” that would allow the lessee to assume the transaction through the Right of first refusal. The economic valuation of the awarded assets serves only as a tool to balance the partners’ shares, but it does not transform the transaction into an onerous transfer with a market price, as would be the case for a transfer to a third party.
Restrictive Interpretation of Legal Redemptions
Another relevant aspect of the ruling is the reiteration of a consolidated doctrine of the Supreme Court: Legal redemptions must be interpreted restrictively.
This means that the tenant’s Right of first refusal cannot be automatically extended to any change of ownership of the property through analogous or expansive interpretations.
Consequently, not every transfer of a leased property triggers the Right of first refusal and redemption provided for in the LAU (Urban Leases Act). Only those transactions that truly fall within the legally established circumstances will do so.
When Can the Right of First Refusal in a Lease be Exercised?
The tenant’s Right of withdrawal can be exercised when there is a genuine transfer of the rented property for valuable consideration, as occurs in: sales; payments in kind; equivalent transactions with identifiable economic consideration.
In these cases, the tenant can take over the position of the buyer and acquire the property under the same conditions agreed with the buyer.
However, when the transfer derives from internal processes of corporate reorganization or Liquidation of Companies, it will be necessary to carefully analyze the legal nature of the operation before concluding that there is a right of first refusal.
