The information below may help you with questions relating to Rights of First Refusal and Repurchase Options (collectively an "RPO") held by Dartmouth College on properties in the area.
Rights of First Refusal. A right of first refusal typically gives Dartmouth 30-60 days to decide if it wishes to purchase the home under the same, or similar terms as have been agreed to with a third party buyer.
Repurchase Option. A repurchase option typically allows Dartmouth a limited amount of time to decide whether to purchase a property upon the occurrence of certain events, which may be the anticipated sale of the home or the owner's decision to leave College employment. The purchase price offered to Dartmouth is usually established by a formula contained in the Repurchase Option.
Selling Your Home?
Owners who are interested in selling homes subject to RPOs are encouraged to first contact Jennifer Jones in the Dartmouth College Real Estate Office (603-646-9286) to discuss Dartmouth's potential interest.
Frequently Asked Questions
Answers to frequently asked questions can be found by selecting a question from the list below.
With only a few exceptions, RPOs were either retained by the College when it originally sold the property or were granted by an employee-owner when the College assisted with a previous mortgage financing.
How can I find out if Dartmouth has an RPO on a specific property?
Homeowners may have records which will confirm the existence of an RPO and may have title information sufficient to document that an RPO doesn't exist. Occasionally the Dartmouth College Real Estate Office (603-646-2446) may be able to confirm whether a property is subject to an RPO. If neither the homeowner nor Dartmouth has definitive evidence, the only way to conclusively determine whether a property is subject to an RPO is to conduct a title search.
Homeowners, brokers and real estate agents are encouraged to contact the Dartmouth College Real Estate Office to discuss Dartmouth's potential interest prior to placing the house on the market. In most cases, Dartmouth will be able to fairly immediately indicate whether it would a) consent to a permanent release of the RPO, b) consent to a transfer of the property subject to receiving a similar RPO from the new buyer, or c) have interest in negotiating a potential purchase prior to the homeowner's receipt of a bona fide offer. In a limited number of cases, Dartmouth will indicate its potential interest in purchasing the property but that it will need to postpone any more formal response until the homeowner has a bona fide offer.
In the past 10 years, how many RPOs has Dartmouth permanently released?
Approximately 150 RPOs have been permanently released (i.e., no new RPO from the new buyer) since 1995. Many of these were included in blanket releases covering multiple properties in specific areas of Hanover (click here for a maps showing Haskins Road Area or Dresden Road Area covered by such releases); others were released by individual action. Full Releases can be downloaded at bottom of page.
How often does Dartmouth consent to a transfer of a property subject to receiving a similar RPO from the new buyer?
Typically referred to as "rolling over" the RPO, this is the most common outcome when sale of a property subject to a Dartmouth right of first refusal is proposed. Repurchase Options designed to limit appreciation and maintain long term affordability (typically in the Grasse Road neighborhoods of Hanover) are typically exercised by the College assigning a specified employee its right to repurchase under the RPO (effectively rolling over the RPO and passing on to the new buyer the right to purchase at a reduced price).
How often does Dartmouth wait until the homeowner has a bona fide offer and then exercise its right to purchase?
Since 1990, Dartmouth has only twice exercised its right to purchase by matching an offer. In one case, the property was immediately adjacent to campus and was put under contract before the College became aware of the RPO. In the other case, the College exercised its right to purchase because the prospective buyer was unwilling to do a rollover (the College subsequently sold the house to an employee subject to a new RPO.)
Which properties are more likely to be released or rolled over?
Whether or not Dartmouth would be more likely to release or to exercise its RPO will depend at any given time upon Dartmouth's current needs, the location of the home, and the sale price. Still, properties farther away from campus are more likely to be released. The College will typically exercise its Repurchase Option on homes subject to a Repurchase Option designed to limit appreciation, prior to the property being marketed by the homeowner.
If the College does decide to exercise its RPO, will the broker be paid a commission?
Most RPOs give the College the option to buy the house at a price net of any commission. As a result, we encourage homeowners subject to an RPO to contact the College before listing the property.
What should I do if the College has an RPO and I have a Purchase and Sale Agreement?
In all cases a copy of the signed Purchase and Sale Agreement should immediately be delivered to the Dartmouth College Real Estate Office. Unless the College has previously consented to permanently release the RPO, the process will be more efficient if the Purchase and Sale Agreement confirms that the prospective buyer is willing to give the College a new RPO containing the same terms. RPOs usually give the College a fixed number of days to decide whether it will exercise its option to purchase, but as a matter of policy, the College does its best to limit any delay. In the case of a right of frist refusal giving the College the right to match an existing offer, the College typically will respond within 1 - 3 days as to whether it will either a) consent to a permanent release of the RPO, or b) match the offer and purchase the property. Occasionally the College's initial response will be to confirm a willingness to consent to the proposed sale subject to receiving a similar RPO from the new buyer, in which case, the College will also forward a confirmation to this effect for all parties to sign and will prepare the necessary documents for the closing.
There is no evidence that the existence of an RPO has any impact on a property's value (other than in the case of RPOs which specifically allow the College to purchase at a calculated value, e.g., a Consumer Price Index-adjusted price). If the College's option only allows it to match a bona fide offer, the market's perception of the property's value governs.
Should prospective buyers worry about making a bid on a property subject to an RPO?
The existence of an RPO shouldn't discourage a buyer from making an offer. While past experience doesn't warrant concern about the time for a response, buyers may want to make an offer contingent on resolving the RPO (whether by consent, rollover or exercise) within a specified period of time.