The issue in both contracts, says Roth, who specializes in game theory, experimental economics, and market design, was that the right was structured as what he terms a Before and After Right of First Refusal (BA-ROFR). The right holder is offered an initial deal by the asset owner—the landlord offers to sell the flat to the renter for $100,000, probably a relatively high price. If the tenant rejects the deal, the landlord is free to offer the property to a third party. But the tenant is still in the game. If the owner and a third party agree on a price below the $100,000 originally offered to the tenant, the tenant has the option to acquire the property for that lower price.
Seems like a sweet opportunity for the tenant. But the timing of the deal works in favor of the landlord, who can now present an ultimatum to the third party saying that if the third party offers a price below $100,000 the renter has a right to match the offer. The BA-ROFR not only strengthens the bargaining position of the owner with the third party, but it also allows the initial offer to the tenant to be set high.
Source: HBR
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