Sec. 10. Community and tenant opportunity to purchase multifamily rental properties
1,533 words·~7 min read·
/bill/118/s/5078/is/section-10A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
In this section: The term approved statement of interest , with respect to a property, means a qualifying tenant organization's statement of interest in purchasing the property that has been approved by the Authority. The term covered rental property — means multifamily housing that contains 3 or more separate rental dwelling units and— received a credit under section 41 of the Internal Revenue Code of 1986 by reason of subsection (h)(4)(B) of that section; has a mortgage made by the Secretary of Agriculture under section 515 of the Housing Act of 1949 ( 42 U.S.C. 1485 ); has a distressed or nonperforming mortgage loan held by the Federal National Mortgage Association or the Federal Home Loan Mortgage Authority; secures a mortgage loan issued by a member institution of a Federal Home Loan Bank; or has a federally insured mortgage and has an organization of tenants that has demonstrated an interest in, and maintained an approved statement of interest in, purchasing, subject to the application process and procedures determined by the Authority; and does not include a student housing dormitory.
The term first-look and first opportunity to purchase period means the 30-day period described in subsection (d)(1)(A). The term notice period means the 90-day period described in subsection (c)(2)(A). The term qualifying tenant organization means an incorporated tenant organization. This section does not apply to— any transfer by devise or intestacy or any other transfer made in connection with a bona fide effort to pass an interest in real property to one’s devisees or heirs (including such a transfer made in connection with a living trust); or any transfer between or among spouses, domestic partners, siblings (including half-siblings, step-siblings, and adoptive siblings), parents (including step-parents and adoptive parents) or guardians and their children, grandparents and their grandchildren, aunts or uncles and their nieces or nephews, great-aunts or great-uncles and their grand-nieces or grand-nephews, or first or second cousins, or any combination thereof.
The owner of a covered rental property shall provide written notice to tenants and the Authority of the owner’s interest in selling, transferring, assigning, or conveying the property or the mortgage on the property, as soon as is practicable in good faith. The owner of a covered rental property may not sell, transfer, assign, or convey the property or the mortgage on the property, including by means of any short sale or sale pursuant to foreclosure, unless the owner— provides written notice to tenants and the Authority not later than 90 days before the property or mortgage would be sold, transferred, assigned, or conveyed; and provides a first look, opportunity to purchase, and right of first refusal to purchase the property in accordance with the procedures and requirements under subsection (d).
During the 30-day period beginning on the day after the last day of the notice period, the owner of the covered rental property shall provide eligible entities the first opportunity to purchase the property. The owner of the covered rental property may not offer the covered rental property for sale to any other purchaser, solicit any offer or bid to purchase the covered rental property, or otherwise enter into a contract for the transfer, sale, assignment, or conveyance of the covered rental property until after the end of the first-look and first opportunity to purchase period.
Any eligible entity wishing to take advantage of the priority granted under paragraph
(1)with respect to a covered rental property shall provide a notice of offer of sale by the end of the first-look and first opportunity to purchase period. The owner of covered rental property shall consider offers described in subparagraph
(A)according to the following order of priority: An offer from a qualifying tenant organization that was incorporated before the notice period and that has a current, approved statement of interest in purchasing the covered rental property. An offer from a qualifying tenant organization that was incorporated during the notice period. An offer from an eligible entity that a qualifying tenant organization of the covered rental property has endorsed. An offer from an eligible entity that a qualifying tenant organization of the covered rental property has not endorsed. After the owner of a covered rental property complies with subsection
(c)and paragraphs
(1)and
(2)of this subsection, if the owner does not sell the covered rental property to an eligible entity under such paragraph
(2)and instead opts to make the covered rental property available for sale to a third party, including by means of any short sale or sale pursuant to foreclosure, any eligible entity shall have the right to match any third-party offer (referred to in this subsection as the right of first refusal . If the owner of a covered rental property does not enter into a sales contract during the 1-year period beginning on the date on which the right of first refusal under paragraph
(3)is triggered, the obligation to provide notice of the interest and intent to sell under subsection
(c)shall renew, and the owner may not sell the property except pursuant to subsection
(c)and this subsection. The owner of a covered rental property, in notifying the tenants of the covered rental property of the interest of the owner in selling, transferring, assigning, or conveying the property or the mortgage on the property under subsection (c), shall provide the notice in an accessible manner that clearly outlines the process under this section and available resources. Not later than the first day of the first-look and first opportunity to purchase period, the owner of a covered rental property shall notify tenants of the opportunity to purchase the covered rental property in an accessible manner that clearly outlines their rights and the resources available under this section to support a purchase. The owner of a covered rental property shall notify the tenants of the property of each offer to purchase the property made by an eligible entity. Nothing in subsection
(d)shall be construed to provide the right to purchase a covered rental property to an individual tenant. As part of the technical assistance provided under section 6(d) and subsection
(g)of this section, the Authority shall provide resources to expedite the incorporation of tenant organizations to better allow tenants to participate in the process for purchase of a covered rental property under subsection
(d)of this section, including pre-notification tenant training especially in areas at high risk for displacement. A qualifying tenant organization that wishes to purchase a covered rental property under this section shall establish a resident-owned cooperative or community land trust to purchase the covered rental property. If a qualifying tenant organization purchases a covered rental property under this section, the subsequent resident organization may resell the property to an eligible entity. A qualifying tenant organization for a covered rental property may endorse an eligible entity’s offer of sale for purposes of the order of priority under subsection (d)(2)(B), by a majority vote of tenants and subject to procedures outlined by the Authority. A qualifying tenant organization may retain a legal representative to act as an agent of the qualifying tenant organization for purposes of this section. A tenant of a covered rental property may not assign, transfer, sell, or convey the rights afforded to the tenant under this section. For purposes of this section, an eligible entity, including a qualifying tenant organization and a legal representative of a qualifying tenant organization, and an owner of a covered rental property shall negotiate in good faith and communicate within reasonable timeframes. The Authority shall— establish an Office of Community and Tenant Opportunity to Purchase Act to provide direct technical assistance and grants for technical assistance to eligible entities, and legal representatives of qualifying tenant organizations, in order to support and enhance the ability of eligible entities, including qualifying tenant organizations, to make purchases under this section; establish an application process, procedures, and requirements for qualifying tenant organizations to establish and maintain a statement of interest in purchasing a covered rental property; and finance purchases made by eligible entities under this section, consistent with the purposes of section 5. The application for a qualifying tenant organization to establish a statement of interest in purchasing a covered rental property shall include such information as the Authority determines appropriate. In the funding of purchases made under this section or the approval of a qualifying tenant organization’s statement of interest in purchasing a covered rental property, the Authority may prioritize based on the following factors: The affordable housing needs of a region or State. The potential number of permanently affordable housing units. The feasibility of a project. The opportunity to improve the condition and quality of housing for extremely low-income families or low-income families. The pressures of displacement and the opportunity to preserve naturally occurring affordable housing. Any factors related to the purposes or powers of the Authority. The Authority shall promulgate regulations establishing penalties for noncompliance under this section and appropriate financial penalties to enforce this section. The Authority— shall promulgate regulations necessary to carry out this section; and in conjunction with the Secretary and State and local housing agencies, shall promulgate regulations to carry out this section with respect to purchases made by eligible entities.
Connectionstraces to 1
Traces to 1 document
Citation graph
cites case law
Sec. 10
Community and tenant opportunity to purchase multifamily rental properties
Cites 1Cited by 0 across 0 sources