Give Tenants Right to Buy

Section 1. Short title. This act shall be known and may be cited as the "tenant opportunity to purchase act".

§ 2. The real property actions and proceedings law is amended by adding a new article 7-E to read as follows:

ARTICLE 7-E

TENANT OPPORTUNITY TO PURCHASE ACT Section 799. Definitions.

799-a. Authority.

799-b. Applicability.

799-c. Exemptions.

799-d. Right of first refusal.

799-e. Tenant decision-making; tenant organizations.

799-f. Qualified purchasers.

799-g. Supportive partners.

799-h. Assignment of rights.

799-i. Waiver of rights.

799-j. Notice requirements.

799-k. Third-party purchaser rights.

799-l. Right to appraisal.

799-m. Purchase contract negotiation.

799-n. No selling of rights.

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD01564-01-5

799-o. Tenant protections.

799-p. Price stabilization.

799-q. Incentives.

799-r. Enforcement.

799-s. Statutory construction.

799-t. Administration and reports.

§ 799. Definitions. For the purposes of this article, the following terms shall have the following meanings:

1. "AMI" or "area median income" means area median income established by the U.S. department of housing and urban development (HUD), pursuant to 42 U.S.C. § 1427 et seq., to establish local income classification levels.

2. "Appraised value" means the value of the rental housing accommodation as of the date of the appraisal, based on an objective, independent property valuation, performed according to professional appraisal industry standards.

3. "Bona fide offer of sale" means an offer of sale for a rental housing accommodation that is either:

(a) For a price and other material terms at least as favorable to a tenant, tenant organization, and qualified purchaser as those that the owner has offered, accepted, or is considering offering or accepting, from a purchaser in an arm's length third-party purchase contract; or

(b) In the absence of an arm's length third-party purchase contract, an offer of sale containing a sales price less than or equal to a price and other material terms comparable to that at which a willing seller and a willing buyer would sell and purchase the rental housing accommodation, or an appraised value.

4. "CPI" or "consumer price index" means the consumer price index published by the United States department of labor, bureau of labor statistics for the northeast census region. If publication of the consumer price index ceases, or if it is otherwise unavailable or is altered in a way as to be unusable, DHCR shall determine the use of an appropriate substitute index published by the United States department of labor, bureau of labor statistics or any successor agency.

5. "Community land trust" means a nonprofit corporation organized pursuant to section 501 (c) (3) of the U.S. Internal Revenue Code that satisfies all of the following criteria:

(a) Such nonprofit corporation's primary purpose is the creation and maintenance of permanently affordable single-family or multifamily residences;

(b) All dwellings and units on the land owned by the nonprofit corporation are sold to a qualified owner to be occupied as the qualified owner's primary residence or rented to persons and families of low income as defined in subdivision ten of section twelve of the private housing finance law; and

(c) The land owned by the nonprofit corporation, on which a dwelling or unit sold to a qualified owner is situated, is leased by such corporation to the qualified owner for the convenient occupation and use of such dwelling or unit for a renewable term of ninety-nine years.

6. "Days" shall mean calendar days unless otherwise indicated.

7. "Governing document" means a constitution, articles, bylaws, operating agreement, or other writings that govern the purpose and operation of a tenant organization and the rights and obligations of its members, which shall include provisions on the tenant organization's decisionmaking processes and appointing officers and other authorized agents to act on its behalf.

8. "DHCR" means New York state division of housing and community renewal, or its successor agency.

9. "Highest and best use" means the reasonably probable legal use of a property that is physically possible, appropriately supported, and financially feasible and that results in the highest value of the property.

10. "Matter-of-right" means a land use, development density, or structural dimension to which a property owner is entitled by current zoning regulations or law.

11. "Owner" means one or more persons, corporation, partnership, limited liability company, trustee, or any other entity, who is the owner of record of a rental housing accommodation at the time of giving notice of intention to sell, and each person, corporation, partnership, limited liability company, trustee, or any other entity, who, directly or indirectly, owns fifty percent or more of the equity interests in such rental housing accommodation at the time of giving notice of intention to sell. For purposes of complying with the notice requirements described in this article, "owner" may refer to any person acting as an authorized agent of the owner.

12. "Permanent affordability" means that future rents and future sales prices of a rental housing accommodation, or separate ownership interests in such rental housing accommodation, shall be made affordable to households with targeted income levels no greater than one hundred thirty percent area median income adjusted for family size.

13. "Purchase contract" means a binding written agreement whereby an owner agrees to sell property including, without limitation, a purchase and sale agreement, contract of sale, purchase option or other similar instrument.

14. "Qualified purchaser" means a qualified purchaser meeting the criteria described in section seven hundred ninety-nine-f of this article.

15. "Rent" shall have the same meaning as in section seven hundred two of this chapter.

16. "Rental agreement" means an agreement, oral, written or implied, between an owner and a tenant for use or occupancy of a unit and for housing services.

17. "Rental housing accommodation" means any real property, including the land appurtenant thereto, containing one or more rental units and located in New York state.

18. "Rental unit" or "unit" means any unit in any real property, including the land appurtenant thereto, that is available for rent for residential use or occupancy, located in New York state, together with all housing services connected with the use or occupancy of such property such as common areas and recreational facilities held out for use by the tenant.

19. "Sale" or "sell" means the transfer, in exchange for money or any other thing of economic value, of a present interest in the rental housing accommodation, including beneficial use, where the value of the present interest is the fee interest in the rental housing accommodation, or substantially equal to the value of that fee interest. For purposes of this definition, a "transfer" may include those completed in one transaction or a series of transactions over a period of time.

20. "Supportive partner" means a "supportive partner" meeting the criteria set forth in section seven hundred ninety-nine-g of this article.

21. "Tenant" means one or more renter, tenant, subtenant, lessee, sub lessee, or other person entitled to the possession, occupancy, or benefits of a rental unit within a rental housing accommodation. "Tenant" shall not include transient guests who use or occupy a unit regardless of any consideration paid or exchanged by such a transient guest or any tenant that previously occupied the unit prior to the current occupant.

22. "Tenant organization" means tenants who have organized themselves as a legal entity that:

(a) Can acquire an interest in real property;

(b) Represents at least a majority of the tenant-occupied rental units in a rental housing accommodation as of the date of the owner's notice of intent to sell;

(c) Has adopted a governing document; and

(d) Has appointed officers and any other authorized agents specifically designated to execute contracts or act on its behalf.

23. "Third-party purchaser" means any person or entity other than a tenant, tenant organization, or qualified purchaser, engaged or seeking to engage, in purchasing a rental housing accommodation from an owner under this article.

24. "TOPA buyer" means a tenant, tenant organization, or qualified purchaser that is purchasing or has purchased a rental housing accommodation from an owner under this article.

25. "Under threat of eminent domain" refers to the commencement of the process of eminent domain, including but not limited to, any formal or informal contact with the owner by the government or government agents regarding the potential or ongoing assertion of eminent domain, and any hearings or court proceedings regarding the same.

§ 799-a. Authority. DHCR and their designees shall be authorized to enforce the provisions of this article, and for such purposes, shall have the powers of a law enforcement officer. DHCR shall be authorized to establish standards, policies, and procedures for the implementation of the provisions of this article to further the purpose set forth in this article.

§ 799-b. Applicability. The Tenant Opportunity to Purchase Act shall apply to all rental housing accommodations which contain three or more rental units unless otherwise exempted by this article.

§ 799-c. Exemptions. 1. Residential property types exempted. The following residential properties shall not be considered covered properties for purposes of this article:

(a) Properties owned by the municipal, state, or federal governments.

(b) Properties owned by and operated as a hospital, convent, monastery, extended care facility, convalescent home, assisted living residence, facilities providing housing to runaway and homeless youth or young adults, college or school dormitory or any institution operated for charitable, hospital or educational purposes.

(c) Properties properly licensed as a hotel or motel.

(d) Residential properties undergoing refinancing, a loan modification, short sale, deed in lieu of foreclosure or any other loss-mitigation option in order to maintain ownership of such properties.

(e) Multiple dwelling units or groups of multiple dwelling units managed together under the same private ownership in which the majority of dwelling units therein that will continue to be subject to federal, state, or city income eligibility restrictions and in which rents for such dwelling units are controlled, regulated, or assisted by a federal, state, or city agency pursuant to a regulatory agreement or rental assistance agreement designed to make such dwelling units affordable on a project-based basis. Assisted rental housing programs shall include:

(i) any program created, administered, or supervised by the city or state under article two, four, or eleven of the private housing finance law, but shall not include any multiple dwelling owned or operated by a company organized under article two or four of the private housing finance law that was occupied prior to January first, nineteen hundred seventy-four;

(ii) any program providing project-based assistance under section eight of the United States housing act of 1937, as amended; and

(iii) housing programs governed by sections 202, 207, 221, 232, 236, or 811 of the federal national housing act, 12 U.S.C. 1701 et seq., as amended.

(f) Property held in cooperative or condominium forms of ownership.

(g) Manufactured homes and mobile homes as defined in section two hundred thirty-three of the real property law.

2. Transfers exempted. The following transfers shall be exempted for the purposes of this article:

(a) An inter-vivos transfer, even when transferred in exchange for consideration, between spouses, domestic partners, parent and child, siblings, grandparent and grandchild.

(b) A transfer for consideration, by a decedent's estate to members of the decedent's family if the consideration arising from the transfer will pass from the decedent's estate to, or solely for the benefit of, charity. For the purposes of this paragraph, the term "members of the decedent's family" shall include:

(i) A spouse, domestic partner, parent, child, sibling, grandparent, grandchild; and

(ii) A trust for the primary benefit of a spouse, domestic partner, parent, child, sibling, grandparent, or grandchild.

(c) A transfer of bare legal title into a revocable trust, without actual consideration for the transfer, where the transferor is the current beneficiary of the trust.

(d) A transfer to a named beneficiary of a revocable trust by reason of the death of the grantor of the revocable trust.

(e) A transfer pursuant to court order or court-approved settlement.

(f) A transfer by eminent domain or under threat of eminent domain.