Bill Text: NY S00221 | 2023-2024 | General Assembly | Amended
Bill Title: Establishes the "tenant opportunity to purchase act"; prevents the displacement of middle and lower-income tenants in New York and preserves affordable housing by providing an opportunity for tenants to own or remain renters in the properties in which they reside.
Spectrum: Partisan Bill (Democrat 21-0)
Status: (Introduced) 2024-05-20 - REPORTED AND COMMITTED TO JUDICIARY [S00221 Detail]
Download: New_York-2023-S00221-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 221--A 2023-2024 Regular Sessions IN SENATE (Prefiled) January 4, 2023 ___________ Introduced by Sens. MYRIE, BAILEY, BRISPORT, BROUK, CLEARE, COONEY, FERNANDEZ, GIANARIS, GONZALEZ, HINCHEY, HOYLMAN-SIGAL, JACKSON, MAY, PARKER, RAMOS, RIVERA, SALAZAR, SANDERS, SEPULVEDA, SERRANO, WEBB -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development -- recommitted to the Committee on Housing, Construction and Community Development in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the real property actions and proceedings law, in relation to establishing the tenant opportunity to purchase act The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "tenant opportunity to purchase act". 3 § 2. The real property actions and proceedings law is amended by 4 adding a new article 7-E to read as follows: 5 ARTICLE 7-E 6 TENANT OPPORTUNITY TO PURCHASE ACT 7 Section 799. Definitions. 8 799-a. Authority. 9 799-b. Applicability. 10 799-c. Exemptions. 11 799-d. Right of first refusal. 12 799-e. Tenant decision-making; tenant organizations. 13 799-f. Qualified purchasers. 14 799-g. Supportive partners. 15 799-h. Assignment of rights. 16 799-i. Waiver of rights. 17 799-j. Notice requirements. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD01986-02-4S. 221--A 2 1 799-k. Third-party purchaser rights. 2 799-l. Right to appraisal. 3 799-m. Purchase contract negotiation. 4 799-n. No selling of rights. 5 799-o. Tenant protections. 6 799-p. Price stabilization. 7 799-q. Incentives. 8 799-r. Enforcement. 9 799-s. Statutory construction. 10 799-t. Administration and reports. 11 § 799. Definitions. For the purposes of this article, the following 12 terms shall have the following meanings: 13 1. "AMI" or "area median income" means area median income established 14 by the U.S. department of housing and urban development (HUD), pursuant 15 to 42 U.S.C. § 1427 et seq., to establish local income classification 16 levels. 17 2. "Appraised value" means the value of the rental housing accommo- 18 dation as of the date of the appraisal, based on an objective, independ- 19 ent property valuation, performed according to professional appraisal 20 industry standards. 21 3. "Bona fide offer of sale" means an offer of sale for a rental hous- 22 ing accommodation that is either: 23 (a) For a price and other material terms at least as favorable to a 24 tenant, tenant organization, and qualified purchaser as those that the 25 owner has offered, accepted, or is considering offering or accepting, 26 from a purchaser in an arm's length third-party purchase contract; or 27 (b) In the absence of an arm's length third-party purchase contract, 28 an offer of sale containing a sales price less than or equal to a price 29 and other material terms comparable to that at which a willing seller 30 and a willing buyer would sell and purchase the rental housing accommo- 31 dation, or an appraised value. 32 4. "CPI" or "consumer price index" means the consumer price index 33 published by the United States department of labor, bureau of labor 34 statistics for the northeast census region. If publication of the 35 consumer price index ceases, or if it is otherwise unavailable or is 36 altered in a way as to be unusable, DHCR shall determine the use of an 37 appropriate substitute index published by the United States department 38 of labor, bureau of labor statistics or any successor agency. 39 5. "Community land trust" means a nonprofit corporation organized 40 pursuant to section 501 (c) (3) of the U.S. Internal Revenue Code that 41 satisfies all of the following criteria: 42 (a) Such nonprofit corporation's primary purpose is the creation and 43 maintenance of permanently affordable single-family or multifamily resi- 44 dences; 45 (b) All dwellings and units on the land owned by the nonprofit corpo- 46 ration are sold to a qualified owner to be occupied as the qualified 47 owner's primary residence or rented to persons and families of low 48 income as defined in subdivision ten of section twelve of the private 49 housing finance law; and 50 (c) The land owned by the nonprofit corporation, on which a dwelling 51 or unit sold to a qualified owner is situated, is leased by such corpo- 52 ration to the qualified owner for the convenient occupation and use of 53 such dwelling or unit for a renewable term of ninety-nine years. 54 6. "Days" shall mean calendar days unless otherwise indicated.S. 221--A 3 1 7. "Governing document" means a constitution, articles, bylaws, oper- 2 ating agreement, or other writings that govern the purpose and operation 3 of a tenant organization and the rights and obligations of its members, 4 which shall include provisions on the tenant organization's decision- 5 making processes and appointing officers and other authorized agents to 6 act on its behalf. 7 8. "DHCR" means New York state division of housing and community 8 renewal, or its successor agency. 9 9. "Highest and best use" means the reasonably probable legal use of a 10 property that is physically possible, appropriately supported, and 11 financially feasible and that results in the highest value of the prop- 12 erty. 13 10. "Matter-of-right" means a land use, development density, or struc- 14 tural dimension to which a property owner is entitled by current zoning 15 regulations or law. 16 11. "Owner" means one or more persons, corporation, partnership, 17 limited liability company, trustee, or any other entity, who is the 18 owner of record of a rental housing accommodation at the time of giving 19 notice of intention to sell, and each person, corporation, partnership, 20 limited liability company, trustee, or any other entity, who, directly 21 or indirectly, owns fifty percent or more of the equity interests in 22 such rental housing accommodation at the time of giving notice of inten- 23 tion to sell. For purposes of complying with the notice requirements 24 described in this article, "owner" may refer to any person acting as an 25 authorized agent of the owner. 26 12. "Permanent affordability" means that future rents and future sales 27 prices of a rental housing accommodation, or separate ownership inter- 28 ests in such rental housing accommodation, shall be made affordable to 29 households with targeted income levels no greater than one hundred thir- 30 ty percent area median income adjusted for family size. 31 13. "Purchase contract" means a binding written agreement whereby an 32 owner agrees to sell property including, without limitation, a purchase 33 and sale agreement, contract of sale, purchase option or other similar 34 instrument. 35 14. "Qualified purchaser" means a qualified purchaser meeting the 36 criteria described in section seven hundred ninety-nine-f of this arti- 37 cle. 38 15. "Rent" shall have the same meaning as in section seven hundred two 39 of this chapter. 40 16. "Rental agreement" means an agreement, oral, written or implied, 41 between an owner and a tenant for use or occupancy of a unit and for 42 housing services. 43 17. "Rental housing accommodation" means any real property, including 44 the land appurtenant thereto, containing one or more rental units and 45 located in New York state. 46 18. "Rental unit" or "unit" means any unit in any real property, 47 including the land appurtenant thereto, that is available for rent for 48 residential use or occupancy, located in New York state, together with 49 all housing services connected with the use or occupancy of such proper- 50 ty such as common areas and recreational facilities held out for use by 51 the tenant. 52 19. "Sale" or "sell" means the transfer, in exchange for money or any 53 other thing of economic value, of a present interest in the rental hous- 54 ing accommodation, including beneficial use, where the value of the 55 present interest is the fee interest in the rental housing accommo- 56 dation, or substantially equal to the value of that fee interest. ForS. 221--A 4 1 purposes of this definition, a "transfer" may include those completed in 2 one transaction or a series of transactions over a period of time. 3 20. "Supportive partner" means a "supportive partner" meeting the 4 criteria set forth in section seven hundred ninety-nine-g of this arti- 5 cle. 6 21. "Tenant" means one or more renter, tenant, subtenant, lessee, sub 7 lessee, or other person entitled to the possession, occupancy, or bene- 8 fits of a rental unit within a rental housing accommodation. "Tenant" 9 shall not include transient guests who use or occupy a unit regardless 10 of any consideration paid or exchanged by such a transient guest or any 11 tenant that previously occupied the unit prior to the current occupant. 12 22. "Tenant organization" means tenants who have organized themselves 13 as a legal entity that: 14 (a) Can acquire an interest in real property; 15 (b) Represents at least a majority of the tenant-occupied rental units 16 in a rental housing accommodation as of the date of the owner's notice 17 of intent to sell; 18 (c) Has adopted a governing document; and 19 (d) Has appointed officers and any other authorized agents specif- 20 ically designated to execute contracts or act on its behalf. 21 23. "Third-party purchaser" means any person or entity other than a 22 tenant, tenant organization, or qualified purchaser, engaged or seeking 23 to engage, in purchasing a rental housing accommodation from an owner 24 under this article. 25 24. "TOPA buyer" means a tenant, tenant organization, or qualified 26 purchaser that is purchasing or has purchased a rental housing accommo- 27 dation from an owner under this article. 28 25. "Under threat of eminent domain" refers to the commencement of the 29 process of eminent domain, including but not limited to, any formal or 30 informal contact with the owner by the government or government agents 31 regarding the potential or ongoing assertion of eminent domain, and any 32 hearings or court proceedings regarding the same. 33 § 799-a. Authority. DHCR and their designees shall be authorized to 34 enforce the provisions of this article, and for such purposes, shall 35 have the powers of a law enforcement officer. DHCR shall be authorized 36 to establish standards, policies, and procedures for the implementation 37 of the provisions of this article to further the purpose set forth in 38 this article. 39 § 799-b. Applicability. The Tenant Opportunity to Purchase Act shall 40 apply to all rental housing accommodations which contain three or more 41 rental units unless otherwise exempted by this article. 42 § 799-c. Exemptions. 1. Residential property types exempted. The 43 following residential properties shall not be considered covered proper- 44 ties for purposes of this article: 45 (a) Properties owned by the municipal, state, or federal governments. 46 (b) Properties owned by and operated as a hospital, convent, monas- 47 tery, extended care facility, convalescent home, assisted living resi- 48 dence, facilities providing housing to runaway and homeless youth or 49 young adults, college or school dormitory or any institution operated 50 for charitable, hospital or educational purposes. 51 (c) Properties properly licensed as a hotel or motel. 52 (d) Residential properties undergoing refinancing, a loan modifica- 53 tion, short sale, deed in lieu of foreclosure or any other loss-mitiga- 54 tion option in order to maintain ownership of such properties. 55 (e) Multiple dwelling units or groups of multiple dwelling units 56 managed together under the same private ownership in which the majorityS. 221--A 5 1 of dwelling units therein that will continue to be subject to federal, 2 state, or city income eligibility restrictions and in which rents for 3 such dwelling units are controlled, regulated, or assisted by a federal, 4 state, or city agency pursuant to a regulatory agreement or rental 5 assistance agreement designed to make such dwelling units affordable on 6 a project-based basis. Assisted rental housing programs shall include: 7 (i) any program created, administered, or supervised by the city or 8 state under article two, four, or eleven of the private housing finance 9 law, but shall not include any multiple dwelling owned or operated by a 10 company organized under article two or four of the private housing 11 finance law that was occupied prior to January first, nineteen hundred 12 seventy-four; 13 (ii) any program providing project-based assistance under section 14 eight of the United States housing act of 1937, as amended; and 15 (iii) housing programs governed by sections 202, 207, 221, 232, 236, 16 or 811 of the federal national housing act, 12 U.S.C. 1701 et seq., as 17 amended. 18 (f) Property held in cooperative or condominium forms of ownership. 19 (g) Manufactured homes and mobile homes as defined in section two 20 hundred thirty-three of article seven of the real property law. 21 2. Transfers exempted. The following transfers shall be exempted for 22 the purposes of this article: 23 (a) An inter-vivos transfer, even when transferred in exchange for 24 consideration, between spouses, domestic partners, parent and child, 25 siblings, grandparent and grandchild. 26 (b) A transfer for consideration, by a decedent's estate to members of 27 the decedent's family if the consideration arising from the transfer 28 will pass from the decedent's estate to, or solely for the benefit of, 29 charity. For the purposes of this paragraph, the term "members of the 30 decedent's family" shall include: 31 (i) A spouse, domestic partner, parent, child, sibling, grandparent, 32 grandchild; and 33 (ii) A trust for the primary benefit of a spouse, domestic partner, 34 parent, child, sibling, grandparent, or grandchild. 35 (c) A transfer of bare legal title into a revocable trust, without 36 actual consideration for the transfer, where the transferor is the 37 current beneficiary of the trust. 38 (d) A transfer to a named beneficiary of a revocable trust by reason 39 of the death of the grantor of the revocable trust. 40 (e) A transfer pursuant to court order or court-approved settlement. 41 (f) A transfer by eminent domain or under threat of eminent domain. 42 (g) A transfer of a residential building to a tenant organization or 43 qualified purchaser pursuant to a transfer agreement in effect on the 44 effective date of this article, except that any renewal, modification, 45 or amendment of such agreement occurring on or after the effective date 46 of this article shall be subject to the provisions of this article. 47 (h) A transfer of legal title or an interest in an entity holding 48 legal title to a housing accommodation pursuant to a bona fide deed of 49 trust or mortgage, and thereafter any transfer by foreclosure sale or 50 deed in lieu of foreclosure pursuant to a bona fide deed of trust or 51 mortgage. 52 (i) A tax sale or transfer pursuant to tax foreclosure. 53 (j) A bankruptcy sale. 54 3. Exemption procedures. The owner of a rental housing accommodation, 55 or an individual, group of individuals, organization or facility whichS. 221--A 6 1 believe that they are exempt under this article shall comply with proce- 2 dures that DHCR shall create for claiming such an exemption. 3 4. Voluntary election to participate. An owner whose property or 4 planned transaction is exempt from this article pursuant to sections 5 seven hundred ninety-nine-b or seven hundred ninety-nine-c of this arti- 6 cle may elect to subject their property to this article by complying 7 with procedures that DHCR shall promulgate through regulations, provided 8 that the owner who voluntarily subjects their property to this article 9 shall comply with this article in its entirety. Each tenant living in 10 such property shall be granted all of the rights described in this arti- 11 cle, including the opportunity to decide whether to exercise their right 12 of first refusal under section seven hundred ninety-nine-d of this arti- 13 cle. No owner shall be eligible for incentives described in section 14 seven hundred ninety-nine-q of this article without complying with this 15 article in its entirety. 16 § 799-d. Right of first refusal. 1. General construction. This 17 section shall be construed to confer a right of first refusal only upon 18 each tenant, tenant organization, and qualified purchaser. 19 2. Offer of sale to tenants, tenant organizations, and qualified 20 purchasers. Before an owner of a rental housing accommodation may sell 21 or accept an offer to sell a rental housing accommodation, the owner 22 shall give each tenant, tenant organization or qualified purchaser an 23 opportunity to purchase such rental housing accommodation at a price and 24 terms that represent a bona fide offer of sale. 25 (a) The owner's offer of sale shall include, at minimum: 26 (i) The asking price and terms of the sale. The terms and conditions 27 shall be consistent with the applicable timeframes described in subdivi- 28 sions three and four of this section; 29 (ii) A statement as to whether a purchase contract with a third-party 30 purchaser exists for the sale of the rental housing accommodation, and 31 if so, a copy of such purchase contract; and 32 (iii) A statement in English and at least one other language within 33 the property's census tract based on the latest United States Census, 34 stating that if the tenant requires the offer of sale in a language 35 other than English, they may contact DHCR and request the offer of sale 36 in their requested language and/or the assistance of an interpreter. 37 (b) If a tenant or tenant organization is receiving the offer of sale, 38 the owner shall deliver a written copy of the offer of sale to each 39 tenant or tenant organization by certified mail or e-mail. 40 (c) If a qualified purchaser is receiving the offer of sale, the owner 41 shall deliver the offer of sale to each qualified purchaser that previ- 42 ously made an offer to purchase the rental housing accommodation, and to 43 each tenant, by certified mail or e-mail. The owner shall submit an 44 offer of sale to each such qualified purchaser on the same day, and to 45 the extent possible, at the same time. 46 (d) If the owner has a purchase contract with a third-party purchaser 47 for the sale of the rental housing accommodation, the owner shall deliv- 48 er the offer of sale to each tenant, tenant organization or qualified 49 purchaser within two days of entering into a purchase contract with the 50 third-party purchaser. 51 (e) The owner shall also provide DHCR with a written copy of the offer 52 of sale and a statement certifying that the items described by paragraph 53 (a) of this subdivision were delivered to each tenant, tenant organiza- 54 tion, or qualified purchaser. 55 3. Time to accept offer. (a) The following procedures shall apply:S. 221--A 7 1 (i) Upon receipt of the offer of sale from the owner, a tenant organ- 2 ization shall have forty-five days to accept the offer of sale. 3 (ii) Upon receipt of the offer of sale from the owner, a qualified 4 purchaser shall have thirty days to accept the offer of sale. 5 (iii) The deadline to accept any offer of sale shall be extended as 6 necessary to allow the tenant organization or qualified purchaser to 7 exercise their right to an appraisal pursuant to section seven hundred 8 ninety-nine-l of this article, if they believe that the offer of sale is 9 not a bona fide offer of sale. 10 (b) If, during these time periods, any qualified purchaser that has 11 received such offer of sale decides to accept the owner's offer of sale, 12 such qualified purchaser shall notify the owner and every other quali- 13 fied purchaser of such decision by e-mail or certified mail. After a 14 qualified purchaser notifies the owner of its decision to accept the 15 owner's offer of sale, meaning before any other qualified purchaser so 16 notified the owner, such qualified purchaser shall be deemed to have 17 accepted the offer of sale, and no other qualified purchaser shall 18 accept the owner's offer of sale, whether or not the time periods in 19 this subdivision have elapsed. 20 4. Time to secure financing and close. If a tenant, tenant organiza- 21 tion, or qualified purchaser accepts an owner's offer of sale in accord- 22 ance with this article, the owner shall afford such tenant, tenant 23 organization, or qualified purchaser time to secure financing and close, 24 consistent with this article. 25 5. Rejection of offer. If each tenant, each tenant organization, and 26 qualified purchaser that received an offer of sale consistent with this 27 article, rejects such offer of sale or fails to respond within the time- 28 lines described in this section, the owner may immediately proceed with 29 the sale of the rental housing accommodation to a third-party purchaser 30 consistent with the price and material terms of that offer of sale. 31 § 799-e. Tenant decision-making; tenant organizations. 1. Tenant 32 decision-making. Except in the case of a duly formed tenant organiza- 33 tion, any action required of tenants under this article shall be 34 approved by at least a majority of tenant-occupied units. 35 2. Tenant organizations. (a) In order to submit an offer and respond 36 to the owner's offer of sale pursuant to section seven hundred ninety- 37 nine-d of this article, tenants shall: 38 (i) Form a tenant organization, approved by the requirements described 39 in subdivision one of this section, unless such a tenant organization 40 already exists in a form approved by the tenants. 41 (ii) Select a supportive partner, meeting the criteria described in 42 section seven hundred ninety-nine-g of this article. 43 (iii) Deliver an application for registration of the tenant organiza- 44 tion to DHCR, and deliver a copy of such application to the owner, by 45 hand or by certified mail on or before the deadline of submitting an 46 offer of purchase pursuant to section seven hundred ninety-nine-d of 47 this article. Such application shall include: 48 (A) the name, address, and phone number of tenant officers and the 49 supportive partner; 50 (B) a copy of the formation document, as filed; 51 (C) a copy of the governing document; 52 (D) documented approval that the tenant organization represents a 53 majority under subdivision one of this section as of the time of regis- 54 tration; and 55 (E) such other information as DHCR may reasonably require.S. 221--A 8 1 (b) Tenants may form and register the tenant organization with DHCR 2 pursuant to this subdivision at any time, provided that this section 3 shall not be construed to alter the time periods within which a tenant 4 organization may exercise the rights afforded by this article. 5 (c) Upon registration with DHCR, the tenant organization shall consti- 6 tute the sole representative of the tenants for purposes of this arti- 7 cle. 8 § 799-f. Qualified purchasers. 1. Qualified purchaser criteria. DHCR 9 shall establish an administrative process for certifying qualified 10 purchasers that shall include, but not be limited to, the following 11 minimum criteria: 12 (a) The purchaser is a bona fide nonprofit, as evidenced by the fact 13 that it is exempt from federal income tax under 26 U.S.C. § 501(c)(3); 14 (b) The purchaser has demonstrated a commitment to either: 15 (i) democratic residential control, as evidenced by its ownership and 16 governance structure and relationship with residents; or 17 (ii) a commitment to community engagement, as evidenced by relation- 18 ships with neighborhood-based organizations or tenant counseling organ- 19 izations; 20 (c) The purchaser has agreed to transfer ownership of the rental hous- 21 ing accommodation to the tenants when feasible if its tenants request 22 such transfer of ownership; 23 (d) The purchaser has demonstrated a commitment to the provision of 24 affordable housing for moderate, low, very low, and extremely low income 25 New York state residents, and to prevent the displacement of such resi- 26 dents; 27 (e) The purchaser has agreed to obligate itself and any successors in 28 interest to maintain the permanent affordability of the rental housing 29 accommodation, in accordance with section seven hundred ninety-nine-p of 30 this article; 31 (f) The purchaser has demonstrated the capacity, including, but not 32 limited to, the legal and financial capacity, to effectively acquire and 33 manage residential real property in New York state; 34 (g) The purchaser has acquired or partnered with another housing 35 development organization or nonprofit organization to acquire at least 36 one residential building using any public or community funding, or has 37 entered into a written memorandum of understanding with another housing 38 development organization or nonprofit organization for the purpose of 39 partnering with a housing development organization or nonprofit organ- 40 ization to acquire residential buildings using public or community fund- 41 ing; and 42 (h) The purchaser has agreed to attend mandatory training to be deter- 43 mined, from time to time, by DHCR. 44 2. Certification, term, and renewal. Purchasers that DHCR certifies as 45 having met the criteria in subdivision one of this section shall be 46 known as "qualified purchasers". A purchaser's certification as a qual- 47 ified purchaser shall be valid for four years. DHCR shall solicit new 48 applications for qualified purchaser status at least once each calendar 49 year, at which time existing qualified purchasers shall be eligible to 50 apply for renewed certification as qualified purchasers. 51 3. Existence and publication of qualified purchasers list. DHCR shall 52 publish on its website, and make available upon request, a list of qual- 53 ified purchasers. In addition to such other information as DHCR may 54 include, such list shall include contact information for each qualified 55 purchaser. Such contact information shall include, but need not beS. 221--A 9 1 limited to, a mailing address, an e-mail address that the qualified 2 purchaser monitors regularly, and a telephone number. 3 4. Disqualification of qualified purchaser and conflicts of interest. 4 DHCR shall promptly investigate any complaint alleging that a qualified 5 purchaser has failed to comply with this section. Subject to regulations 6 promulgated by DHCR, if, after providing the qualified purchaser with 7 notice and opportunity to be heard, DHCR determines that a purchaser 8 listed as a qualified purchaser has failed to comply with this section, 9 DHCR may suspend or revoke that purchaser's certification as a qualified 10 purchaser. DHCR shall establish a process for addressing potential and 11 actual conflicts of interests that may arise among supportive partners, 12 qualified purchasers, and tenants through promulgation of regulations. 13 § 799-g. Supportive partners. 1. Supportive partner criteria. DHCR 14 shall establish an administrative process for certifying individuals or 15 organizations that meet the following minimum criteria: 16 (a) The individual or organization has demonstrated ability and capac- 17 ity to guide and support tenants in forming a tenant organization; 18 (b) The individual or organization has demonstrated ability and capac- 19 ity to assist tenants in understanding and exercising their rights under 20 this article; 21 (c) The individual or organization has demonstrated expertise, or 22 existing partnerships with other organizations with demonstrated exper- 23 tise, to counsel tenants on first-time homeownership and collective 24 ownership structures; 25 (d) The individual or organization has a demonstrated commitment to 26 creating democratic resident-controlled housing; and 27 (e) The individual or organization has agreed to attend mandatory 28 trainings, to be determined, from time to time, by DHCR. 29 2. Certification, term, and renewal. Individuals and organizations 30 that DHCR certifies as having met the criteria in subdivision one of 31 this section shall be known as "supportive partners". An individual or 32 organization's certification as a supportive partner shall be valid for 33 four years. DHCR shall solicit new applications for supportive partner 34 status at least once each calendar year, at which time existing support- 35 ive partners shall be eligible to apply for renewed certification as 36 supportive partners. 37 3. Purpose of supportive partner. A supportive partner shall function 38 in a supportive role to assist tenants in exercising their rights under 39 this article. This article shall not confer any rights to a supportive 40 partner. A supportive partner shall be distinct from a qualified 41 purchaser that is conferred subordinated rights under this article as 42 described in section seven hundred ninety-nine-g of this article. DHCR 43 may determine that a qualified purchaser described in section seven 44 hundred ninety-nine-f of this article that meets the criteria in subdi- 45 vision one of this section shall also be eligible to serve as a support- 46 ive partner. DHCR may also serve as a supportive partner. 47 4. Existence and publication of supportive partners list. DHCR shall 48 publish on its website, and make available upon request, a list of 49 supportive partners. In addition to such other information as DHCR may 50 include, this list shall include contact information for each supportive 51 partner. Such contact information shall include, but need not be limited 52 to, a mailing address, an e-mail address that the supportive partner 53 monitors regularly, and a telephone number. 54 5. Disqualification of supportive partner and conflicts of interest. 55 DHCR shall promptly investigate any complaint alleging that a supportive 56 partner has failed to comply with this section. Subject to regulationsS. 221--A 10 1 promulgated by DHCR, if, after providing the supportive partner with 2 notice and opportunity to be heard, DHCR determines that an individual 3 or organization listed as a supportive partner has failed to comply with 4 this section, DHCR may suspend or revoke such individual or organiza- 5 tion's certification as a supportive partner. DHCR shall establish a 6 process for addressing potential and actual conflicts of interests that 7 may arise among supportive partners, qualified purchasers, and tenants 8 through promulgation of regulations. 9 § 799-h. Assignment of rights. 1. A tenant or tenant organization may 10 assign rights under this section in compliance with sections seven 11 hundred ninety-nine-d and seven hundred ninety-nine-e to a qualified 12 purchaser of their choice. 13 2. Subject to regulations promulgated by DHCR, the assignment of 14 rights described in this section shall occur prior to the tenant or 15 tenant organization waiving their rights pursuant to section seven 16 hundred ninety-nine-i of this article, and only during the process 17 provided in section seven hundred ninety-nine-d of this article. Except 18 as provided in section seven hundred ninety-nine-i of this article, the 19 waiver and assignment of rights shall be made in a written agreement 20 executed by the tenant or tenant organization and the qualified purchas- 21 er. 22 3. Qualified purchasers shall not accept any payment, consideration, 23 or reward in exchange for the assignment of rights under this section. 24 § 799-i. Waiver of rights. 1. Tenants may affirmatively waive their 25 rights before the time periods specified in section seven hundred nine- 26 ty-nine-d of this article elapse, by notifying the owner in writing, 27 signed by the tenants and in compliance with section seven hundred nine- 28 ty-nine-e of this article. 29 2. Tenants' failure to complete actions required under section seven 30 hundred ninety-nine-d of this article within the allotted time periods, 31 and any extensions thereof, shall be deemed an implied waiver of such 32 tenants' rights. 33 § 799-j. Notice requirements. Any notices required or permitted by 34 this article shall also comply with regulations promulgated by DHCR. 35 DHCR shall develop model notices which owners may choose to use to 36 comply with the requirements of this section and shall make such notices 37 accessible to owners, including but not limited to, posting such notices 38 on DHCR's website. Such model notice shall include a list of certified 39 qualified purchasers. 40 § 799-k. Third-party purchaser rights. The right of a third-party to 41 purchase a rental housing accommodation shall be conditional upon the 42 exercise of tenant, tenant organization, and qualified purchaser rights 43 under this article. The time periods for submitting and accepting an 44 offer, securing financing, and closing under this article shall be mini- 45 mum periods, and the owner may afford any tenant, tenant organization, 46 and qualified purchaser a reasonable extension of such period, without 47 liability under a third-party purchase contract. Owners shall be 48 responsible for alerting any third-party purchasers regarding the appli- 49 cability of the tenant's right to purchase the property. Third-party 50 purchasers shall be presumed to act with full knowledge of the rights of 51 tenants, tenant organizations, and qualified purchasers and public poli- 52 cy under this article. 53 § 799-l. Right to appraisal. 1. Right to appraisal. This section shall 54 apply whenever an offer of sale is made to a tenant, tenant organiza- 55 tion, or qualified purchasers as required by this article and the offer 56 is made in the absence of an arm's-length third-party purchase contract.S. 221--A 11 1 2. Request for appraisal. The tenant, tenant organization, or quali- 2 fied purchaser that receives an owner's offer of sale may challenge such 3 offer of sale as not being a bona fide offer of sale, and request an 4 appraisal to determine the fair market value of the rental housing 5 accommodation. The party requesting the appraisal shall be deemed the 6 "petitioner" for purposes of this section. The petitioner shall deliver 7 the written request for an appraisal to DHCR and the owner by hand or by 8 certified mail within five days of receiving the offer of sale. 9 3. Time for appraisal. Beginning with the date of receipt of a written 10 request for an appraisal, and for each day thereafter until the peti- 11 tioner receives the appraisal, the time periods described in subdivision 12 three of section seven hundred ninety-nine-d of this article shall be 13 extended by an additional time of up to ten business days. 14 4. Selection of appraiser. The petitioner shall select an appraiser 15 from a list of independent, qualified appraisers, that DHCR shall main- 16 tain. DHCR-approved appraisers shall hold an active appraiser license 17 issued by the New York state board of real estate appraisal and shall be 18 able to conduct an objective, independent property valuation, performed 19 according to professional industry standards. All appraisers shall 20 undergo training organized by DHCR before they are approved and added to 21 the DHCR's list. 22 5. Cost of appraisal. The petitioner shall be responsible for two- 23 thirds and the owner shall be responsible for one-third of the total 24 cost of the appraisal. 25 6. Appraisal procedures and standards. The owner shall give the 26 appraiser full, unfettered access to the property. The owner shall 27 respond within five days to any request for information from the 28 appraiser. The petitioner may give the appraiser information relevant to 29 the valuation of the property. The appraisal shall be completed expe- 30 ditiously according to standard industry timeframes. An appraised value 31 shall only be based on rights an owner has as a matter-of-right as of 32 the date of the alleged bona fide offer of sale, including any existing 33 right an owner may have to convert the property to another use. Within 34 the restrictions in this subdivision, an appraised value may take into 35 consideration the highest and best use of the property. 36 7. Validity of appraisal. The determination of the appraised value of 37 the rental housing accommodation, in accordance with this section, shall 38 become the sales price of the rental housing accommodation in the bona 39 fide offer of sale, unless: 40 (a) The owner and the petitioner agree upon a different sales price of 41 the rental housing accommodation; or 42 (b) The owner elects to withdraw the offer of sale altogether within 43 fourteen days of receipt of the appraisal, in which case: 44 (i) the owner shall withdraw the offer of sale by delivering a written 45 notice by hand or by certified mail to DHCR and to the petitioner; 46 (ii) upon withdrawal, the owner shall reimburse the petitioner and 47 DHCR for their share of the cost of the appraisal within fourteen days 48 of delivery of written notice of withdrawal; and 49 (iii) an owner who withdraws an offer of sale in accordance with this 50 paragraph shall be precluded from proceeding to sell the rental housing 51 accommodation to a third-party purchaser without complying with this 52 section by honoring the right of first refusal of tenants, tenant organ- 53 izations and qualified purchasers; or 54 (c) The petitioner elects to withdraw the offer of sale altogether 55 within fourteen days of receipt of the appraisal, in which case:S. 221--A 12 1 (i) the petitioner shall withdraw the offer of sale by delivering a 2 written notice by hand or by certified mail to DHCR and to the owner; 3 and 4 (ii) upon withdrawal, the petitioner shall reimburse the owner and 5 DHCR for their share of the cost of the appraisal within fourteen days 6 of delivery of written notice of withdrawal. 7 § 799-m. Purchase contract negotiation. 1. Bargaining in good faith. 8 The owner and any tenant, tenant organization, and/or qualified purchas- 9 er shall bargain in good faith regarding the terms of any offer for 10 sale. Any one of the following shall constitute prima facie evidence of 11 bargaining without good faith: 12 (a) The failure of an owner to offer a tenant, tenant organization, or 13 qualified purchaser a price and other material terms at least as favora- 14 ble as that offered to a third-party purchaser; 15 (b) Any requirement by an owner that a tenant, tenant organization, or 16 qualified purchaser waive any right under this article; or 17 (c) The intentional failure of an owner, tenant, tenant organization, 18 or qualified purchaser to comply with the provisions of this article. 19 2. Reduced price. If the owner sells or contracts to sell the rental 20 housing accommodation to a third-party purchaser for a price less than 21 the price offered to the tenant, tenant organization, or qualified 22 purchaser in the offer of sale, or for other terms, which would consti- 23 tute bargaining without good faith, the owner shall comply anew with all 24 requirements of this article, as applicable. 25 3. Termination of rights. The intentional failure of any tenant, 26 tenant organization, or qualified purchaser to comply with the 27 provisions of this article shall result in the termination of their 28 rights under this article. 29 § 799-n. No selling of rights. 1. A tenant, tenant organization, or 30 qualified purchaser shall not sell or otherwise convey any rights under 31 this article. 32 2. An owner shall not coerce a tenant or tenant organization to waive 33 their rights under this article. 34 § 799-o. Tenant protections. 1. No tenant in the rental housing accom- 35 modation, including tenants who do not exercise rights to purchase under 36 this article, shall be evicted by the TOPA buyer, for a failure to 37 purchase or for any other reason applicable to expiration of tenancy, 38 except for good cause; provided that such proceedings may be commenced 39 for non-payment of rent, illegal use or occupancy of the premises, 40 refusal of reasonable access to the owner or a similar breach by the 41 non-purchasing tenant of their obligations to the purchaser. 42 2. Should there by an expiration of the maximum allowable rent 43 provision of the state's emergency tenant protection regulations, and 44 the state's rent stabilization code, promulgated by the division of 45 housing and community renewal, TOPA buyers shall adjust the rent annual- 46 ly to allow an increase of no more than the increase in the CPI. 47 § 799-p. Price stabilization. 1. Price stabilization. A rental housing 48 accommodation purchased by a TOPA buyer under this article shall be 49 subject to permanent affordability restrictions as set forth in this 50 section and by regulations promulgated by DHCR, which shall be promul- 51 gated with the intent of fulfilling the purpose of this section. 52 2. Term. Subject to regulations promulgated by DHCR, permanent afford- 53 ability standards shall restrict the use of the rental housing accommo- 54 dation to require that permanent affordability restrictions remain in 55 force for ninety-nine years and with an option to renew at year oneS. 221--A 13 1 hundred. This subdivision shall not be construed to apply only to commu- 2 nity land trusts. 3 3. Permanent affordability. In exchange for the rights conferred under 4 this section, each TOPA buyer shall agree to maintain the permanent 5 affordability of the rental housing accommodation. No TOPA buyer shall 6 be entitled to a purchase contract under this section without executing 7 an agreement with DHCR to limit the future appreciation of the rental 8 housing accommodation and only sell, or rent, to income-eligible house- 9 holds in accordance with this section, section seven hundred ninety- 10 nine-q of this article and relevant standards and exemptions created by 11 DHCR through regulation. Under such agreement, each TOPA buyer shall 12 represent to DHCR that they agree to be bound by the permanent afforda- 13 bility requirements under this section. The TOPA buyer shall deliver 14 such agreement to DHCR no later than the deadline for submitting an 15 offer provided under section seven hundred ninety-nine-d of this arti- 16 cle. 17 4. Permanent affordability standards for tenants or tenant organiza- 18 tions. For a tenant or tenant organization purchasing a rental housing 19 accommodation, permanent affordability standards created by DHCR shall: 20 (a) Restrict the resale price of the rental housing accommodation, or 21 separate ownership interests in the rental housing accommodation, by 22 limiting the annual market appreciation of the rental housing accommo- 23 dation, or separate ownership interest, to a percentage increase as 24 agreed upon by DHCR or the regulating municipal housing agency, not to 25 exceed an annual interest rate of three percent simple; 26 (b) Ensure that a unit in which a tenant determines to remain a renter 27 following a purchase under this article shall be maintained as a unit 28 subject to the requirements of section seven hundred ninety-nine-o of 29 this article, unless DHCR determines a valid exemption or alternative 30 standard should apply for such unit assisted by DHCR or other public 31 subsidy program which is subject to separate permanent affordability 32 requirements; and 33 (c) At minimum, make the restricted resale price of the rental housing 34 accommodation, or ownership interests in the rental housing accommo- 35 dation, available only to households with income at or below the average 36 AMIs of the initial TOPA buyers as of the initial purchase date of the 37 rental housing accommodation, as verified and recorded by DHCR as of the 38 initial purchase date and not to exceed one hundred percent of AMI. 39 5. Permanent affordability standards for qualified purchasers. For 40 qualified purchasers purchasing the rental housing accommodation, perma- 41 nent affordability standards created by DHCR shall: 42 (a) Restrict the resale price of the rental housing accommodation, or 43 separate ownership interests in the rental housing accommodation, by 44 limiting the annual appreciation of the rental housing accommodation, or 45 separate ownership interest, to a percentage increase as agreed upon by 46 DHCR or the regulating municipal housing agency, not to exceed an annual 47 interest rate of three percent simple; 48 (b) Ensure that a unit in which a tenant determines to remain a renter 49 following a purchase under this article shall be maintained as a unit 50 subject to the requirements of section seven hundred ninety-nine-o of 51 this article, unless DHCR determines a valid exemption or alternative 52 standard should apply for such unit assisted by DHCR or other public 53 subsidy program which is subject to separate permanent affordability 54 requirement; and 55 (c) Prioritize making vacant or vacated units in the rental housing 56 accommodation available to households with incomes at or below the aver-S. 221--A 14 1 age median income by zip code at the time of purchase but not to exceed 2 eighty percent of AMI. 3 6. Mechanism. Permanent affordability restrictions shall materialize 4 as at least one of the following: 5 (a) A restrictive covenant placed on the recorded title deed to the 6 rental housing accommodation that runs with the land and is enforceable 7 by DHCR against the TOPA buyer and its successors, and other affordabil- 8 ity restrictions in land leases or other recorded documents not specif- 9 ically listed in this subdivision, so long as DHCR determines that such 10 restrictions are enforceable and likely to be enforced such as a 11 recorded mortgage promissory note and/or regulatory agreements with 12 local housing agencies where government subsidies are involved; and 13 (b) A community land trust lease, which is a ninety-nine-year renewa- 14 ble land lease with affordability and owner-occupancy restrictions. 15 7. Required recordings and filings. (a) All covenants created in 16 accordance with section seven hundred ninety-nine-o of this article 17 shall be recorded before or simultaneously with the close of escrow in 18 the office of the county recorder where the rental housing accommodation 19 is located and shall contain a legal description of the rental housing 20 accommodation, indexed to the name of the TOPA buyer as grantee. 21 (b) Each TOPA buyer of the rental housing accommodation shall be 22 required to file a document annually with DHCR in which the TOPA buyer 23 affirmatively states the rents and share price for each unit in the 24 rental housing accommodation. DHCR may engage a third-party monitoring 25 agent to monitor the compliance of this subdivision, pursuant to DHCR 26 regulations. 27 § 799-q. Incentives. 1. Access to buyers. DHCR shall endeavor to main- 28 tain and publicize the list of qualified purchasers in a manner that, to 29 the maximum extent feasible, promotes the existence of the qualified 30 purchasers as a readily accessible pool of potential buyers for covered 31 properties. DHCR shall, to the maximum extent permitted by law and 32 otherwise feasible, publicize the existence of this list in a manner 33 intended to facilitate voluntary sales to qualified purchasers in a 34 manner that avoids or minimizes the need for a broker, other search 35 costs, or other transactions. 36 2. Partial transfer tax exemption. The tax rate shall be reduced in 37 accordance with section fourteen hundred two of the tax law with respect 38 to any deed, instrument, or writing that affects a transfer under this 39 article. 40 3. Potential federal tax benefits. Any qualified purchaser that 41 purchases a rental housing accommodation under the right of first 42 refusal set forth in section seven hundred ninety-nine-d of this article 43 shall, to the maximum extent permitted by law and otherwise feasible, be 44 obliged to work with the owner in good faith to facilitate an exchange 45 of real property of the kind described in 26 U.S.C. § 1031, for the 46 purpose of facilitating the owner's realization of any federal tax bene- 47 fits available under that section of the internal revenue code. 48 4. Information to owners. DHCR shall produce an information sheet 49 describing the benefits of an owner's decision to accept a tenants' or 50 qualified purchaser's offer of purchase made in connection with the 51 right of first refusal established in this article. DHCR shall make 52 this information sheet accessible to owners and buyers by publication on 53 DHCR's website. 54 § 799-r. Enforcement. 1. Powers and duties of DHCR. DHCR shall be 55 authorized to take all appropriate action, including but not limited toS. 221--A 15 1 the actions specified in section seven hundred ninety-nine-a of this 2 article, to implement and enforce this article. 3 2. Implementation. (a) DHCR shall promulgate rules and regulations 4 consistent with this article. 5 (b) DHCR shall adopt regulations to implement a petition and hearing 6 procedure for administering the enforcement of this article. 7 (c) DHCR shall establish and make available standard documents to 8 assist owners, tenants, tenant organizations, and qualified purchasers 9 in complying with the requirements of this article through an online 10 portal, provided that use of such documents does not necessarily estab- 11 lish compliance. 12 (d) Owner certification and disclosures. Every owner of a residential 13 property in the state shall, within fifteen days of the sale of such 14 residential property, submit to DHCR a signed declaration, under penalty 15 of perjury, affirming that the sale of such residential property 16 complied with the requirements of this article. Such declaration shall 17 include the address of the relevant residential property and the name of 18 each new owner of the rental housing accommodation. DHCR shall publish 19 all such addresses on its website. Failure to file a declaration 20 required by this paragraph shall result in the penalty described in 21 subparagraph (i) of paragraph (b) of subdivision three of this section. 22 3. Enforcement. (a) Civil action. Any party may seek enforcement of 23 any right or provision under this article through a civil action filed 24 with a court of competent jurisdiction and, upon prevailing, shall be 25 entitled to remedies, including those described in paragraph (b) of this 26 subdivision. 27 (b) Penalties and remedies. 28 (i) Civil penalties. An owner who willfully or knowingly violates any 29 provision of this article shall be subject to a cumulative civil penalty 30 imposed by DHCR in the amount of up to one thousand dollars per day, per 31 tenant-occupied unit in a rental housing accommodation, for each day 32 from the date the violation began until the requirements of this article 33 are satisfied, payable to the New York housing trust fund. 34 (ii) Legal remedies. Remedies in civil action brought under this 35 section shall include the following, which may be imposed cumulatively: 36 (A) Damages in an amount sufficient to remedy the harm to the plain- 37 tiff; 38 (B) In the event that an owner sells a rental housing accommodation 39 without complying with the requirements of this article, and if the 40 owner's violation of this article was knowing or willful, mandatory 41 civil penalties in an amount proportional to the culpability of the 42 owner and the value of the rental housing accommodation. There shall be 43 a rebuttable presumption that this amount is equal to ten percent of the 44 sale price of the rental housing accommodation for a willful or knowing 45 violation of this article, twenty percent of the sale price for a second 46 willful or knowing violation, and thirty percent of the sale price for 47 each subsequent willful or knowing violation. Civil penalties assessed 48 under this paragraph shall be payable to the New York housing trust 49 fund; and 50 (C) Reasonable attorneys' fees. 51 (iii) Equitable remedies. In addition to any other remedy or enforce- 52 ment measure that a tenant, tenant organization, qualified purchaser, or 53 DHCR may seek under this section, any court of competent jurisdiction 54 may enjoin any sale or other action of an owner that would be made in 55 violation of this article.S. 221--A 16 1 § 799-s. Statutory construction. The purpose of this article shall be 2 to prevent the displacement of lower-income tenants in New York and to 3 preserve affordable housing by providing an opportunity for tenants to 4 own or remain renters in the properties in which tenants reside as 5 provided in this article. If a court finds ambiguity and there is any 6 reasonable interpretation of this article that favors the rights of the 7 tenant, then the court shall resolve ambiguity toward the end of 8 strengthening the legal rights of the tenant or tenant organization to 9 the maximum extent permissible under law. 10 § 799-t. Administration and reports. 1. DHCR shall report annually on 11 the status of the tenant opportunity to purchase act program to the 12 legislature or to such legislative committee as the legislature may 13 designate. Such reports shall include, but shall not be limited to the 14 following: 15 (a) Statistics on the number and types of sales of tenant occupied 16 properties; 17 (b) Statistics on the number of tenants and qualified purchasers that 18 invoke action under this article; 19 (c) Number and types of units covered by this article; and 20 (d) Any other information the legislature or legislative committee may 21 request. 22 2. DHCR shall make available translation services in languages other 23 than English, where requested in advance by a tenant, tenant organiza- 24 tion, qualified purchaser, owner, or member of the public as it relates 25 to TOPA, to interpret and translate documents and procedures as needed. 26 § 3. Severability clause. If any clause, sentence, paragraph, subdivi- 27 sion, section or part of this act shall be adjudged by any court of 28 competent jurisdiction to be invalid, such judgment shall not affect, 29 impair, or invalidate the remainder thereof, but shall be confined in 30 its operation to the clause, sentence, paragraph, subdivision, section 31 or part thereof directly involved in the controversy in which such 32 judgement shall have been rendered. It is hereby declared to be the 33 intent of th legislature that this act would have been enacted even if 34 such invalid provisions had not been included herein. 35 § 4. This act shall take effect on the one hundred eightieth day after 36 it shall have become a law. Effective immediately, the addition, amend- 37 ment and/or repeal of any rule or regulation necessary for the implemen- 38 tation of this act on its effective date are authorized to be made and 39 completed on or before such effective date.
