| Summary |
The bill creates 2 property rights for local governments to certain
types of multifamily rental properties: A right of first refusal and a right
of first offer. The right of first offer is temporary and terminates on
December 31, 2029. For multifamily rental properties that are existing
affordable housing, a local government has a right of first refusal to
match an acceptable offer for the purchase of such property, subject to the
local government's commitment to using the property as long-term
affordable housing. Existing affordable housing is housing that is
currently receiving federal or local financial assistance.
The bill requires the seller of such property to give notice to the
local government at least 2 years before the first expiration of an existing
affordability restriction on the property and again when the seller takes
certain actions as a precursor to selling the property. Upon receiving the
notice indicating intent to sell the property or of a potential sale of the
property, the local government has 14 calendar days to preserve its right
of first refusal and an additional 60 calendar days to make an offer and
must agree to close on the property within 120 calendar days of the
acceptance of the local government's offer. If the price, terms, and
conditions of an acceptable offer that has been communicated to the local
government materially change, the seller must provide notice of the
change within 7 days and the local government may exercise or
re-exercise its right of first refusal. If the residential seller rejects an offer
by the local government, the seller must provide a written explanation of
the reasons and invite the local government to make a subsequent offer
within 14 days.
For all other multifamily rental properties that are 20 years or older
and have not more than 100 units and not less than 5 units in urban
counties and 3 units in rural and rural resort counties, a local government
has a right of first offer. A seller of such property must provide notice of
intent to sell the property to the local government before the seller lists
the property for sale. After receipt of the notice, the local government has
14 days to respond by either making an offer to purchase the property and
stating an intent to perform due diligence and enter into a contract to
purchase the property within 45 days of the date that the residential
seller's notice was received or waiving its right to purchase the property.
The local government's offer is subject to the property being used or
converted for the purpose of providing long-term affordable housing or
mixed-income development. If the local government does not provide a
response in the 14-day period, the right of first offer is waived and the
residential seller can proceed with listing and selling the property to any
third-party buyer. The residential seller has 14 days to accept or reject the
local government's offer and, if the offer is accepted, the local
government has 30 days to close the transaction.
In exercising its right of first refusal or first offer, the local
government may partner with certain other entities for financing of the
transaction and may also assign either right to certain other entities that
are then subject to all the rights and requirements of the local government
in exercising either right.
The bill allows certain sales of property to be exempt from either
the right of first refusal, the right of first offer, or both. The bill also
allows the local government to waive its right of first refusal to purchase
property qualifying for the right if the local government elects to disclaim
its rights to any proposed transaction or for any duration of time.
The bill also requires the attorney general's office to enforce its
provisions and grants the attorney general's office, the local government,
or a mission-driven organization standing to bring a civil action for
violations of the right of first refusal or first offer established by the bill.
If a court finds that a seller has materially violated the law with respect
to the right of first refusal or first offer, respectively, the court must award
a statutory penalty of not less than $30,000.
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