COPA FACT SHEET: Intro 902-A (Proposed Amendment)
The purpose of COPA is to give qualified non-profit entities a first opportunity to purchase certain distressed or at-risk residential properties to create and preserve permanently affordable housing.
I. Applicability and Exemptions
II. Definition of a "Covered Property" (Trigger)
A property must have four or more units and meet "distressed" or "at-risk" criteria. The criteria expand one year after the law is effective:
III. The Opportunity to Purchase Process
The law creates a two-stage process for a qualified entity: a Right of First Offer and a subsequent Right of First Refusal.
Initial Notice
Timeline/Process: Owner must provide written notice of intent to sell to HPD and a list of qualified entities at least 5 days before taking any action that will result in the sale (e.g., offering for sale, soliciting offers).
Owner Requirement: Notice must include rent collected per unit, 12-month income/expense report, and outstanding mortgage amount.
1. Statement of Interest
Timeline/Process: Qualified entities have 45 days from the notice date to submit a Statement of Interest.
Owner Requirement: During this 45-day period, the owner may not take any action that results in a sale to a non-qualified entity.
2. Right of First Offer
Timeline/Process: Qualified entities that submitted a statement have an exclusive 90-day period to submit a bona fide offer to purchase.
Owner Requirement: Owner is not required to accept this initial offer. If no offer is submitted, the owner's obligation under this section is waived.
3. Right of First Refusal
Timeline/Process: If the owner rejects the qualified entity's offer and later receives a third-party offer within 1 year, they must notify HPD and the entity within 15 days.
Owner Requirement: The qualified entity has 15 days to exercise a Right of First Refusal by matching the identical price, terms, and conditions of the third-party offer.
Extensions
Timeline/Process: The Commissioner of HPD may extend any time limit for "good cause shown".
IV. Qualified Entities and Penalties
Qualified Entity Criteria:
Must be a 501(c)(3) not-for-profit entity certified by HPD that has demonstrated a commitment to:
  • Providing permanently affordable housing for extremely low-, very low-, and low-income city residents (household income at or below 80% of AMI).
  • Community representation, engagement, and accountability.
  • Capacity (legal/financial) to acquire and manage residential property.
Waiver of Fees:
When an owner sells a covered property to a qualified entity, the Department of HPD shall waive any municipal charges, taxes, and fees associated with the transaction, as applicable.
Non-Compliance Penalty:
An owner who violates any provision of the chapter resulting in the sale to a non-qualified entity shall be liable for a civil penalty amounting to, at a minimum, 3% of the sale price. The qualified entity may also seek injunctive relief.
V. Opinions
https://www.bisnow.com/ - Quote by Victor Sozio, Founding Partner at Ariel Property Advisors
Note: This bill is not final and remains subject to further amendment.