TOPA Didn’t Pass Yet
TOPA Didn’t Pass Yet
Douglas Quattrochi - Doug
Welcome to this next business update. Today, we’ll be talking about the Tenant Opportunity to Purchase Act. This did not pass, but it almost did. Well, if you haven’t heard about it, let me tell you.
The Tenant Opportunity to Purchase Act is an invention by the Community Development Corporations. They wanted to bring a law that has been tried and failed in Washington, D.C., to Massachusetts. The CDCs are nonprofits that operate real estate, and they would like to be able to operate more real estate, but because it’s hard to get underwriting done for a nonprofit, the CDCs are proposing a law that would make landlords wait 220 days to close any occupied multifamily property. The actual proposal is that you have to offer it to your renters, and if they don’t want it, they could gift their right to a Community Development Corporation or another nonprofit.
The process that we’ve outlined based on the proposals in Massachusetts has three different tracks that take up to 220 days altogether.
You would have to sell your property on the market, but then when you get a buyer to write their name on to a purchase and sale agreement, you would take that PNS to your renters and ask if they wanted to replace the buyer’s name with their own name or the name of their tenant association or CDC.
The law is really egregious and clearly hasn’t been written without any landlord or broker input. As a matter of fact, it even calls for small amounts of demolition. We’re not exaggerating, but it allows the renters to destroy your property while they decide if they want to buy it. I think the intent is to look for lead and asbestos, but that’s not spelled out at all. It’s just demolition.
There’s a second track the renters could go down getting a refund. Then the financing track; of course, it’s difficult to finance a profit or a new tenant association. That takes up to 160 days, add it on to the 60 that you have to wait for the renters to decide. That’s how you get 220 days to close.
This has been proposed in Massachusetts before, and most recently at the end of July, it was added onto the Economic Development Bill, which normally is a sure thing in Massachusetts. As a matter of fact, it’s so sure that reps and senators added over 800 amendments trying to get their different projects passed into law because the Economic Development Bill always passes; except this time, it didn’t pass. A 1986 tax law has potentially set us up for billions in dollars in tax rebates because Massachusetts’ revenue increased to fact, according to this old formula.
Now the CDCs really want this TOPA Bill, so it will come back, but we’re going to continue to oppose it and we’re going to continue to take the heat for landlords. One CDC actually reached out to me and called me a vulture to my face, which is why the Banker and Tradesman op-ed that we published just on August 7 says, “Vulture season in Massachusetts is closed for now.”
TOPA stopped. We don't have to deal with the 220-day proposed bill, but it will be back, and we’ll be here to oppose it.
If you want more information, you can follow online. We’ve got two QR codes for you. You’ve got this TOPA page that has the infographic with the 220 days to close and then there’s the Banker and Tradesman article.