Multifamily investors—but mainly landlords—are cringing at a potential six-month pause in their property transaction should the Tenant Opportunity to Purchase Act passes in Massachusetts. The TOPA act will give tenants the ability to purchase the property they live in before it actually goes on the market, by implementing a six-month hold.
Many believe the six-month window is solely so that tenants can group together and get a non-profit organization to support, and buy the property on their behalf.
People who support the bill, including non-profits in the area, assert this will “preserve affordability” and “prevent massive displacement” in the wake of a turbulent pandemic.
“We think the bill has been crafted in a way that balances the interest of sellers and the interests of the community and the residents,” Massachusetts Association of Community Development Corporations CEO Joseph Kriesberg told Bisnow. “Nothing in this bill would prevent an owner from selling his property at the full market value to whomever he wants.”Bisnow.com
However, opposers of TOPA such as MassLandlords, a trade group representing local multifamily operators, acknowledges the burden will mainly be placed on landlords, which in turn are primarily mom-and-pop property owners.
Landlords nationwide are already bound to eviction restrictions and are struggling to payoff even maintenance for their buildings due to tenant inability to pay rent, or tenants simply working the system. Now, landlords in Mass., can have a sale on the horizon, but can be hit with an unexpected six-month period where they still have to endure tenants who are not paying rent.
“He argues that the bill requires the time and expense of arranging a sale before pausing, something most buyers won’t tolerate. ‘Renters already have the right to make an offer to purchase [the properties where they live] — the same as anybody else,’ MassLandlords Executive Director Doug Quattrochi said in an interview. ‘The point of this bill is to delay sales as long as possible so a nonprofit can come in and buy it.'”Bisnow.com
This news, and whether or not it develops into something deemed successful, can also be of concern for multifamily operators in our state of California.
“Earlier this year, Berkeley, California, Mayor Jesse Arreguin proposed a TOPA ordinance for the city. TOPA also is being debated in Oakland and on the state level in Sacramento. A TOPA bill is pending in the New York State Legislature and in the U.S. Congress. Rep. Ilhan Omar, a Democrat who represents Minnesota, included it in legislation she sponsored in April to cancel rent and mortgage payments for people affected by the pandemic.”Bisnow.com