San Francisco Community Opportunity to Purchase Act (COPA) in a nutshell
If you or a client is looking to buy or sell a multi-unit building, you should know that under a newly minted law, qualified nonprofits must be given preferential treatment in the purchase of eligible properties and given deference when matching other offers from private buyers.
In an effort to solve the affordable housing dearth and give “qualified nonprofits” the first chance of permanently protecting rent-controlled buildings from the speculative market, the San Francisco Board of Supervisors unanimously voted to enact the San Francisco Opportunity to Purchase Act (COPA).
Under COPA, sellers of residential buildings with 3 or more units must notify a vetted pool of nonprofit organizations of their intent to sell the rental property, essentially giving the nonprofit buyers the right of first offer - these organizations are entitled to be first in line when multi-unit buildings go on the open market, but it doesn’t end there.
Although the seller is not obligated to hand the keys over to the nonprofit when that group expresses an interest and can entertain other offers from other buyers, the nonprofit must be given the opportunity to match a competing offer from a private party - in legalese, we call this the first right of refusal.
A rather exclusive bunch
The Mayor’s Office of Housing and Community Development was tasked with promulgating regulations, chief among them developing a list of qualified nonprofits. As Bornstein Law predicted, it is a short list we can roll off our tongue, in what amounts to an oligarchy.
However scarce the number of nonprofits, rest assured these organizations have vast legal resources to go after owners and brokers when they sense non-compliance with COPA.
Listen to presentation on COPA
Daniel was privilaged to give a talk on this process, and you can listen to the recording to get a baseline understanding on the obligations that accompany the newfangled law.
Don't have time to watch the movie? Download the slides.
Understand San Francisco's new multi-family building legislation and explore the impact of COPA on sellers, buyers, and real estate brokers.
Till death do us part? Thinking in terms of post-purchase
Deed restrictions will be placed on the building and so once the multi-unit building is sold, it becomes rent-restricted housing in perpetuity - the new landlords cannot set rents that exceed 80% of the Area Median Income.
We hasten to say that existing tenancies will not be impacted - if a tenant is paying market rent when the property is exchanged into the hands of the nonprofit, the rent regulations will not be imposed on the tenant already implanted.
Some loose ends need to be tied up, but here's the answer to some basic questions.
Daniel offers some insights and premonitions into the new law in this video.
We can't predict the future but we can do the next best thing by giving you a glimpse into what is known about COPA and the variables that are yet to be worked out.'
If you your clients are looking to sell, get informed advice.
The sale of multifamily units is ordinarily tough, but the complications are compounded in the era of COPA.