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Minneapolis City Council Holds Study Session on ‘Renters First Right of Refusal’ Tags: Government Affairs

The Minneapolis City Council held a Study Session today on the topic of “Renter First Right of Refusal” or “Renter’s Opportunity to Purchase Housing.” Council President Bender welcomed all attendees and Councilmembers Schroeder and Councilmember Steve Fletcher will be lead authors on ordinance development, when and if an ordinance takes shape. Guests included Danilo Pelletiere and Terrance Laney, Senior Advisors and Rental Conversion & Sale Administrator, Washington DC Department of Housing and Community Development. Additional speakers included Michael Diamond, Professor of Law, Georgetown University Law Center, and Dominic Moulden, Resource Organizer, One DC.

The concept of Renter First Right of Refusal is that tenants are afforded a first right to purchase a property before broader marketing of the property and allows the assignment or sale of those rights as well. Please see the document below describing the sale process, timelines, and requirements. The ordinance has been in place in Washington DC since 1980. The Washington DC Association of REALTORS® “DCAR” was successfully able to amend the ordinance in past few years to exempt Single Family Homes and treat 2-4 unit buildings differently.

In Washington DC the Rental Housing Conversion and Sale Act of 1980 included the Tenant Opportunity to Purchase Act (“TOPA”). Specifically, TOPA regulates the conversion of use, sale, and transfer of rental housing.

Tenants:
• Have the opportunity of invoking their rights to purchase
• Have first rights of refusal
• Receive offer of sale notices
• Receive notices of the transfer and the conversion of property to cooperatives or condominiums

The process involves a TOPA notice, Offer Period (30-45 days), Negotiation Period (up to 120 days), and a Settlement Period (120 days). Additionally, Washington DC recently enacted another program empowering the Mayor with the right to purchase buildings with five or more rental units of which 25 percent are deemed as affordable. This program is called DOPA and is subordinate to TOPA and the timelines are similar and concurrent. The ordinance describes only four outcomes under TOPA:

• Tenants (Tenants Association) purchases the building
• Tenants (Tenants Association) assign their rights to a third party to purchase the building on their behalf and redevelopment/operate it with a development agreement
• Tenants assign their rights typically for some consideration – often vacate the property
• Tenants do not organize or assign their rights and the property is sold to the original purchaser

This is a new concept for consideration in Minneapolis. The study session was certainly very interesting. There was a lot of very good questions from the councilmembers to the invited guests. Minneapolis City Council study sessions are open to the public and fit the definition of the MN open meeting law but that process does not require the group to take questions from the attendee public and they did not do so.

I would like to thank REALTORS® attendees that took time out of their day to attend: Cari Linn, Cotty Lowry, Pat Paulson and Jen Pillar Quade. Feel free to join the next Minneapolis Area REALTORS® Government Affairs Committee on October 16 where we will further discuss this issue.

Author: Eric Myers, Director of Government Affairs

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