Mayor Jesse Arreguin (in coordination with Rent Board Commissioner Leah Simon-Weisberg) has announced his intention to introduce the "Tenant Opportunity to Purchase Act" (TOPA). Inspired by the Moms 4 Housing movement, it's sponsors claim TOPA will "solve homelessness" and will increase ownership opportunities for tenants. But this is far from the truth.
TOPA has been in the works for years. It is clear that the true intention of the legislation is not to help underprivileged tenants, or aim to prevent homelessness at all. In reality, it's granting the city the power to dictate how properties are sold, to whom they can be sold, and even how much they can be sold for!
This is the most aggressive assault on private property rights. TOPA is eminent domain in disguise. It will have devastating effects on owners, tenants and the future of our city. This only benefits outside special interest groups, lawyers, and complicit politicians.
Modeled on the failed Washington D.C. legislation, and on the heels of total non-partisan rejection by outraged City of Richmond residents late last year, the Berkeley bill goes as far as it can to stepping on private property rights.
First right of refusal. TOPA demands you offer your property to all tenants, before it is placed on the open market. this prevents your property from going on the market for sale, until every renter waives his or her rights in writing. This will create lengthy, unpredictable time periods that will frustrate a sale and create perverse incentives for tenants.
Second right of refusal. In addition to offering the tenant a first right of refusal, each owner will also need to inform each and every listed nonprofit developer or "partner" - approved by the city - of the owner's intent to sell.
Transfer of rights to a third party. In Washington D.C., this resulted in property owners being extorted by tenants to sell their first right of refusal.
A city -approved appraiser will determine the price of your sale. It allows for the tenant to challenge your offer to them, by activating a "city-approved" appraiser who will assess the price of your sale. That price will then become the price you must offer to your tenant or the nonprofit.
Any owner found in violation of TOPA could be fined $1,000 per day, per unit!
1. Tenants and tenant organizations have the right to purchase your rental property before you may sell, demolish, or withdraw the property from the rental market.
2. an owner has the burden of proof to establish that an offer for sale is a bona fide offer and the tenant (or nonprofit) has 45 days to challenge that.
3. The challenger may request appraisal by a "city-approve" appraiser. Owner, city, and tenant will each pay 1/3 of the appraisal cost.
4. The owner shall provide info requested by the appraiser within 7 days. Tenants may also provide info to the appraiser about the property.
5. The appraisal price shall become the sale price (no going out on the open market to see what price the market will bear).
6. Owner may withdraw from sale, in which case they will be responsible for reimbursing the city and the tenant for the cost of the appraisal.
7. Tenant may assign the right (at any time) to the city-approved nonprofit or "partner."
8. For single family homes, tenants have 30 days to challenge the sale, then 60 days to negotiate, then 60 dayst o settle, and then extendable to an additional 90 days if they need more time to secure financing. If the 180 days pass and the property has not sold, the process starts all over again.
For duplex, triplex or fourplex, the times period above are extended, up to a maximum of 240 days. for 5+ units, the periods are further extended.
9. The owner may not request that a tenant waive their right of first refusal nor may an owner require a tenant to prove their financial ability to purchase.
10. An owner violating any of the TOPA provisions is subject to a $1,000 per day, per unit fine.
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