Did You Know? Community Opportunity to Purchase Act (COPA)
Selling to San Francisco’s Non-Profit Landlords
Are you thinking of selling your San Francisco property soon? You may be required to present it to qualifying non-profits before it goes out to the open market.
The Community Opportunity to Purchase Act (COPA) is an essential topic for landlords to grasp, as it influences property sales dynamics. This article aims to provide landlords with a clear overview of COPA's significance and implications.
What is the purpose of COPA? What Properties are Affected by COPA?
The Community Opportunity to Purchase Act (COPA) is a legal framework designed to address housing affordability challenges. It empowers qualifying non-profit organizations with the right of first offer or right of first refusal when you, as a landlord, decide to sell properties with three or more residential units or vacant land with development potential within a city. COPA aims to strike a balance between your property rights and the broader goal of maintaining affordable housing options and community stability.
What is the COPA process?
Step 1: Provide Notice to Qualified Organizations, and Right of First Offer
Determine Applicability: Determine whether the COPA ordinance applies to your property. COPA typically applies to properties with three or more residential units.
Notification: Once you decide to sell your multifamily property, you must provide written notice to qualified nonprofit organizations that are on the city's list of eligible COPA purchasers. The notice should include property details such as the address, number of units, and proposed terms of the sale.
Wait Period: Qualified nonprofit organizations have 25 days to express interest in purchasing the property. During this period, they can request additional information about the property and indicate their intention to submit a purchase offer (right of first offer).
Step 2: Review Offers from Qualified Organizations
Receive Offers: If one or more qualified nonprofit organizations express interest, they have an additional 120 days from the end of the initial 25-day period to submit purchase offers.
Evaluation: Evaluate the offers received from the qualified nonprofit organizations. You're not obligated to accept any of these offers, but you must seriously consider them.
Negotiation: You can negotiate the terms of the offers with the nonprofit organizations. If you reach an agreement, you can proceed with the sale to the chosen organization. If you don't reach an agreement, you can move forward with selling to other buyers.
Step 3: Move Forward with the Sale to a Third-Party Buyer, and Right of First Refusal
Proceed with Sale: If you don't receive an offer from a qualified nonprofit organization or if you don't reach an agreement, you can proceed with marketing the property to other buyers.
Right of First Refusal: If a qualified nonprofit organization submitted an offer during the initial 25-day period and you rejected that offer, you must provide them with a right of first refusal when a third-party buyer is found. This means that if you decide to sell the property to a different buyer, you must first offer the property to the nonprofit organization again under the same terms and conditions as the third-party purchaser. The Qualified Non-Profit has no later than 11:59 p.m. on the fifth calendar day after a Seller has submitted notice of an offer of Sale to accept the new terms and conditions.
When does COPA apply to vacant land?
Any vacant land zoned for three or more units must be first presented to Qualified Non-Profits.
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