Key Changes in Revised COPA Proposed Legislation (Int. 902-A)

The Community Opportunity to Purchase Act (“COPA”) is a proposed law that would require certain building owners to give qualified nonprofit or mission-driven organizations a first chance to purchase their properties before they may be sold on the open market. The City Council has released a revised version of the bill with important changes.

The original COPA proposal applied broadly to all residential buildings with 3 or more units, regardless of violation history or affordability conditions. Under the revised bill, COPA would apply only to certain residential buildings with 4 or more units. A building would be covered by COPA only if both of the following conditions are met:

1. It is a Class A Residential Building With 4+ Units:

  1. This includes most typical apartment buildings.
  2. Not covered:
  3. 1–3 unit buildings
  4. Owner-occupied 5-unit buildings
  5. Commercial-only properties

2. It Meets at Least One Statutory Condition:

  1. The covered property was placed on an HPD enforcement list (Alternative Enforcement Program, i.e. Emergency Repair Program and Certificate of No Harassment Suspension List).
  2. The covered property is subject to an in rem foreclosure
  3. The covered property is subject to an order to correct underlying conditions
  4. The covered property has certain existing hazardous violations or unpaid municipal charges
  5. The covered property had an affordability restriction expire within the past 2 years
  6. The covered property has an affordability restriction set to expire within the next 2 years

Penalties for Noncompliance:

The original COPA bill imposed civil penalties of up to $30,000 for noncompliance.

Under the revised bill, if an owner violates COPA and sells a covered building to a non-qualified buyer, the owner faces a civil penalty of at least 3% of the sale price. Qualified entities may also seek an injunction to stop the sale.

Who Are Qualified Entities?

Qualified entities are HPD-approved nonprofit or mission-driven organizations eligible to participate in COPA transactions.

  1. HPD maintains a public list of all qualified entities.
  2. Once approved, these organizations automatically receive COPA notices for any covered property.
  3. Owners do not choose or notify these organizations individually; rather, the Owner notifies HPD of the transaction and HPD distributes all notice to such Qualified Entities.

Sale Requirements:

Before an owner sells a covered property, the owner must notify HPD at least 5 days before taking any action to sell (including listing or accepting an offer). An owner must also provide qualified entities a right of first offer – which includes 45-day time period within which the Qualified entity must express interest, within an additional 90 days to submit an offer. If the owner later receives a third-party offer, qualified entities have a final 15-day right of first refusal to purchase the building for sale.

Takeaway for Owners:

Most multifamily buildings are not automatically covered by COPA. Specifically, COPA applies only if a property meets specific enforcement, violation, arrears, or affordability expiration triggers. For buildings that are covered, the law creates major delays, mandatory notice requirements, and significant penalties for noncompliance.

Contact KMWB

KMWB is closely monitoring the progress of COPA and its potential implications for property owners, developers, and lenders. Our team regularly advises clients on regulatory developments affecting New York real estate and can assist you in evaluating how COPA may impact your current or future transactions.

If you have questions about the proposed legislation or would like to discuss a specific property or sale, please contact your KMWB attorney or reach out to us here.

Media Contacts:

Briana Spariosu
Kucker Marino Winiarsky & Bittens, LLP
(212) 869-5030
bspariosu@kuckermarino.com