NYC Council Introduces Revised COPA Legislation (Int. 905-2026): Key Implications for NYC Property Owners

The New York City Council has reintroduced the Community Opportunity to Purchase Act (“COPA”) through Intro. 905-2026, reviving a controversial proposal that could significantly impact the sale of multifamily properties throughout New York City. If enacted, the bill would require owners of certain residential buildings to offer qualified nonprofit or mission-driven organizations the right to purchase their property before it can be sold on the open market.

The legislation follows a prior version, Int. 902-2025, that was vetoed by former Mayor Eric Adams, after generating substantial industry opposition. While the new bill retains a more narrowed framework compared with the 2025 version, it still preserves many of the same procedural obligations and transaction restrictions found in last years bill.

Narrowed Scope Under Int. 905-2026

Earlier COPA proposals would have applied broadly to most residential buildings with three or more units; regardless of violation history, affordability status, or condition. That breadth prompted serious concern from the real estate industry about transaction delays, financing uncertainty, and expanded litigation exposure.

Unlike the original proposal, Int. 905-2026 substantially narrows the universe of properties potentially subject to COPA. Under the current proposal, a property would be covered only if both of the following conditions are satisfied:

1. The Property is a Covered Class A Residential Building with Four (4) or More Units

The following properties are generally excluded:

  • one- to three-family properties;
  • certain owner-occupied five-unit buildings; and
  • commercial-only properties.

2. The Property Meets at Least One Statutory Trigger Condition

Under Int. 905-2026, COPA may apply where a covered property:

  • appears on certain HPD enforcement lists or programs;
  • is subject to in-rem foreclosure proceedings;
  • is subject to Court issued orders to correct;
  • contains qualifying hazardous violations or municipal arrears; or
  • has affordability restrictions that recently expired or are scheduled to expire.

Notably, the legislation may also apply where a building has an average of three (3) or more HPD violations per dwelling unit: a threshold that could capture properties with recurring maintenance or compliance issues, even where owners may not otherwise view the building as “distressed.”

As drafted, the legislation appears primarily aimed at properties city officials consider to be “distressed”, heavily regulated, or at “risk of affordability loss.

Transactional Requirements and Timeline

For covered properties, the proposed legislation would impose several procedural obligations before a sale may proceed.  These obligations include:

  • advance notice to HPD prior to marketing or selling the property;
  • notice distribution by HPD to qualified entities;
  • a right-of-first-offer process; and
  • a potential right of first refusal if a third-party offer is later received.

Under the current bill draft, qualified entities would generally have twenty (20) days to express interest in a covered property and seventy (70) days to submit an offer to purchase such property: delaying transactions by at least 90 days.

Penalties and Enforcement

Owners who transfer covered properties without complying with COPA’s procedural requirements may face civil penalties of up to fifteen percent (15%) of the covered property’s transaction value. The legislation also authorizes qualified entities to seek injunctive relief, which could delay or prevent a closing.

Accordingly, COPA may not only affect transaction timing but also marketability, purchaser interest, pricing expectations, and financing considerations for affected properties.

Legislative Outlook

The political outlook for COPA remains uncertain. Although Int. 905-2026 reportedly has substantial sponsorship support within the Council, Speaker Julie Menin — who previously declined to advance a vote to override the-Mayor Adams’ veto of prior COPA legislation — retains significant influence over committee scheduling, hearings, and whether legislation is ultimately brought to the floor for a vote. If enacted, Int. 905-2026 would generally take effect one (1) year following enactment.

What Owners, Investors, and Lenders Should Do Now

  • Evaluate your portfolio. Identify properties that may fall within COPA’s scope; particularly those with open HPD violations, outstanding arrears, or expiring regulatory agreements.
  • Address violations proactively. Violation accumulation is itself a potential trigger. Remediation efforts now reduce future exposure.
  • Build COPA into deal planning. Factor the potential for 90+ day procedural delays into transaction timelines, financing assumptions, and contract terms.

KMWB is monitoring Int. 905-2026 and will continue to update clients as the legislation advances. If you have questions about a specific property or transaction, please contact your KMWB attorney or reach out to us at 212.869.5030.

Media Contacts:

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