Frequently Asked Questions
Q. What rights do we have once our building’s owner places the property up for sale?
A. The Tenant Opportunity to Purchase Act (“TOPA”) gives you the right to purchase your building at the same price and terms as found in a contract between the owner and third party buyer. TOPA also gives Tenant Associations the right to assign rights to a third party partner. If you form a Tenant Association and inform the seller (building owner), you lock in your rights to negotiate for such things as affordable rents and renovations to the building.
Q. What are our options?
A. The tenants association votes on whether to buy the building outright (usually with the help of a consultant like BP), convert to condominium, or allow a third party to purchase in exchange for certain promises such as renovation of the building. By law, Elderly and Physically Disabled tenants are protected and can continue renting, regardless of the decision by the Tenant Association.
Q. What is the benefit of keeping our building rental?
A. By assigning your rights to purchase the building to a third party, the third party is contractually obligated to give you certain things such as renovating the building and/or establish affordable rents.
Q. What is the benefit of a condominium conversion?
A. Condo conversions change the use of the building from apartments to home ownership. Because TOPA gives the Tenant Association the power to negotiate, tenants might have the right to purchase their renovated units at lower than market “insider prices” potentially creating instant equity. However, sometimes the economics just aren’t there for a successful condominium or a developer partner cannot be found to support a conversion to a for sale property. Other hurdles may include lender requirements that not less than 50% of the condominiums must be pre-sold to commence construction. If the tenants do not wish to continue to rent and a condominium conversion is not feasible, the tenants might take a cash buy out of their lease.
Q. Some tenants wish to continue to rent and others would like to buy their units. Can our building be both a rental and condominium?
A. By law, elderly and disabled residents have the right to continue renting. But it is difficult to partially convert a single building. This is why the tenant association has to vote for one of several options.