Affordable Housing Right Of First Refusal
The bill creates a right of first refusal of a local government to match an acceptable offer for the sale of a residential or mixed-use multifamily property (property). The right to the purchase of the property by the local government is subject to the local government's commitment to using the property as long-term affordable housing. The local government may assign its right of first refusal to the state, to any political subdivisions,
or to any housing authority in the state , or to the Colorado housing and finance authority subject to the limitation that the assignee make the same commitment to using the property as long-term affordable housing.
The bill requires notices to be given by the seller to local governments and by local governments to the seller and to residents of the property. Upon receiving notice of intent to sell or of a potential sale of property, a local government has 14
business calendar days to preserve its right of first refusal and an additional 90 business 60 calendar days to make an offer and must agree to close on the property within 180 business 120 calendar days of the execution of an agreement for the sale and purchase of the qualifying property. Prior to the sale of the property, the seller is required to execute and record an affidavit in the real property records of the county in which the property is located certifying that the seller has complied with the right of first refusal requirements.
The bill allows certain sales of property to be exempt from the right of first refusal and the requirements established by the bill for the right of first refusal. The bill also allows the local government to waive its right of first refusal to purchase a property if the local government elects to disclaim its rights to any proposed transaction or for any duration of time or if there is a third-party buyer interested in purchasing the property with the same commitment to preserving or converting the property for long-term affordable housing and if the third-party buyer enters into an agreement with the local government concerning the third-party buyer's commitment to long-term affordable housing.
If the local government, its assignee, or a third-party buyer who has committed to preserving or converting the property for long-term affordable housing has acquired the property and maintained the property for long-term affordable housing for 50 years, the property may be converted to another use if the following conditions are met:
- Notice is given to residents prior to the conversion;
- Any displaced residents are provided with compensation for relocation; and
- The local government, its assignee, or a third-party buyer who has committed to preserving or converting the property for long-term affordable housing guarantees the development or conversion of an equal or greater amount of units within the boundaries of the local government for long-term affordable housing and offers the units first to any residents displaced by the conversion of the property.
The bill also provides that the attorney general's office has responsibility to enforce the provisions of the bill and that the attorney general's office, a local government, or a mission-driven organization has standing to bring a civil action for violations of the bill. If a court finds that a seller or a third-party buyer that has entered into an agreement with a local government for the waiver of the local government's right of first refusal has materially violated the law with respect to the provisions of the right of first refusal, the court must award a statutory penalty of not less than $50,000 or an amount equal to 30% of the purchase or listing price of the property, whichever amount is greater.
(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)