TENANT OPPORTUNITY TO PURCHASE

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3762

Introduced 2/5/2026, by Sen. Mike Simmons

SYNOPSIS AS INTRODUCED:

New Act

Creates the Tenant Opportunity to Purchase Act. Establishes a
statutory right of first refusal for tenants and tenant associations if an
owner seeks to sell a residential rental property in Illinois. Applies to
all rental property with 11 exceptions. Allows tenants or a tenant
association to purchase the property on the same terms as a third-party
offer. Requires owners to provide advance notice of intent to sell no less
than 60 days before listing for buildings with 5 or more units and no less
than 30 days for buildings with 4 or fewer units. Requires that the notice
must include property details, asking price, and a summary of tenant
rights. Provides that after receiving a notice of sale, tenants of 5 or
more units have 90 days to form a tenant association, for 3-4 units have 30
days; and for 1-2 units, at least one tenant has 15 days to declare intent
to exercise the right of first refusal. Provides that tenants must match
the third-party offer and provide the owner with a letter of intent of
financing or preapproval within 120 calendar days from the date of the
notice for 5 or more dwelling units and 60 days for 4 or fewer units.
Prohibits the owner from requiring a tenant to pay a deposit of more than
5% of the contract sale price. Provides a civil cause of action and
remedies for a violation of the Act. Authorizes the Illinois Housing
Development Authority to adopt rules. Makes other changes.
LRB104 18761 JRC 32204 b

A BILL FOR

SB3762
LRB104 18761 JRC 32204 b
1

AN ACT concerning civil law.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 1.
Short title.
This Act may be cited as the
Tenant
5
Opportunity to Purchase Act.

6

Section 5.
Definitions.
As used in this Act:
7

"Affordable housing restrictive covenant" means an
8
agreement between the purchaser and the State in which the
9
purchaser agrees to affordability restrictions memorialized in
10
an affordability covenant in a form approved by the Illinois
11
Housing Development Authority and enforceable by the State as
12
a third-party beneficiary. The affordability restrictions in
13
each affordable housing restrictive covenant extend for a
14
period of not less than 30 years from the sale, subject to
15
exceptions as the Illinois Housing Development Authority may
16
provide for by rule.
17

"Affordability restrictions" means limits on rents and
18
income for persons or families seeking to qualify as tenants
19
in the rental property.
20

"Affordable housing" means that the value of rents paid by
21
tenants are restricted based on the Illinois Housing
22
Development Authority's formula for affordability for a 60%
23
area median income limit, and that the gross household income

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1
of new tenants in the rental property may not exceed 80% of the
2
area median income.
3

"Good faith negotiations" means:
4

(1) whether the party or any of its agents knowingly
5

made any misrepresentations of material fact to the other
6

party or of its agents during the negotiation period;
7

(2) whether the party or any of its agents failed to
8

provide in a timely fashion any information legitimately
9

requested by the other party or any of its agents during
10

the negotiation period;
11

(3) whether the party or any of its agents failed to
12

allow in a timely fashion any legitimate inspection of the
13

property requested by the other party or any of its agents
14

during the negotiation period;
15

(4) whether the party or any of its agents engaged in
16

any other conduct that would constitute a lack of good
17

faith under the standard imposed by the Uniform Commercial
18

Code; and
19

(5) whether the party or any of its agents engaged in
20

any other conduct that displays a price adjustment that
21

would substantially interfere with the tenants or tenant
22

association rights under this Act.
23

"Just cause eviction" means any eviction for serious or
24
repeated violations of the terms and conditions of a lease or
25
occupancy agreement, for a violation of applicable federal,
26
State, or local laws or for other good cause.

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1

"Material change" means any change in contract terms that
2
result in a new purchaser and a change in the sales asking
3
price of 10% or more than 10% from the original contract
4
listing price.
5

"Owner" means the person, firm, partnership, corporation,
6
trust, organization, limited liability company or other
7
entity, or its successors or assigns that holds title to a
8
rental property.
9

"Purchaser" means a party who has entered into a purchase
10
contract with an owner and who will, upon performance of the
11
purchase contract, become the new owner of the rental
12
property.
13

"Rental property" means any occupied residential rental
14
building or a group of residential rental buildings operated
15
as one entity.
16

"Rental unit" or "unit" means a room or suite of rooms
17
designed, occupied or intended for occupancy as a separate
18
living quarter with cooking, sleeping, and sanitary facilities
19
provided within the unit for the exclusive use of the
20
occupants of the unit.
21

"Sale" or "sell" means an act by which an owner conveys,
22
transfers, or disposes of rental property by deed or
23
otherwise, whether through a single transaction or a series of
24
transactions, including: (i) transfer of title to rental
25
property; (ii) transfer of a majority interest in owner; or
26
(iii) lease of rental property for more than 7 years.

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"Tenant" means a natural person entitled by written or
2
oral agreement or by sufferance to occupy a rental unit to the
3
exclusion of others, and who is residing in a rental unit at
4
the time of a notification under Section 20. If more than one
5
tenant is listed on a lease, any of the tenants may exercise
6
the rights granted under this Act.
7

"Tenant association" means an association of tenants,
8
whether incorporated or not, for which written consent to
9
forming a tenant association has been given by tenants
10
representing at least 75% of the occupied units in a rental
11
property with 5 or more units; or at least 50% of the occupied
12
units in a rental property with 4 or fewer units. The tenants
13
agreeing to participate in the tenant association must signify
14
their consent to form a tenant association by signing a form
15
provided by the Illinois Housing Development Authority. The
16
percentage must be calculated based on the number of occupied
17
rental units in a rental property rather than the number of
18
individuals listed on leases as tenants.
19

"Third-party purchase agreement" means an arm's length
20
third-party agreement in which an owner agrees to sell a
21
rental property, including, without limitation, a purchase and
22
sale agreement, contract of sale, purchase option, or other
23
similar instrument.
24

"Title" means a legal or equitable ownership interest in a
25
rental property; or a legal, equitable, or beneficial interest
26
in a partnership, limited partnership, corporation, trust, or

SB3762
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1
other entity that has a legal or equitable ownership interest
2
in a rental property.

3

Section 10.
Right of first refusal conferred.
This Act
4
shall be construed to confer a right of first refusal to
5
purchase any rental property for sale under the terms set
6
forth herein on each tenant association or tenant.

7

Section 15.
Exceptions.
The requirements of this Act do
8
not apply to the transfers identified below but apply to any
9
subsequent transfer to a nonexempt party:
10

(1) a transfer of legal title or an interest in an
11

entity holding legal title to a rental property under a
12

deed of trust or mortgage, and thereafter any transfer by
13

foreclosure sale or deed in lieu of foreclosure under a
14

deed of trust or mortgage to an entity not affiliated with
15

the owner;
16

(2) a transfer made in connection with any bankruptcy
17

proceeding including, but not limited to, any transfer
18

made by a bankruptcy trustee;
19

(3) a tax sale or transfer by a tax foreclosure;
20

(4) a transfer by devise or intestacy, or any other
21

transfer made in connection with a bona fide effort to
22

pass an interest in real property to one's devisees or
23

heirs including, but not limited to, transfers made in
24

connection with a living trust;

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LRB104 18761 JRC 32204 b
1

(5) a transfer between or among spouses, domestic
2

partners, siblings including, but not limited to,
3

half-siblings, step-siblings, and adoptive siblings;
4

parents including, but not limited to, step-parents and
5

adoptive parents or guardians and their children;
6

grandparents, and their grandchildren; aunts or uncles and
7

their nieces or nephews, great-aunts or great-uncles and
8

their grand-nieces or grand-nephews; or first cousins; or
9

any combination thereof;
10

(6) a transfer of bare legal title into a revocable
11

trust, without actual consideration for the transfer, in
12

which the transferor is the current beneficiary of the
13

trust;
14

(7) a transfer to a named beneficiary of a revocable
15

trust by reason of the death of the grantor of the
16

revocable trust;
17

(8) a transfer by the trustee of a revocable trust if
18

the transfer would otherwise be excluded under this Act if
19

made by the grantor of the revocable trust;
20

(9) a transfer under court order or court-approved
21

settlement;
22

(10) a transfer by eminent domain or negotiated
23

purchase under threat of eminent domain; or
24

(11) a transfer directly caused by a change in the
25

form of the entity owning the rental property.

SB3762
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1

Section 20.
Notice of intent to sell.
2

(a) Notice before listing required. The owner must provide
3
notice to the Illinois Housing Development Authority and to
4
the tenant association, or if no tenant association exists, to
5
each tenant, of the owner's intent to sell no less than 60 days
6
before listing or otherwise offering a rental property for
7
sale for a multi-unit residential building with 5 or more
8
dwelling units; or no less than 30 days before listing or
9
otherwise offering a rental property for sale for a multi-unit
10
residential building with 4 or fewer dwelling units. The
11
notice must be delivered in person or mailed, by certified or
12
registered mail, return receipt requested, on a form provided
13
by the Illinois Housing Development Authority, and contain the
14
following information:
15

(1) the name, address, and telephone number of each
16

owner of the rental property;
17

(2) the address of the rental property;
18

(3) a description of the rental property, including
19

the number of units and the number of bedrooms within each
20

unit;
21

(4) the proposed asking price for the rental property;
22

(5) a statement that the owner intends to sell the
23

rental property; and
24

(6) a summary of tenant rights under this Act. The
25

owner shall also post a notice of intent to sell in a form
26

provided by the Illinois Housing Development Authority at

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1

all public entrances to the rental property.
2

The owner must keep all return receipts required by this
3
subsection for a period of 3 years after the sale of the rental
4
property and make the receipts available for inspection by the
5
Illinois Housing Development Authority at all times during the
6
owner's business hours.
7

(b) Additional disclosures. The tenant association, or if
8
no tenant association exists, any tenant in the rental
9
property, or the Illinois Housing Development Authority, may
10
in writing, at any time after receipt of the owner's notice of
11
intent to sell, request the following additional information:
12

(1) the most recent rent roll, including each unit
13

number and the monthly rent charged for each unit;
14

(2) a list of vacant apartments and a statement of the
15

rental property's vacancy rate during the preceding 12
16

months;
17

(3) the income and expense report for the 12-month
18

period before the notice, including capital improvements,
19

real property taxes and other municipal charges; and
20

(4) any other information the Illinois Housing
21

Development Authority may specify by rule.
22

The owner has 30 calendar days from receipt of the request
23
to provide the information.

24

Section 25.
Right of first refusal.
25

(a) Notice of offer. If the owner receives and accepts a

SB3762
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LRB104 18761 JRC 32204 b
1
bona fide offer from a third party to purchase the rental
2
property, then the owner must promptly provide written notice
3
of the offer ("Notice of Sale") to the Illinois Housing
4
Development Authority and to the tenant association, or if no
5
tenant association exists, to each tenant in the rental
6
property. Any third-party purchase agreement is contingent
7
upon the right of first refusal set forth in this Act. The
8
Notice of Sale must include an executed duplicate original of
9
the third-party purchase agreement and the disclosures set
10
forth in subsection (b) of Section 20, unless the owner has
11
previously made the disclosures and the disclosures remain
12
accurate and complete.
13

(b) Time for tenants to form organization. To exercise its
14
right of first refusal to purchase a rental property:
15

(1) the tenants of a rental property consisting of 5
16

or more dwelling units have 90 calendar days from receipt
17

of the Notice of Sale to:
18

(A) form a tenant association;
19

(B) inform the owner and the Illinois Housing
20

Development Authority of its existence; and
21

(C) provide to the owner and the Illinois Housing
22

Development Authority the names, addresses, and
23

telephone numbers of at least 2 of the officers or
24

representatives of the association;
25

(2) the tenants of a rental property consisting of 3
26

or 4 dwelling units have 30 calendar days from receipt of

SB3762
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LRB104 18761 JRC 32204 b
1

the Notice of Sale to form a tenant association and inform
2

the owner and the Illinois Housing Development Authority
3

of its existence; and
4

(3) at least one tenant of a rental property
5

consisting of one or 2 dwelling units has 15 calendar days
6

to inform the owner of its intent to exercise its right of
7

first refusal.
8

(c) Negotiation. Any negotiations between the owner, or
9
the owner's agents, and a tenant association or, in the case of
10
a rental property consisting of one or 2 dwelling units, one or
11
both tenants, or an agent, require a continuing duty of good
12
faith negotiations on the part of all parties involved in the
13
negotiation and transaction.
14

(d) Exercise right of first refusal.
15

(1) A tenant association or, in the case of a rental
16

property consisting of one or 2 dwelling units, at least
17

one tenant, exercise its right of first refusal by
18

delivering written notice to the owner before the
19

expiration of the period required in subsection (b) that
20

the tenant association or tenant, as applicable, elects to
21

purchase the rental property under this Act.
22

(2) Notice to the owner that the right of first
23

refusal is being exercised must be accompanied by any
24

earnest money required under the terms of the third-party
25

purchase agreement, subject to the cap set forth in
26

Section 30.

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1

(3) The contract formed by exercise of the right of
2

first refusal is on the same terms and conditions as those
3

set forth in the third-party purchase agreement as
4

modified by the terms of this Act.
5

(4) Notwithstanding this general requirement or any
6

term of the third-party purchase agreement, any such
7

acceptance is presumed to be contingent upon the tenant
8

association's, or tenant's, ability to conduct due
9

diligence and secure financing before the deadline in
10

subsection (e) for completing the sale.
11

(5) Nothing in this Section may be construed to
12

require any owner to extend any form of owner financing to
13

tenants or a tenant association.
14

(6) If tenants fail to meet the requirements by the
15

timelines set by this Act, then the ability to exercise
16

the right of first refusal terminates.
17

(e) Time for closing.
18

(1) If a tenant association, or tenant under paragraph
19

(3) of subsection (b), exercises its right of first
20

refusal in accordance with subsection (d), then the tenant
21

association or tenant must conduct due diligence and
22

secure financing within:
23

(A) 120 calendar days from the date of the notice
24

in rental properties consisting of 5 or more dwelling
25

units; or
26

(B) 60 calendar days in rental properties

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1

consisting of 4 or fewer dwelling units unless the
2

owner and the tenant association, or tenant, have
3

expressly agreed otherwise in writing.
4

(2) The owner must give the tenant association or
5

tenant any information about the rental property that the
6

tenant association or tenant reasonably requests, such as
7

architectural and engineering plans and specifications, if
8

available, and access to the rental property to inspect it
9

and conduct reasonable tests at reasonable times after
10

reasonable notice.
11

(3) At the end of this 120-day period, 60-day period,
12

or any other period that has been agreed upon in writing,
13

as applicable, the owner must sell the rental property to
14

the tenant association or tenant on those terms. If the
15

applicable closing period ends on a Saturday, Sunday, or
16

other legal holiday in the State, then the closing occur
17

on the first business day thereafter. If the rental
18

property is conveyed to the tenant association or tenant
19

under the right of first refusal, any prepaid rent is
20

apportioned as of the closing date and applied on account
21

of the purchase price.
22

(f) Tenant association's rejection of offer. If the tenant
23
association or tenant fails to exercise its right of first
24
refusal on or before the deadline set forth in subsection
25
(d)(1), terminates the contract under its terms, or defaults
26
unless there is a mutual default, then the right is deemed

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1
waived and the owner may sell the rental property to the
2
third-party purchaser identified in the third-party purchase
3
agreement on the terms specified therein. If the sale to the
4
third-party purchaser fails for any reason to close, or if
5
there is any material change in the terms of sale from those
6
set forth in the third-party purchase agreement, then the
7
tenant association's, or tenant's, right of first refusal
8
under this Act is reinstated. Any sale of the rental property
9
by the owner to a different party or on any materially
10
different terms is null and void.
11

(g) Third-party rights. The right of a third-party to
12
purchase a rental property is subject to the right of first
13
refusal conferred by this Act. Upon exercise of the right of
14
first refusal, the third-party purchase agreement between the
15
owner and the third-party purchaser automatically terminates,
16
and the owner or the tenant association or tenant or the rental
17
building is not bound or in any way affected by the agreement,
18
and the third-party purchaser does not have any interest in
19
the contract between the owner and the tenant association or
20
tenant formed by exercise of the right of first refusal.
21
Without limiting the generality of the foregoing, the owner
22
and the tenant association or tenant may freely modify the
23
terms and conditions on which the sale from the owner to the
24
tenant association or tenant may be made. The time periods for
25
exercising the right of first refusal under subsection (d)(1)
26
and for closing under subsection (e) are minimum periods, and

SB3762
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LRB104 18761 JRC 32204 b
1
the owner may grant the tenants a reasonable extension of a
2
period without liability under a third-party agreement.
3
Third-party purchasers are presumed to act with full knowledge
4
of tenant rights and public policy under this Act.
5

(h) Continuing right. The right of first refusal is a
6
continuing right and applies to each owner of a rental
7
property. The right of first refusal applies to all owners of a
8
rental property including, but not limited to, any owner that
9
acquired its interest in a sale to which the right of first
10
refusal applied but was not exercised. The extended timelines
11
granted in this Act for tenants to exercise the right of first
12
refusal may only be exercised once after an owner places the
13
rental property for sale or if there is a material change to
14
the purchase price.

15

Section 30.
Financial assurances; deposit.
To exercise its
16
right of first refusal in a rental property consisting of 5 or
17
more dwelling units, the tenant association or assignee under
18
Section 35 must provide the owner with a letter of interest or
19
letter of intent from a community organization, lender, or
20
community development financial institution indicating that
21
the purchaser is in the process of obtaining preapproval for
22
financing the purchase; and in a rental property consisting of
23
4 units or fewer, the tenant association, tenant under
24
paragraph (3) of subsection (b) of Section 25, or assignee
25
under Section 35 must provide the owner with a preapproval

SB3762
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1
letter from a lender. The owner may not require the tenant
2
association or tenant under Section 25(b)(3) to pay a deposit
3
of more than 5% of the contract sales price to make a contract.
4
The owner must refund the deposit for a good faith failure of
5
the tenant association or tenant to perform under the
6
contract.

7

Section 35.
Exercise or assignment of rights.
A tenant
8
association or tenant under Section 25(b)(3) may exercise the
9
rights established under this Act in conjunction with a third
10
party or by assigning those rights to any party whether
11
private or governmental. Such an exercise or assignment may
12
occur at any time in the process provided in this Act and may
13
be structured in any way the tenant association or tenant
14
under paragraph (3) of subsection (b) of Section 25, in its
15
sole discretion, finds acceptable. The tenant association or
16
tenant under Section 25(b)(3) must give the owner written
17
notice of such third party or assignee within 10 business days
18
of entering into a written agreement. Any rights conferred
19
upon tenant associations or tenants under paragraph (3) of
20
subsection (b) of Section 25, under this Act extend to any
21
third parties or assignees, and, upon receipt of notice of
22
such third parties or assignees under this Section, owners
23
must treat the third parties or assignees in the same manner as
24
tenant associations or tenant under Section 25(b)(3) under
25
this Act.

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1

Section 40.
Waiver of rights.
2

(a) An owner may not request a waiver of the right of first
3
refusal conferred by this Act or require waiver of any other
4
right under this Act.
5

(b) An owner may not ask a tenant if the tenant intends to
6
waive the right of first refusal during the period governed by
7
Section 20. After the end of that period, an owner may ask a
8
tenant, but may not require an answer, if the tenant intends to
9
waive the right of first refusal.
10

(c) In a rental property consisting of 5 or more dwelling
11
units, if 50% of the tenants waive their right of first
12
refusal, then the right of first refusal is waived and the
13
owner does not need to wait for the period required by Section
14
25.

15

Section 45.
Notice.
Any notice required by this Act is
16
deemed to have been provided when delivered in person or
17
mailed by certified or registered mail, return receipt
18
requested, to the party to whom notice is required.

19

Section 50.
Preservation as rent-restricted affordable
20
housing.
If a purchaser purchases a rental property and uses
21
any public funds in the purchase, then the rental property
22
must be maintained as affordable housing for no less than 30
23
years. The Illinois Housing Development Authority must

SB3762
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LRB104 18761 JRC 32204 b
1
establish procedures to ensure that each rental property
2
acquired under this Act is subject to an affordable housing
3
restrictive covenant that sets forth the manner in which the
4
rental property is preserved as rent-restricted affordable
5
housing.

6

Section 55.
Duties of owner relative to existing
7
tenancies.
No owner may disturb any tenancy, other than for a
8
just cause eviction, during the time periods set forth in this
9
Act.

10

Section 60.
Sale of property to third-party purchaser.
If
11
a tenant association or tenant under paragraph (3) of
12
subsection (b) of Section 25, waives its right of first
13
refusal, and the owner sells the rental property to a bona fide
14
third-party purchaser, the purchaser must allow the current
15
tenants to remain in their respective dwelling units for the
16
longer of 6 months from the effective date of the sale or until
17
each tenant's lease expires, at the same terms and conditions
18
as before such sale. The purchaser may, with the agreement of
19
the tenants, relocate the tenants to comparable units with
20
comparable rents in accordance with procedures to be
21
established by the rules of the Illinois Housing Development
22
Authority.

23

Section 65.
Rules.
The Illinois Housing Development

SB3762
- 18 -
LRB104 18761 JRC 32204 b
1
Authority has the authority to adopt rules necessary to
2
implement the requirements of this Act.

3

Section 70.
Penalties.
Any person who violates this Act
4
must be fined not less than $200.00 nor more than $1,000.00 for
5
each offense. Each day that a violation continues constitutes
6
a separate and distinct offense to which a separate fine
7
applies.

8

Section 75.
Private right of action.
Any aggrieved person,
9
including, but not limited to, any tenant or tenant
10
association, may enforce the provisions of this Act by a civil
11
action in which the court may provide injunctive relief; award
12
treble damages, the plaintiff's court costs, and reasonable
13
attorney's fees.

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