Requires multiple dwelling building owners to provide notice to tenants and tenant associations of certain sales and provides tenant association with opportunity to purchase multiple dwelling.

S4244

SENATE, No. 4244

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MAY 14, 2026

Sponsored by:

Senator� BENJIE E. WIMBERLY

District 35 (Bergen and Passaic)

Senator� ANGELA V. MCKNIGHT

District 31 (Hudson)

SYNOPSIS

���� Requires multiple dwelling building owners to provide
notice to tenants and tenant associations of certain sales and provides tenant
association with opportunity to purchase multiple dwelling.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

providing tenants of multiple dwellings an
opportunity to purchase prior to certain sales and supplementing Title 55 of
the Revised Statutes.�

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� As used in P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill):

���� �Affiliate� means an entity
owned or controlled by an owner or under common control with the owner.

���� �Borrower� means a mortgagor
of a mortgage loan.

���� �Commissioner� means the
Commissioner of Community Affairs.

���� �Deed in lieu� means a deed
for the collateral property, that the mortgagee accepts from the borrower in
exchange for the release of the borrower�s obligation under the mortgage
loan.

���� �Department� means the
Department of Community Affairs.

���� �Designee� means a nonprofit
organization, a municipal or county housing authority, or a controlled
nonprofit or for-profit affiliate of either entity; provided that the parent
organization has requisite experience in developing, owning, or operating residential
real estate and with the financial capacity to secure the financing of the
purchase transaction; provided that any purchase by a designee under P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill) shall be for
the purpose of the use of the property as an inclusionary development.�

���� �Earnest money deposit� means
a money deposit provided from the purchaser to the seller as part of the
purchase contract in order to demonstrate actual intent to purchase the
property.

���� "Elderly tenant
household� means a tenant household in which one or more of the residents are
age 65 or older.

���� �Multiple dwelling� means a
building or structure meeting the definition of �multiple dwelling� set forth
in the �Hotel and Multiple Dwelling Law,� P.L.1967, c.76 (C.55:13A-1 et seq.).

���� �Immediate family member�
means the parent, offspring, sibling, or spouse of the owner.

���� �Inclusionary development�
means a residential housing development in which, unless otherwise approved by
the commissioner based on project feasibility, no less than 25 percent of the
housing units are committed to be affordable housing for households with income
of less than 80 percent of the area median income for households of the same
size and composition.

���� �Minimum tenant participation
percentage� means 51 percent of the tenant-occupied housing units of the
multiple dwelling.� The minimum tenant participation percentage shall be
calculated, rounded up, based on the number of tenant-occupied housing units in
a property, rather than the number of individual tenants.� If there is more
than one tenant residing in a unit, any of the tenants in the unit may
participate as members of the tenant association for the unit to be counted
towards the participating percentage of units.� The minimum tenant
participation percentage shall be presumed to have been achieved for a period
of one year after it is initially established.

���� �Mortgage loan� means a loan
secured wholly or partially by a mortgage on a multiple dwelling.

���� �Mortgagee� means an entity to
whom property is mortgaged, the mortgage creditor or lender including, but not
limited to, mortgage servicers, lenders in a mortgage agreement and any agent,
servant or employee of the mortgagee or any successor in interest or assignee
of the mortgagee's rights, interests or obligations under the mortgage
agreement.

���� �Owner� means a person, firm,
partnership, corporation, trust, organization, limited liability company, or
other entity, or its successors or assigns, that holds title to real property.

���� �Purchaser� means a party who
has entered into a purchase contract with an owner and who will, upon
performance of the purchase contract, become the new owner of the property.

���� �Purchase contract� means a
binding written agreement whereby an owner agrees to sell property including,
without limitation, a purchase and sale agreement, contract of sale, purchase
option or other similar instrument.

���� �Sale� means an act by which
an owner conveys, transfers, or disposes of property by deed or otherwise,
whether through a single transaction or a series of transactions, within a
three-year period; provided, that a disposition of housing by an owner to an
affiliate of the owner shall not constitute a sale.�

���� �Short-sale� means a sale
approved by the mortgagee to a bona fide purchaser at a price that is less than
the borrower's existing debt on the multiple dwelling.

���� �State agency� means any
office, department, board, commission, bureau, division, agency, or
instrumentality of the State.

���� �Successor� means the entity
through which a tenant association may take title to the residential property,
including any of the following: (1) a nonprofit or for-profit entity controlled
by the tenant association; (2) a cooperative, as defined in section 3 of �The
Cooperative Recording Act of New Jersey,� P.L.1987, c.381 (C.46:8D-3), in
either case controlled by the tenants of the property; or (3) a joint venture
between any of such entities and another party with: (a) the requisite
experience in acquiring, developing and owning residential property, and (b)
the financial capacity to secure financing of the purchase transaction; any
such joint venture shall be for the purpose of the use of the property as an
inclusionary development.

���� �Tenant� means a person
entitled to possession or occupancy of a rental unit within residential
housing, including a subtenant, lessee and sublessee.

���� �Tenant association� means an
organization, with a membership limited to present tenants of a property that
is an incorporated nonprofit organization.� �Tenant association� means the
tenant association itself, or a successor entity or a designee selected
pursuant to subsection b. of section 2 of P.L.��� , c.��� (C.������ ) (pending
before the Legislature as this bill).�

���� �Third-party offer� means an
offer to purchase the mortgaged property for valuable consideration by an arm's
length purchaser; provided, that a third-party offer shall not include an offer
by the borrower or the tenant association.

���� �Third-party purchaser� means
a purchaser that is not the tenant association of the property.

���� 2.��� a.� An owner of a
multiple dwelling shall:

���� (1)�� notify the department,
the tenant association of the property, as applicable, and each residential
tenant household of the property, in writing by hand delivery or by mail, of
the owner's intention to sell the property, an action that shall be deemed to include
the consideration of an unsolicited offer from a third-party to purchase the
property; and

���� (2) provide a tenant
association with the minimum tenant participation percentage, an opportunity to
purchase the property prior to entering into an agreement to sell the property
pursuant to the time periods established pursuant to P.L.��� , c.��� (C.�������
) (pending before the Legislature as this bill), although an owner shall not be
under an obligation to enter into an agreement to sell the property to a tenant
association.

���� b.� A tenant association with
the minimum tenant participation percentage may select a successor entity or a
designee to act on its behalf as purchaser of the multiple dwelling and shall
provide the owner and the department with notice of its selection.

���� c.� A tenant association with
the minimum tenant participation percentage may, within 30 days following
receipt of the owner's intention to sell, demonstrated though the submission of
a copy of a third-party contract pursuant to subsection d. of this section,
submit an offer to the owner to purchase the property. Failure to submit
a timely offer shall constitute an irrevocable waiver of the tenants' rights
under this subsection and the owner may enter into a contract to sell the
property to a third-party, subject to subsections d. through f. of this
section.� If the owner and the tenant association have not entered into an
agreement within 30 days after receipt of the notice of the owner's
intent to sell, the owner may enter into an agreement to sell the property to a
third-party, subject to subsections d. through g. of this section.

���� d.��� Upon execution of any
purchase contract with a third party, the owner shall, within seven days,
submit a copy of the executed contract and proof that the deposit toward the
purchase has been paid by the third party along with an alternative proposed
purchase contract to the tenant association, providing the tenant association
with an opportunity to execute the contract.� If the tenant association elects
to purchase the property, the tenant association shall within 30 days after the
receipt of the third-party purchase contract and the proposed purchase
contract, execute the proposed purchase contract or other agreement as is
acceptable to both parties.� A tenant association that exists at this time
shall be authorized to exercise this authority.� The time periods set forth in
this section may be extended by agreement between the owner and the tenant
association.� Except as otherwise specified in subsection e. of this section,
the terms and conditions of the proposed purchase contract offered to the
tenant association shall be the same as those of the executed third-party
purchase contract.� A tenant association that acts to purchase the property
shall demonstrate good faith intent to purchase, including evidence of
financial capacity or engagement with a lender or qualified designee.

���� e.���� Any purchase contract
offered to, or proposed by, the tenant association shall provide the following
terms at a minimum:

���� (1)�� the earnest money
deposit required by the owner of the tenant association shall not exceed the
lesser of:

���� (a)�� the deposit in the
third-party purchase contract;

���� (b)�� five percent of the sale
price; or

���� (c)�� $250,000; provided,
however, that the owner and the tenant association may agree to modify the
terms of the earnest money deposit; provided, further, that the earnest money
deposit shall be held under commercially-reasonable terms by an escrow agent
selected jointly by the owner and the tenant association;

���� (2)�� the owner shall provide
the following information, documentation, and permissions, within 30 days of
the date of the purchase contract to the tenant association:

���� (a)�� an updated rent roll
with names of all tenants;

���� (b)�� documentation of all
operating expenses for the prior two years, including utilities, insurance
premiums, bills for repairs, and capital improvements;

���� (c)�� permission to inspect
all common and maintenance service areas of the property, including roof,
boiler room, electrical and telecommunications rooms;

���� (d)�� permission to conduct
inspections and tests for the presence of lead paint and asbestos; and

���� (e)�� permission to do tests
for regulated environmental toxins on unbuilt areas of the property, if
required by the lender of the tenant association;

���� (3)�� the contract shall
contain all reasonable contingencies, including financing, marketability of
title, and appraisal contingencies;

���� (4)�� the earnest money
deposit shall be refundable for not less than 90 days from the date of
execution of the purchase contract or a greater period as provided for in the
third-party purchase contract; provided, however, that if the owner
unreasonably delays the buyer's ability to conduct due diligence during the 90
day period, the earnest money deposit shall continue to be refundable for an
additional period of one day for every day beyond 30 days that the owner has
not complied with paragraph (2) of this subsection.� After the expiration of
the specified time period, the earnest money deposit shall become
non-refundable, but shall continue to be a deposit toward the full purchase
price; and

���� (5)� an explanation of the
required timing for payments of real estate broker commissions or fees
associated with a purchase.�

���� f.���� For the purposes of a
sales contract entered pursuant to P.L. , c.���
(C.������� ) (pending before the Legislature as this bill), a tenant
association shall have 120 days from execution of the purchase and sale
agreement to perform all due diligence, secure financing for and close on the
purchase of the building.� Failure to exercise the purchase option within 120
days shall constitute a waiver of the purchase option by the tenant
association.� The 120-day period may be extended by agreement of both parties.

���� g.� If the tenant association
does not exercise its purchase option, the owner may proceed with the sale to
the third-party.� If the closing date in the third-party contract is extended,
for each extension, the owner shall provide the department and the tenant
association an amendment to the purchase contract extending the date of the
closing.� Within seven days of the termination of the third-party purchase
contract, the owner shall notify the department and the tenant association of
the termination.� The notice, if required pursuant to this subsection, shall
re-initiate the provisions of this section.

���� h.� The tenant association
shall ensure that its purchase of the property shall not result in the
displacement of one or more elderly tenant households that choose not to
participate in the purchase of the property.

���� i.� The department shall
develop sample purchase contracts, incorporating the requirements of P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill), and publish
the sample purchase contracts on the department�s Internet website to ensure
that an owner is able to provide the document to a tenant association.

���� j.� A multiple dwelling
containing fewer than 10 residential units shall be subject to an expedited
process, as determined by the commissioner, including reduced notice and
response timeframes.

���� 3.� a.� An owner of a multiple
dwelling shall provide notice to the tenant association, as applicable, and
each tenant household of the intention to sell the multiple dwelling by way of
short-sale to avoid foreclosure.� This notice shall be mailed with a
simultaneous copy to the department within two business days of the owner's
submission of a request or application to the mortgagee for permission to sell
the multiple dwelling by way of short-sale or to accept a deed in lieu.� This
notice shall also include a notice of tenant rights, in accordance with the
sample notice provided by the commissioner pursuant to section 7 of P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill).

���� b.� (1)� A mortgagee of a
multiple dwelling shall not accept a third-party offer or deem the owner's
application for short-sale submitted for review unless:

���� (a)� the mortgagee receives
documentation demonstrating that the tenants of the multiple dwelling have been
informed of the owner's intent to seek a short-sale or deed in lieu and the
tenant association has had the opportunity to express their interest in
exercising a right of first refusal within 60 days;

���� (b)� the tenant association
has had the opportunity to assign its right of first refusal; or

���� (c)� the tenant association
has waived those rights.�

���� (2)� If the tenant association
has not affirmatively expressed an interest in exercising a right of first
refusal or in assigning that right within 60 days, and has not affirmatively
waived that right within 60 days, these rights of the tenant association shall
be deemed waived.

���� c.� Before a multiple dwelling
may be transferred by short-sale or deed in lieu, the owner of the multiple
dwelling shall notify each tenant household, with a simultaneous copy to the
department, by regular mail, of any bona fide offer that the mortgagee intends
to accept.� If households constituting at least 51 percent of the households
occupying the multiple dwelling notify the owner, in writing, that they
collectively desire to receive information relating to the proposed sale, then,
before any short-sale or transfer by deed in lieu, the owner shall provide each
tenant household a notice of the offer.� Tenants may indicate this desire
within the same notice described in subsection b. of this section.� Any notice
of the offer required to be provided pursuant to this section shall include the
price, calculated as a single lump sum amount and any promissory notes offered
in lieu of cash payment.

���� d.� A tenant association
representing at least 51 percent of the households occupying the multiple
dwelling that are entitled to notice under subsection c. of this section shall
have the collective right to purchase, in the case of a third-party offer that
the mortgagee intends to accept, provided that the tenant association:

���� (1)� submits to the owner
reasonable evidence that the tenants of at least 51 percent of the occupied
units in the multiple dwelling have approved the purchase of the multiple
dwelling;

���� (2)� submits to the owner a
proposed purchase and sale agreement on substantially equivalent terms and
conditions within 60 days of receipt of notice of the offer made pursuant to
subsection c. of this section;

���� (3)� obtains a binding
commitment for any necessary financing or guarantees within an additional 90
days after execution of the purchase and sale agreement; and

���� (4) closes on the purchase
within an additional 90 days after the end of the 90-day period described in
paragraph (3) of this subsection.

���� e.� An owner shall not
unreasonably refuse to enter into, or unreasonably delay the execution or
closing on a purchase and sale with the tenant association when the tenant
association has made a bona fide offer to meet the price and substantially
equivalent terms and conditions of an offer for which notice is required to be
given pursuant to subsection c. of this section.� Failure of the tenant
association to submit a purchase and sale agreement within the first 60-day
period, to obtain a binding commitment for financing within the additional
90-day period, or to close on the purchase within the second 90-day period,
shall serve to terminate the rights of the tenant association to purchase.� The
time periods provided pursuant to P.L.��� , c.��� (C.������� ) (pending before
the Legislature as this bill) may be extended by mutual agreement, or, if
expressly authorized by the commissioner, may be waived in circumstances
involving imminent foreclosure, financial distress, or other exigent
circumstances.� The provisions of P.L.��� , c.��� (C.������� ) (pending before
the Legislature as this bill) shall not be construed to require an owner to
provide financing to the tenant association.� A tenant association that has the
right to purchase in association with a short sale, at its election, may, for
the purpose of maintaining the use of the multiple dwelling as an inclusionary
development, assign its purchase right to:

���� (1)�� the municipality in
which the multiple dwelling is located;

���� (2)�� the housing authority of
the municipality or county in which the multiple dwelling is located;

���� (3)�� a State agency; or

���� (4)�� a nonprofit entity, a
community development corporation, a developer of inclusionary developments, or
land trust.

���� f.���� The right of first
refusal established in this section shall commence for the tenant association
for the time periods provided in this section, beginning on the date of notice
to the tenants under subsection a. of this section.� The effective period for the
right of first refusal shall begin anew for each different offer to purchase
that the mortgagee intends to accept.� The right of first refusal shall not
apply with respect to any offer received by the owner for which a notice is not
required pursuant to subsection c. of this section.

���� 4.� a.� In any instance in
which a tenant association is not the successful purchaser, the seller of the
multiple dwelling shall provide evidence of compliance with P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill) by filing an affidavit
of compliance with the department within seven days of the sale.

���� b.� P.L.��� , c.��� (C.�������
) (pending before the Legislature as this bill) shall not apply to the
following:

���� (1)�� property that is the
subject of a taking by eminent domain or a negotiated purchase in lieu of
eminent domain;

���� (2)�� a proposed sale to a
purchaser pursuant to terms and conditions that preserve affordability;

���� (3)�� any sale of housing that
the commissioner has determined, by rule or regulation, shall not be subject to
the provisions of P.L.��� , c.��� (C.������� ) (pending before the Legislature
as this bill), because the housing is subject to a form of public assistance
that makes the sale incompatible with the requirements of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill);

���� (4)� rental units in any
hospital, skilled nursing facility, or health facility;

���� (5)� rental units in a
nonprofit facility that has the primary purpose of providing short term
treatment, assistance, or therapy for alcohol, drug, or other substance abuse;
provided, that the housing is incident to the recovery program, and where the
client has been informed in writing of the temporary or transitional nature of
the housing;

���� (6)� rental units in a
nonprofit facility that provides a structured living environment that has the
primary purpose of helping homeless persons obtain the skills necessary for
independent living in a permanent housing and in which occupancy is restricted
to a limited and specific period of time of not more than 24 months and where
the client has been informed in writing of the temporary or transitional nature
of the housing at its inception;

���� (7)� public housing units
owned or managed by a municipality, county, the State or the federal
government, or any agency or instrumentality thereof;

���� (8)� a residential property
for which the ownership consists of one or more natural persons who are
residents of the State, and who, together and separately, own no more than six
residential rental units;

���� (9)� any unit that is held in
trust on behalf of a disabled individual who permanently occupies
the unit, or a unit that is permanently occupied by a disabled parent,
sibling, child, or grandparent of the owner of that unit;

���� (10)� any property that is
owned by a college or university that is occupied primarily by students; or

���� (11)� any sale to an immediate
family member of the owner for a total purchase price below the assessed value
of the property.

���� c.� A tenant, tenant
association, or assignee shall not solicit or accept payment or any other
consideration for assigning or waiving any rights under P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill).

���� 5.� The Department of
Community Affairs, in coordination with the New Jersey Housing and Mortgage
Finance Agency, shall establish guidance and technical assistance programs to
support tenant associations in securing financing for the purpose of making offers
to purchase property pursuant to subsection c. of section 2 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill).

���� 6.��� In response to a
violation of P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill) that results in the inability of the tenant association to purchase
a multiple dwelling, an aggrieved tenant, tenant association, or assignee may
seek damages pursuant to the �Penalty Enforcement Law of 1999,� P.L.1999, c.274
(C.2A:58-10 et seq.).� The Attorney General shall have authority to accept
complaints, and enforce P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill) in accordance with the rules and regulations adopted
by the commissioner pursuant to section 7 of P.L.��� , c.��� (C.������� )
(pending before the Legislature as this bill).� The Attorney General may seek
compensatory relief on behalf of tenants and the State in a court of competent
jurisdiction.� The provisions of P.L.��� , c.��� (C.������� ) (pending before
the Legislature as this bill) shall not be construed to limit or constrain in
any way the rights tenants otherwise possess under State law.� In determining damages,
a court shall consider whether the owner acted in good faith compliance with
the requirements of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill), and shall assess appropriate penalties if the owner
did not act in good faith.

���� 7.� In consultation with the
Attorney General and the Administrative Director of the Courts, the
Commissioner of Community Affairs shall promulgate, pursuant to the
�Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), rules and
regulations necessary to effectuate P.L.��� , c.��� (C. )
(pending before the Legislature as this bill).�

���� a.� The commissioner shall
post a sample intent to sell notice, a sample proof of notice to tenants, a
sample notice of offer, a sample notice of tenant rights, and other necessary
documents on the department�s Internet website.

���� b.� The rules and regulations
of the commissioner shall include guidance for actions that shall constitute an
unreasonable refusal to enter into, or an unreasonable delay in the execution
or closing on a purchase and sale with a tenant association when the tenant
association has made a bona fide offer to meet the price and substantially
equivalent terms and conditions of an offer for which notice is required to be
given pursuant to subsection c. of section 3 of P.L.��� , c.��� (C.������� )
(pending before the Legislature as this bill).� The commissioner shall define
an �unreasonable delay� to include objective benchmarks, including failure to
respond within specified timeframes or refusal without a documented
justification.

���� c.� The rules and regulations
of the commissioner shall provide for the use of standardized forms, the use of
which shall be establish a rebuttable presumption of compliance.�

���� 8.� This act shall take effect
on the first day of the seventh month next following enactment, and shall apply
to a new contract of sale entered on or subsequent to that date.�

STATEMENT

���� This bill provides a tenant
association with an opportunity, prior to certain sales, to purchase a multiple
dwelling, meaning, with certain exceptions, a building with three or more units
of dwelling space.� By enhancing the ability of tenants to purchase their
buildings, this bill is intended to provide tenants of multiple dwellings with
a powerful tool to protect the future health, safety, and affordability of
their homes.�

���� The bill requires the owner of
a multiple dwelling to notify the Department of Community Affairs (department),
the tenant association, as applicable, and each residential tenant household of
the owner's intention to sell the property.� The bill also requires the owner
to provide a tenant association with participation meeting a minimum threshold,
an opportunity to purchase the property prior to entering into an agreement to
sell the property.� The bill, however, is not to place the owner under an
obligation to necessarily sell the property to a tenant association.

���� The time periods set forth in
this bill may be extended by agreement between the owner and the tenant
association.� However, the bill requires that, within 30 days following receipt
of an owner's intention to sell, the bill authorizes a tenant association with
participation meeting a minimum threshold to submit an offer to the owner to
purchase the property. � If the owner and the tenant association have not
entered into an agreement within 30 days after receipt of the notice of
the owner's intent to sell, the owner may enter into an agreement to sell the
property to a third-party.� If expressly authorized by the commissioner, the
time periods set forth in this bill may be waived in circumstances involving
imminent foreclosure, financial distress, or other exigent circumstances.

���� The bill provides that a
multiple dwelling containing fewer than 10 residential units is to be subject
to an expedited process, as determined by the commissioner, including reduced
notice and response timeframes.

���� Within seven days of the
execution of any purchase contract with a third party, the bill requires the
owner to submit a copy of the executed contract, along with an alternative
proposed purchase contract providing an opportunity for execution by the tenant
association.� If the tenant association elects to purchase the property, the
tenant association is required, within 30 days, to execute the proposed
purchase contract or another agreement acceptable to both parties.� Except as
otherwise specified by this bill, the terms and conditions of the proposed
purchase contract offered to the tenant association is to be the same as those
of the executed third-party purchase contract.

���� Any purchase contract offered
to, or proposed by, the tenant association is to provide certain minimum terms,
as enumerated in the bill.�

���� For the purposes of a sales
contract entered in accordance with the bill, a tenant association has 120 days
from execution of the purchase and sale agreement to perform all due diligence,
secure financing for and close on the purchase of the building.� Failure to
exercise the purchase option within 120 days constitutes a waiver of the
purchase option by the tenant association.�

���� If the tenant association does
not exercise its purchase option, the owner may proceed with the sale to the
third-party.� If the closing date in the third-party contract is extended, the
owner is required to provide the department and the tenant association an
amendment to the purchase contract extending the date of the closing.� Within
seven days of the termination of the third-party purchase contract, the owner
is required to notify the department and the tenant association pursuant to the
bill.� The tenant association is required to ensure that its purchase of the
property does not result in the displacement of one or more elderly tenant
households that choose not to participate in the purchase.� The department is
required to provide sample purchase contracts, incorporating the requirements
of the bill so that an owner is able to provide the document to a tenant
association.�

���� The bill provides that an
owner of a multiple dwelling is to be required to provide notice to each tenant
household, and tenant association, as applicable, of the intention to sell the
multiple dwelling by way of short-sale to avoid foreclosure.� The bill requires
this notice to be mailed with a simultaneous copy to the department within two
business days of the owner's submission of a request or application to the
mortgage lender for permission to engage in the short-sale or to accept a deed
in lieu of foreclosure.� This notice also is to include a notice of tenant
rights.

���� The bill prohibits a mortgage
lender of a multiple dwelling from accepting a third-party offer or deem the
owner's application for short-sale submitted for review unless certain
provisions of the bill are met.��

���� Before a multiple dwelling may
be transferred by short-sale or deed in lieu of foreclosure, the owner is
required to notify each tenant household, with a simultaneous copy to the
department, of any bona fide offer that the mortgage lender intends to accept.�
If households constituting at least 51 percent of multiple dwelling notify the
owner, in writing, that they desire to receive information relating to the
proposed sale, then, before any short-sale or transfer by deed in lieu of
foreclosure is finalized, the owner is required to provide each tenant
household, and tenant association, as applicable, with notice of the offer.�
Any notice of the offer is to include both the price, calculated as a single
lump sum amount, and any promissory notes offered in lieu of cash payment.

���� Under the bill, a tenant
association representing at least 51 percent of the households of the multiple
dwelling that are entitled to notice has the collective right to purchase,
following notice of a third-party offer that the mortgage lender intends to
accept, provided that the tenant association meets certain requirements
enumerated in the bill.

���� An owner is prohibited from
unreasonably refusing to enter into, or unreasonably delaying the execution or
closing of a purchase and sale with the tenant association when the tenant
association has made a bona fide offer to meet the price with substantially
equivalent terms and conditions.� Failure of the tenant association to submit a
purchase and sale agreement within the first 60-day period, to obtain a binding
commitment for financing within the additional 90-day period or to close on the
purchase within the second 90-day period, would serve to terminate the rights
of the tenant association to purchase.� A tenant association that has the right
to purchase in relation to a short sale may, for the purpose of maintaining the
use of the multiple dwelling as an inclusionary development, as defined in the
bill, assign its purchase right to other entities enumerated in the bill.

���� In any instance in which a
tenant association is not the successful purchaser of the multiple dwelling,
the seller is to be required to provide evidence of compliance with the
requirements of the bill by filing an affidavit of compliance with the department
within seven days of the sale.

���� The bill would not apply to
the following:

�

property that is the subject of a taking by eminent domain or a
negotiated purchase in lieu of eminent domain;

�

a proposed sale to a purchaser pursuant to terms and conditions
that preserve affordability;

�

any sale of housing that the commissioner has determined, by rule
or regulation, would not be subject to the provisions of the bill, because the
housing is subject to a form of public assistance that makes the sale
incompatible;

�

rental units in any hospital, skilled nursing facility, or health
facility;

�

certain nonprofit rental facilities that have the primary purpose
of providing short term assistance for alcohol, drug, or other substance abuse;

�

certain nonprofit rental facilities that provide a structured
living environment for helping homeless persons obtain the skills necessary for
independent living in a permanent housing;

�

public housing units owned or managed by a municipality, county,
the State or the federal government;

�

a residential property for which the ownership consists of one or
more natural persons who are residents of the State, and who, together and
separately, own no more than six residential rental units;

�

any unit that is held in trust on behalf of a disabled individual
who permanently occupies the unit, or a unit that is permanently occupied
by a disabled parent, sibling, child, or grandparent of the owner of that unit;

�

any property that is owned by a college or university that is
occupied primarily by students; or

�

any sale to an immediate family member of the owner for a total
purchase price below the assessed value of the property.

���� A tenant, tenant association,
or assignee would be prohibited from accepting payment or any other
consideration for assigning or waiving any rights under the bill.

���� The bill directs the
Department of Community Affairs, in coordination with the New Jersey Housing
and Mortgage Finance Agency, to establish guidance and technical assistance
programs to support tenant associations in securing financing for the purpose
of making offers to purchase property.

���� In response to a violation of
the bill that results in the inability of the tenant association to purchase a
multiple dwelling, an aggrieved tenant, tenant association, or assignee may
seek damages pursuant to the �Penalty Enforcement Law of 1999,� P.L.1999, c.274
(C.2A:58-10 et seq.).� The Attorney General is to have authority to accept
complaints, and enforce the bill in accordance with the rules and regulations
adopted by the commissioner.� The Attorney General is to be authorized to seek
compensatory relief on behalf of tenants and the State.�

���� In consultation with the
Attorney General and the Administrative Director of the Courts, the bill
directs the Commissioner of Community Affairs to adopt rules and regulations
necessary to effectuate the bill.�

���� The bill is to take effect on
the first day of the seventh month next following enactment, and would apply to
a new contract of sale entered on or subsequent to that date.