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8 <br /> <br />revocation of rental license, or fines. A Baltimore ordinance provides for a ROFR for tenants of <br />single family homes.22 <br /> <br />Chicago has an OTP statute for single room occupancy (SRO) units.23 The law requires <br />that an SRO owner seeking to sell must either: 1) provide the City and residents a 180 day notice <br />of intent to sell and enter into good faith negotiations with a preservation buyer agreeing to keep <br />the unit affordable for 15 years; or 2) pay the City $20,00 per unit. In addition, residents <br />displaced as a result of demolition, conversion, or sale of an SRO unit are entitled to relocation <br />payments of the greater of $2,000 or three months rent, or if the owner has opted to pay the <br />$20,000/unit, the relocation fee is $8,600. In addition to city enforcement, tenants have a private <br />right of action to enforce with an action for an injunction. In addition, the City may impose a <br />fine for each unit for each day a violation continues. As of Fall 2016, there had been no legal <br />challenges and the ordinance had been credited with saving 8 out of 10 SRO buildings. <br /> <br />As noted above, several city ordinances aimed at preserving publicly assisted housing <br />require advance notice of events which will terminate affordability. And all of the laws <br />providing for ROFR or OTP also require provision of advance notice to residents and <br />government entities, so that even if a purchase does not result, at least residents have received <br />advance notice. The only statute we are aware of that requires only advance notice to <br />unsubsidized properties is in Seattle.24 Seattle requires 60 days notice of sales of buildings with <br />at least one unit with rents affordable to 80% AMI. Administration is passive, applies only to <br />buildings “listed” (not privately sold), and violation leads to a $500 fine. It doesn’t appear that <br />this policy as structured is having much impact. <br /> <br />ROFR Laws <br /> <br /> The essence of a first refusal requirement is that a prospective purchaser exercising the <br />ROFR must match the terms of a sale proposed by another prospective buyer. The seller is <br />required to give notice, typically to residents and a city agency, of the proposed sale and make <br />the terms that must be matched available. The statutes discussed above typically provide a <br />preservation buyer with 60 to 180 days to match all or part of the other buyer’s offer. The fact <br />that the seller and buyer have had opportunity for extensive discussions prior to an offer or <br />agreement that must be matched means that whatever the preservation buyer must match may <br />disadvantage it relative to the other buyer. For instance, if a purchase agreement must be <br />matched, the buyer will typically have had time to perform some due diligence prior to its <br />execution and the ROFR period will be running at the same time as additional due diligence <br />period in the purchase agreement. The preservation buyer will necessarily have less time for due <br />diligence than the market rate buyer. A number of ROFR laws try to address specific problems <br />of this type by requiring, for instance, a minimum due diligence period for the preservation buyer <br />or by limiting the earnest money required. But it is probably the case that a buyer and seller <br />determined to frustrate a ROFR could come up with a way to do it. <br /> <br /> <br />22 BALTIMORE, MD., CITY CODE art. 13, subtit. 6. <br />23 CHI., ILL., MUNICIPAL CODE §§ 5-15-010 to 5-15-100. <br />24 SEATTLE, WASH., MUNICIPAL CODE §§ 22.907.030-.100.