TITLE 34
Property

CHAPTER 34-45
Preservation of Federally Insured or Assisted Housing

SECTION 34-45-8


§ 34-45-8 Offer to sell – Rights of first refusal.

(a) At or before the time an owner of an existing federally insured or assisted development or an owner of a development that was federally insured or assisted within the preceding two (2) years (1) offers to sell, lease, or otherwise dispose of a development to any person or entity other than those persons or entities listed in § 34-45-7, or prepays any obligation secured by a development, in a manner which would result in either (i) a discontinuance of the use of the development as a federally insured or assisted housing development, or (ii) cause the termination of any use restrictions which apply to the development, or (2) records a declaration of condominium, pursuant to chapter 36.1 of this title, with respect to all or any portion of a federally insured or assisted development, he or she shall first provide to each person and entity listed in § 34-45-7 a written copy of a bona fide offer to sell, by registered or certified mail, return receipt requested, and post a copy of the offer of sale in a conspicuous place in common areas of the development.

(b) Not less than one year prior to terminating any contract subject to § 34-45-5 of this chapter an owner shall first provide to each person and entity listed in § 34-45-7 a written copy of a bona fide offer to sell, by registered or certified mail, return receipt requested, and post a copy of the offer of sale in a conspicuous place in common areas of the development.

(c) An offer of sale made pursuant to subsections (a) and (b) must contain, at a minimum:

(1) The essential terms of the sale, which shall include, but which need not be limited to:

(i) The sale price, which shall be no higher than the development's fair market value, said value to be based on its higher and best use, without affordability restrictions, as determined by the average of two (2) independent appraisals performed by two (2) appraisers qualified to perform multi-family appraisals, with one of said appraisers to be selected from a list of appraisers developed by the corporation;

(ii) The terms of seller financing, if any, including the amount, the interest rate, and the amortization rate thereof;

(iii) The terms of assumable financing, if any, including the amount, the interest rate, and the amortization rate thereof; and

(iv) Proposed improvements to the property to be made by the owner in connection with the sale, or other economic concessions by the owner in connection with the sale, if any.

(2) A statement that each of the persons listed in § 34-45-7 has the right to purchase the development under this chapter, in the order and according to the priorities established by subsection (c);

(3) A summary of tenants' rights and sources of technical assistance as contained in a form prescribed by the department. If no such form has been prescribed by the department, the owner will be deemed in compliance with this paragraph if the statement refers to this chapter;

(4) A statement that the owner will make available to each of the persons listed in § 34-45-7 a floor plan of the development and an itemized list of monthly operating expenses, utility consumption rates, and capital expenditures within each of the two (2) preceding calendar years, within seven (7) days after receiving a request therefor; and

(5) A statement that the owner will make available to each of the persons listed in § 34-45-7 the most recent rent roll, a list of tenants, a list of vacant units, and a statement of the vacancy rate at the development for each of the two (2) preceding calendar years, within seven (7) days after receiving a request therefor.

(d) If a person or entity other than the persons and entities listed in § 34-45-7 offers to purchase, lease, or otherwise acquire a federally insured or assisted development in a manner which would result in either (1) a discontinuance of the use of the development as a federally insured or assisted housing development, or (2) cause the termination of any use restrictions which apply to the development, the owner of the development shall, before accepting the third-party offer, provide to each person and entity listed in § 34-45-7, by registered mail, return receipt requested, (i) written notice of the pendency and essential terms of the offer, and (ii) a bona fide offer to sell the development to those persons and entities listed in § 34-45-7 upon the same terms and conditions of the third-party offer. An offer of sale made pursuant to this subsection must contain, at a minimum, all of the information required of an offer of sale made under subsections (a) and (b). The right of first refusal created under this subsection shall not be deemed to allow any of the persons or entities listed in § 34-45-7 to vary the terms of any third-party offer made to an owner or to make a counter offer to the owner.

(e) The rights of first refusal created under this section are created and conferred in the following order and in accordance with the following priorities: (1) the tenant association of the development, first priority; (2) the corporation, second priority; (3) the housing authority of the city or town in which the development is located, third priority; and (4) the municipal government of the city or town in which the development is located, fourth priority.

(f) No right of first refusal shall apply to a government taking by eminent domain or negotiated purchase; a forced sale pursuant to a foreclosure; a transfer by gift, devise, or operation of law; or a sale to a person who would be included within the table of descent and distribution if there were to be a death intestate of an owner.

History of Section.
(P.L. 1988, ch. 508, § 1; P.L. 1989, ch. 493, § 1; P.L. 2006, ch. 267, § 1; P.L. 2006, ch. 295, § 1.)