(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.

Terms Used In Rhode Island General Laws 34-45-8

  • Amortization: Paying off a loan by regular installments.
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Corporation: means the Rhode Island housing and mortgage finance corporation, a corporation, instrumentality and agency of the state established pursuant to the Rhode Island housing and mortgage finance corporation act, chapter 55 of Title 42. See Rhode Island General Laws 34-45-4
  • Department: means the department of administration. See Rhode Island General Laws 34-45-4
  • Development: means any structure or group of structures situated in the state which is federally insured or assisted; provided, however that the term "development" does not include any structure or group of structures which are not federally insured or assisted, although such structures may be commonly owned with units that receive such federal assistance or sent to such units; and provided further than this chapter shall not apply to a development whose owner gave notice to the United States department of housing and urban development pursuant to § 262 of the Housing and Community Development Act of 1987, 42 U. See Rhode Island General Laws 34-45-4
  • Devise: To gift property by will.
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • Federally insured or assisted: means any:

    (i)  Low income housing units insured or assisted under §§ 221(d)(3) and 236 of the National Housing Act, 12 U. See Rhode Island General Laws 34-45-4

  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Intestate: Dying without leaving a will.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Owner: means an individual, corporation, association, partnership, joint venture, or business entity which holds title to a development. See Rhode Island General Laws 34-45-4
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
  • Tenant: means a tenant, subtenant, lessee, sublessee, or other person entitled to possession, occupancy, or receiving the benefits of, a federally insured or assisted rental unit within a development. See Rhode Island General Laws 34-45-4
  • town: may be construed to include city; the words "town council" include city council; the words "town clerk" include city clerk; the words "ward clerk" include clerk of election district; the words "town treasurer" include city treasurer; and the words "town sergeant" include city sergeant. See Rhode Island General Laws 43-3-9
  • Use restrictions: means any federal, state, or local statute, regulation, ordinance, or contract which as a condition of receipt of any housing assistance, including a rental subsidy, mortgage subsidy or mortgage insurance, to a development:

    (i)  Establishes maximum limitations on tenant income as a condition of eligibility for occupancy of the units within a development; or

    (ii)  Imposes any restrictions on the maximum rents that could be charged for any of the units within a development; or

    (iii)  Requires that rents for any of the units within a development be reviewed by any governmental body or agency before the rents be implemented. See Rhode Island General Laws 34-45-4

(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.