The Tenant Opportunity to Purchase Act (TOPA) or Community Opportunity to Purchase Act (COPA) grants tenants the right to buy their multifamily property when it’s for sale. These laws exist in various cities, and amid growing housing shortage concerns, numerous proposals are currently advancing through the legislative process nationwide. While the law is generally intended to preserve affordable housing, depending on the fine print, TOPA and COPA rules can put apartment investors at a substantial disadvantage as they face a different kind of competitor: tenants with a lot of power and a lot of time.
In California, the city of Berkeley is in the midst of hashing out a TOPA bill, which has gone through several revisions and updates since its presentation to the Berkeley City Council in 2020. In Massachusetts, TOPA legislation made it all the way to the governor’s desk in early 2021, only to be vetoed. Now, state legislators are giving it another go, with the state house and senate having presented joint legislation described as an act to guarantee a tenant’s first right of refusal. And the list goes on, with proposals at the local and state level across the U.S.
While these proposed laws vary, they all center on the goal of preserving affordable housing by preventing a buyer from coming in, upgrading a property, and increasing rents. These laws generally cover all multifamily properties, even luxury apartment communities, but it’s the rent-controlled pool of properties in market-rate or even upscale neighborhoods that could present challenges for
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