"The universe of properties was narrowed to about 2,100 buildings from the original approximately 10,000," Council Speaker Julie Menin said before the October 22 vote, according to The Real Deal. The Council passed the revised Community Opportunity to Purchase Act 38 to 9, with two abstentions. Mayor Zohran Mamdani said he looks forward to signing it.
Most coverage summed up the narrower scope as distressed buildings of 100 units or fewer. Owners of large rent-stabilized portfolios read that and figured COPA was a small-building problem. In the bill text, the 100-unit cap governs one of six eligibility tests. The other five have no size limit, and the law applies one building at a time. A 349-unit portfolio isn't covered or exempt as a whole. Each building is assessed separately, and the building with the worst record sets the exposure for the whole package.
Six Tests, One Unit Cap
The bill, Int. 0905-2026, Version A, applies to a Class A multiple dwelling with four or more units that meets any one of these conditions when the notice requirement kicks in:
- It has been in HPD's Alternative Enforcement Program for at least one year.
- HPD has determined it to be a distressed property subject to an in rem foreclosure action.
- It has been under an order to correct an underlying condition for at least one year.
- Its violation annual daily average is 3 or more.
- HPD denied it a certification of no harassment within the preceding year, and the denial has not been cured.
- It has no more than 100 dwelling units and carries an affordability restriction.
The 100-unit ceiling appears only in the sixth test. That test covers income-based occupancy restrictions under a regulatory agreement entered into with and managed by HPD. Restrictions imposed under 421-a don't count. Tests one through five are distress triggers, and none of them is limited by size. A 150-unit elevator building that has spent a year in AEP qualifies the same way a 12-unit walk-up does. Owner-occupied buildings with five or fewer units are excluded.
The building count also moved late in the process. City Limits reported that HPD raised its estimate from about 2,000 buildings to 3,400 after a late change. That change extended eligibility to every property with a city regulatory agreement, not just those whose agreements were about to expire.
The Violation Test Is a Per-Unit Average With a Fixed Date
For a typical legacy stabilized building, the fourth test carries the most practical risk, and its math is easy to misread. It does not count open violations on the day a sale begins. It counts only "subject violations," meaning hazardous or immediately hazardous violations that have been open more than 60 days and had a certification-of-correction deadline within the preceding three years. The bill adds up the subject violations open on each day of the prior 365 days, divides by 365, and then divides by the number of dwelling units. The figure that counts is the one as of the preceding June 1.
That is a high bar. A 40-unit building would need an average of 120 qualifying violations open every day for a year to reach 3.0. Very few well-run legacy buildings come close. Because the measurement is a rolling average fixed at one date, a building's status for the coming year is largely set by its record through that June 1. HPD has to publish the criteria and send written notice each year to owners whose properties meet them. Owners also get a chance to be heard on whether the law applies.
Why One Building Sets the Clock for the Package
The bill ties its applicability and its sale process to a "covered property," one building at a time. The owner of a covered property has to notify HPD and every certified qualified entity "prior to taking any action to sell." The bill defines that phrase to include making an offer to sell. Until the right of first offer is extinguished for every qualified entity, the owner can't take any action to sell that building to anyone else.
The notice has to state "the total number and type of dwelling units subject to a sale." The bill has no formula for allocating a portfolio price, no process for carving out covered buildings, and no rule for a package where one building qualifies and the others don't. Here is the friction for a bundled sale. If one building in a bundle trips a test, that building alone runs on the statutory clock, and the bill doesn't say how its share of a package price is set. The text doesn't settle that, and until HPD writes rules or a transaction tests it, it remains open.
The match right raises the same issue. A qualified entity that matches an offer subject to match has to do so "at the identical price, terms, and conditions." When the third-party offer covers a whole portfolio, the statute doesn't say what identical terms mean for a single covered building inside it. We covered the bundle-versus-carve decision before COPA existed. The bill adds another reason to know, building by building, what is in the book before choosing between the two.
The Clock on a Covered Building
Here is the sequence, in calendar days, as the bill sets it out:
| Stage | Who acts | Window |
|---|---|---|
| Notice of intent to sell | Owner to HPD and all certified entities | Before any action to sell |
| Statement of interest | Qualified entity | 20 days from notice |
| Due diligence package | Owner | 5 days from each statement |
| Bona fide offer | Qualified entity | 70 days after the 20-day period; HPD may add up to 5 |
| Accept, reject or counter | Owner | 10 days after the 70-day period |
| Contract of sale | Both parties, if accepted or countered | 30 days |
| Notice of an "offer subject to match" the owner intends to accept | Owner to HPD and first offering entity | Within 15 days of receiving it |
| Right of first refusal | First offering entity | 15 days to match |
The five-day diligence package is the part that touches the confidential marketing a large disposition depends on. It includes the current rent roll with legal rents, preferential rents and rental assistance, plus the trailing 12-month income and expense report, the outstanding mortgage balance, open violations, pending legal actions, any harassment findings from the past five years, and the price and terms of any open offer. Cullen and Dykman's October 22 alert notes that qualified entities must keep this information confidential to the extent the law requires. Owners may redact sensitive tenant information, and entities may share the material as needed to obtain financing or advice. Until an entity's right of first offer expires or is withdrawn, the owner also has to tell it the price and terms of every offer the owner receives.
The match window outlasts the offer stage. For one year after an owner rejects a qualified entity's first offer, or after the contract period runs out, a third-party offer the owner intends to accept becomes an "offer subject to match." Cullen and Dykman estimates that the initial steps can add about 130 days if an entity expresses interest, and that the match phase adds about 30 more. That estimate leaves out the time needed to assemble the notice materials and any litigation. The same alert warns that lenders and title companies may require proof of COPA compliance, which affects buyers' financing timelines.
What the Bill Leaves Outside
For generational owners, several exclusions matter as much as the triggers. Per the bill text, COPA does not apply to:
- Transfers by devise or intestacy, transfers to heirs or estates, and transfers into living trusts
- Transfers among listed relatives, including spouses, domestic partners, siblings, parents and children, grandparents and grandchildren, aunts, uncles, nieces, nephews, and first or second cousins
- Refinancing that keeps ownership in place
- Transfers of entity interests where the same person holds the controlling interest before and after
- Bankruptcy, judicial and other operation-of-law transfers, plus deeds in lieu
These exclusions cover moving a building within a family. They don't cover selling it out of the family. Heirs who inherit a covered building take it outside COPA, but if they later market it to a third-party buyer, the notice requirement applies again. Our estate sale playbook for heirs covers that later step. The entity-interest exclusion does not exempt a portfolio sale to a new controlling owner.
Where It Stands on the Calendar
As of October 26, the bill's Legistar record showed it at the Mayor's desk awaiting signature, with no law number assigned. It takes effect one year after it becomes law. Cullen and Dykman expects that effective date to be subject to likely constitutional challenges. For an owner thinking about a sale in late 2027 or 2028, the June 1 measurement date that falls before any planned marketing launch matters more than the signing date.
Industry groups still disagree on the bill. REBNY President James Whelan credited "constructive engagement" for "a more targeted and practical bill," while New York Apartment Association CEO Kenny Burgos said, "we're still missing the forest for the trees," as reported by City Limits.
FAQ
Does COPA force an owner to sell to a nonprofit? No. City Limits summarized it this way: owners must give qualified entities notice and a chance to make an offer or match one, but they are not compelled to sell to them. If an entity matches a third-party offer, though, the owner must then sell to that entity on those terms.
Can an owner withdraw after sending notice? Yes, subject to any accepted offer or signed contract. A later sale requires a fresh notice.
Who counts as a qualified entity? A 501(c)(3) nonprofit certified by HPD, or a joint venture in which such a nonprofit holds a controlling interest and is not tied to the venture's for-profit partner.
This post is general information, not legal, tax or financial advice. Confirm with your own counsel how the bill applies to your buildings, and especially how it would treat a bundled sale.
If you are planning a stabilized portfolio exit for 2027 or 2028, the first step is a building-by-building review of which assets could trip one of COPA's six tests, before any marketing begins. Exodus Capital structures dispositions around those questions. Discuss your exit strategy with our team.
