What do tenants need to do to buy the building?

To buy the building, tenants need to follow three steps: First, they must register their interest to buy with the city and owners. Second, the tenants and owner must negotiate the price and terms of the contract. Third, once the contract is signed, there is a time period before settlement during which tenants look for financing and arrangements are made for the settlement date.

Step 1: Registration (30 days)
In a building of this size, tenants cannot purchase the building unless they are organized into a tenant association that represents a majority of the households in the building. If a tenant association already exists, it must register tenants’ interest in purchasing to the owner and the city within 30 days after receiving the offer. This registration application must be notarized and include:

1. A written statement accepting the owner’s offer to sell the building
2. A list of tenant members representing the majority of the heads of household in the building at the time of registration
3. Information regarding the elected officers of the Tenant Association
4. Copies of the tenant association articles of incorporation, certification or incorporation, and the bylaws

Step 2: Negotiation of Contract (120 days)
Once you’ve registered your interest in purchasing, the next step is to negotiate a contract with the owner. We have 120 days to do this. While we don’t need to prove financial ability to buy the building at this stage, we will likely be required to make a deposit of 5% of the agreed purchase price as a “good faith” sign of our intention to buy. If we are ultimately unable to raise the money to buy the building, the owner must return the entire deposit. Several organizations are willing to loan tenant associations the money to make the good faith deposit.

Step 3: Settlement (120 days)
Once you’ve signed a contract to purchase the building, the next step is to get a loan or other financing to actually purchase the building. We have at least 120 days to secure this financing; the time period may be extended under certain circumstances.

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