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Process and timeline for tenant petitions for ownership in TPT program

2:00:20

·

3 min

Deputy Commissioner Kim Darga explains the detailed process and timeline for tenant petitions for ownership in the Third Party Transfer (TPT) program. The process involves multiple stages from pre-foreclosure to potential conversion to cooperative ownership.

• Pre-foreclosure stage: 4-month period for tenants to submit required materials after city requests foreclosure judgment • Eligibility criteria: Buildings must have at least 10 units, be 50% occupied, and have 80% of residents sign the application • Post-foreclosure stage: Developer/owner works on renovation needs and financing plan • Final decision stage: 80% of residents must meet various requirements (attend training, be in good standing on rent, remain interested) through construction completion

Pierina Ana Sanchez

2:00:20

Thank you.

2:00:20

And then for tenant petition, their HPD's rules provide a period for interim an interim period for HPD to evaluate whether tenants will be approved for eventual ownership of the property.

2:00:32

How long is the interim evaluation period?

Kim Darga

2:00:35

So there are maybe 3 stages to think about here.

2:00:38

There is what happens prior to a foreclosure.

2:00:43

So once the city requests the judgment of foreclosure, We then flyer the building.

2:00:48

We notify all residents of the status as well as the opportunity to petition to be a cooperative.

2:00:57

Residents have approximately 4 months from that point in time, the date would be identified in the notification to them to submit the required materials.

2:01:07

And only certain buildings are eligible to petition So building has to be at least 10 units 50% occupied.

2:01:19

And then they have to be able to identify a sponsor that is interested in working with them.

2:01:24

We have a prequalified list.

2:01:26

They can look at And they also, at least 80% of the residents have to sign the application expressing interest.

2:01:36

50%.

2:01:37

80%.

2:01:38

Sorry.

2:01:38

Did I say 50?

2:01:39

Yeah.

2:01:39

Okay.

2:01:40

Sorry.

Pierina Ana Sanchez

2:01:40

But I know I say 80%.

Kim Darga

2:01:43

And then so that's kind of the 1st stage.

2:01:46

At that point in time, you know, the the sponsor will work to after foreclosure, will work to identify the renovation needs and put a financing plan together to stabilize the housing.

2:02:02

Once the developer owner closes on financing, meaning they take title, They have the financing necessary to renovate the building.

2:02:12

That then brings us to the next stage.

2:02:15

During that period, tenants may need to relocate, so they have to cooperate during the relocation process.

2:02:22

And they have to at least 80% of the residents have to attend training.

2:02:27

At least 80% have to be in good standing on their rent payments.

2:02:34

At least 80% have to remain interested, and those requirements exist basically through the point in time construction completes, and the conversion process starts.

2:02:46

So if the residents cannot demonstrate, they can meet those 80% milestones.

2:02:52

At that point in time, the property would be deemed ineligible and would be an affordable rental property.

2:03:02

So tenants were not displaced as part of that process.

2:03:05

But that is the point in time where there has to be a final decision.

2:03:09

And some of our concern is that sometimes that period has stretched a long time because everybody We want to give the residents the best chance at converting.

2:03:22

It's been nobody wants to make the hard decision of saying no.

2:03:27

And but it does really need to be a firm line requirement.

2:03:31

Because otherwise you risk destabilizing the housing itself because the property is still oftentimes in construction with a construction loan that needs to be paid.

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Statistics on property transfers and cooperative conversions in TPT program

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Financial support for properties in TPT program

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