Urgent Action Alert: TOPA (Tenant Opportunity to Purchase) Reappears in Housing Bond Bill

Dear SPOA Members and Supporters:

Unfortunately for all property owners, TOPA (Tenant Opportunity to Purchase Act), also known as "tenant right of first refusal," has reappeared as a last-minute amendment to Governor Healey’s Housing Bill.

SPOA regards TOPA, or various versions thereof, as one of the most destructive housing policies being proposed in Massachusetts.

We are asking members and friends to immediately contact your legislators with heightened urgency to oppose this bill. You may find your legislators by using this link: https://malegislature.gov/Search/FindMyLegislator.

TOPA is a policy that sounds innocuous; it is possible that it sounds to legislators as “no big deal.” However, TOPA inserts the government and regulation in between the free market process of buyers and sellers. It interferes with the 1031 process and potentially with your ability to gift your property, after decades of investment.

Once again, legislators are reverting to policy impairing the free-market, harming owners, housing providers, and tenants – the very opposite effect of what they are trying to do – all while making clear to investors of capital that Massachusetts is no longer a place where business can be done.

No one else is going to warn legislators about policies adversely impacting your property rights. It is essential that you contact your representatives.

Below you will find talking points on TOPA. New information on the Transfer Tax will be forthcoming, should that reemerge, but you may mention to your legislators that as state leadership doubles down on harmful housing policy, it will have reverberating effects on those in the business of providing affordable housing.

Please copy us at askspoa@gmail.com so that we can track the responses our members are generating to the legislature.

1.    TOPA represents unwarranted government interference in private transactions between buyers and sellers

• TOPA will redefine the sale of housing in Massachusetts

• TOPA gives tenants unreasonable time frames to establish Tenant Associations to purchase your property before you can sell it on the open market 

• Timeframes permitted for the forming of said Tenant Associations will force sellers to forego cash buyer transaction, which is simply unworkable

• TOPA prevents you from selling your property in a traditional way, while lowering the sale value of your property

2.    TOPA creates impossible conditions for lenders

• No commercial banks/lenders will be able to work within TOPA confinements, which makes the mortgage financing of properties unworkable, thus rendering any future property transaction unworkable

• A climate of high interest rates and decreased liquidity requires qualified buyers. How would Tenant Association members qualify for loans?

3.    TOPA will fail Tenant Associations

• TOPA is ill-defined in its drafting, full of ambiguous and contradictory language

• TOPA will lead to endless legal challenges in the court system

• TOPA and Tenant Associations lay the groundwork for predatory lending practices favoring large corporate buyers, while lowering market values for smaller owners

• The legislature should attempt to work hand-in-hand with all stakeholders, instead of instituting punitive policy for owners who have invested in housing for decades 

4.    TOPA will take existing housing offline and discourage future investment in Massachusetts

• Valuable existing affordable housing will be taken offline which we desperately need to remain intact

• Under current market conditions, almost no new housing is being built. Reducing existing housing stock exacerbates the problem

• Massachusetts and its anti-business policies are demoralizing to business owners and discouraging future investment to our cities and towns

• Polices like TOPA are eroding Massachusetts’ tax base, pushing owners and capital investment out of state

5.    TOPA has failed in Washington DC

• TOPA tilts the playing field of small owners against larger housing providers

• Corporate housing providers have abundant capital and can withstand lengthy timelines on transactions

• TOPA has not created more housing in Washington DC which is the root of the housing crisis

• In Washington DC, less than 5 percent of tenants purchased the properties that they rented under TOPA

• TOPA interferes with 1031 exchanges, an important tool for owners

Please contact your state representatives and senators now to oppose TOPA.

Sincerely,

Small Property Owners Association (SPOA)