Third Party Transfer Program Rule Amendments
Proposed Rules: Closed to Comments (View Public Comments Received:1)
The proposed rule amends certain provisions of the Third Party Transfer program rules, in order to provide more specific guidance regarding evaluation of progress for the eventual ownership by tenants of a residential building that is subject to an in rem foreclosure judgment.
The City can convey residential property that is the subject of an in rem foreclosure judgment to a qualified third party. Under § 11-412.1(b)(2) of the New York City Administrative Code, the Department of Housing Preservation and Development (HPD) is responsible for promulgating rules about how third parties are deemed qualified and selected to acquire such property.
The rules governing how third parties may acquire such property as well as the third party transfer process are in Chapter 8 of Title 28 of the Rules of the City of New York (RCNY). Section 8-03(e) sets forth factors that HPD may consider in selecting a third party. Among those factors is “whether an application has been submitted under sponsorship of a Third Party on behalf of Tenants for eventual ownership by the Tenants of a property that is subject to an in rem judgment of foreclosure.” 28 RCNY 8-03(e)(9). Section 8-06 describes how HPD evaluates the tenants’ progress toward ownership of the property when a third party sponsor has submitted an application on their behalf. Section 8-07 describes how HPD determines whether or not to approve a transfer of property from a third party to tenants.
The proposed amendments modify or clarify portions of Sections 8-06 and 8-07. The amendments clarify that tenants must have continuously resided in the building after the conveyance of the property to the Third Party in order to be eligible for a transfer of ownership. The amendments also provide that at least 80% of such tenants must have expressed interest in ownership through subscriptions to buy units. The amendments clarify that among the factors that HPD may consider in making its determination for tenant ownership is whether the building can be financially viable as a cooperative. Finally, the amendments provide more flexibility in the timing of training for tenants and for determining the end of the interim evaluation period.