On November 10, 2026, Mayor Zohran Mamdani signed the Community Opportunity to Purchase Act (COPA) into law, ending a six-year legislative effort. The City Council passed the bill 38–9 in October after a prior version was vetoed by former Mayor Eric Adams. Owners, lenders, and investors in New York City multifamily property should begin planning now.

What COPA Does

COPA gives qualified nonprofits and certain joint ventures a first opportunity to make an offer on covered multifamily buildings before they can be marketed to third-party buyers. The final version is narrower than earlier drafts and applies to:

• Distressed buildings with four or more units, measured against a higher distress threshold (e.g., average violation counts or participation in HPD’s Alternative Enforcement Program)
• Buildings with 100 or fewer units subject to HPD-administered regulatory/affordability agreements

HPD estimates roughly 3,400 buildings fall within scope.

The Timeline

• 20 days for a qualified buyer to notify the owner and HPD of its intent to purchase
• 70 additional days to submit a competitive offer
• If all offers are rejected, or none are made, the owner may proceed to the open market

Bankruptcy and Foreclosure

COPA applies to voluntary sales, not court-ordered transfers. The law expressly excludes transfers effected by a judicial proceeding (including a judicially supervised foreclosure sale), a bankruptcy proceeding, or other operation of law, as well as deeds in lieu of foreclosure and related loan workout agreements. Mortgagee-approved short sales, however, are expressly covered. The practical result is a fork in the road for distressed covered buildings: a consensual pre-default sale or short sale must run COPA’s notice and offer process, while a foreclosure sale, deed in lieu, or bankruptcy sale does not. Lenders and owners should factor this into workout strategy. Open questions remain, including how COPA applies to a marketing process that begins before a bankruptcy filing and to a lender’s later resale of a property it acquires through foreclosure.

What Happens Next

COPA takes effect one year after enactment. During that window, HPD will issue rules covering eligibility criteria and the qualification process, publish a list of approved organizations, and launch an online portal for owners, prospective buyers, and HPD to submit required notices.

Key Considerations

• Deal timing: The 90-day offer window can extend marketing and closing timelines for covered assets. Build it into business plans, financing, and contract terms.
• Coverage diligence: Owners should assess now whether properties may meet the distress criteria or carry HPD regulatory agreements.
• Penalties: An owner who sells a covered property without giving the required notice faces a civil penalty of up to 15% of the sale price, and qualified buyers have a private right of action.
• Buyer financing: Even the bill’s sponsor has acknowledged that eligible nonprofit buyers will face significant financing hurdles, so how often COPA rights translate into closed deals remains to be seen.
• Rulemaking: Stakeholders should monitor, and consider participating in, HPD’s rulemaking process.

Industry groups, including REBNY and the New York Apartment Association, have engaged on the bill and continue to raise concerns about its timeline and its effect on a market already under pressure from rising costs and the rent freeze.

We are closely tracking implementation and will provide updates as HPD issues guidance. Please reach out to Eric Horn with questions about how COPA may affect your portfolio or pending transactions.

This alert is for informational purposes only and does not constitute legal advice.

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