The owner of an assisted project shall give written notice of intent not less than 1 year and not more than 2 years before the effective date of the protected action. The owner shall give the notice of intent to: the chief executive officer of each political subdivision in which the assisted project is located; each public housing authority in a political subdivision in which the assisted project is located; each tenant association that represents a rental unit in the assisted project, if the tenant association has given the owner the title and mailing address of a representative to receive the notice of intent; each assisted household of the assisted project; and the Secretary, who shall notify every other person who has requested the notice of intent.

A notice of intent, other than one sent to an assisted household, shall: state that the owner intends to begin or allow a protected action; give enough information so that the Department can decide whether the proposed protected action will be lawful on its effective date; state the expected impact of the protected action during the 3 years after the proposed action on: rents in the assisted project; and continued occupancy in the assisted project by existing assisted households; give the information about the assisted project from the most recent tenant recertification documents required by the United States Department of Housing and Urban Development, the United States Department of Agriculture, or the Department of Housing and Community Development on: the number of assisted households; the number of assisted units by number of bedrooms; the distribution of assisted households by race, gender, income, and family size; the number of households with elderly individuals or individuals with disabilities; and the number of households with minors; give financial information on the assisted project for the 3 years before the notice of intent that is: required by the Department; and based on financial information kept by the owner; and include a list, based on information that is reasonably available, of all households in the assisted project whose leases were terminated in the 180 days before the notice of intent. A notice of intent sent to an assisted household shall contain: a brief summary of the protected action; a brief statement of the expected impact of the protected action on rents and on the existing assisted household’s continued occupancy during the 5 years after the protected action; a brief summary statement of the assisted household’s rights and obligations under this title; a statement that each political subdivision in which the assisted project is located, a local public housing authority, and the Department may have additional information about the protected action and sources of technical assistance and financing for the exercise of a right of first purchase under this title; the name, address, and phone number of the owner’s agent to whom the assisted household may apply for tenant protection assistance under this title; and any other information the Secretary considers necessary to further the purposes of this title.

An owner may not take a protected action unless the owner has provided all tenant protection assistance required by this title. Before a sale or conveyance of an assisted project that is a protected action, the owner shall offer the right of first purchase in accordance with this subtitle.

The owner shall offer the right of first purchase by written notice to: each political subdivision in which the assisted project is located; each local public housing authority; each group that represents tenants at the assisted project and has registered with the Secretary; each low-income housing developer that has registered with the Secretary and is exempt from taxation under § 501(a) of the Internal Revenue Code; and any other person that has experience in the ownership or operation of low-income housing projects, is unrelated to the owner, and has registered with the Secretary. The owner shall deliver the offer: with or after the notice of intent; and to a person registered with the Secretary within 10 days after the Secretary gives the owner the title and mailing address of the person. The owner shall deliver a copy of the offer to the Department. The owner’s offer shall include: the terms of the offer, including: the date of the offer; the purchase price, as determined under § 7-205(b) of this subtitle; a date for settlement, which must be 1 year or more after the later of: the date of the owner’s offer; and the date of the notice of intent; a provision stating that: the buyer’s obligation is contingent on the buyer’s obtaining financing; and the contingency will not expire before the settlement; a requirement that the first $10,000 of any deposit by the purchaser be nonrefundable, except as provided in § 7-205(c)(1)(iii) of this subtitle; and other terms determined under § 7-205(b) of this subtitle; and a summary of the procedures and timing to exercise the right of first purchase, as specified in this subtitle and in any departmental regulations. The date of the owner’s offer is the date on which it is delivered to the last political subdivision to which it must be delivered.

In this section, “fair market value” means the price that a willing buyer would pay a willing seller, neither under any compulsion to buy or to sell, for a residential rental project, assuming: the highest and best use under current zoning; and no requirements to rent to low-income tenants other than the requirements of any federal law, § 7-214 of this subtitle, or other State law, local law, governmental program, agreement, covenant, or restriction that will continue to affect the project after sale or conveyance. Except as required under § 7-204(b) of this subtitle, if the owner receives an offer to purchase the assisted project in the form of a binding purchase contract from an unrelated bona fide purchaser, the terms of the owner’s offer shall be substantially the same as those offered by the bona fide purchaser, including purchase price, terms of payment, financing contingencies, and assumable or purchase money financing. If the owner has not received an offer that qualifies under paragraph (1) of this subsection: the purchase price of the owner’s offer shall be the lesser of: the purchase price of any offer that does not qualify under paragraph (1) of this subsection; and the fair market value of the property as determined under subsection (d) of this section; the owner’s offer shall be accompanied by a written appraisal of the fair market value of the assisted project prepared in accordance with subsection (d) of this section; and the remaining terms of the purchase contract: shall be as required under § 7-204(b) of this subtitle; shall otherwise conform to terms that are accepted as reasonable in that market; and are subject to final review by the Department. Any party identified in § 7-204(a) of this subtitle may accept the owner’s offer within 120 days after the date of the owner’s offer. If more than one party submits a timely acceptance of the owner’s offer, the Secretary shall select as purchaser the party that, in the Secretary’s discretion, the Secretary determines will most benefit the assisted households. The owner shall return the entire deposit made by each party whose offer was not accepted. If a party that has accepted the owner’s offer withdraws the acceptance, any remaining party identified in § 7-204(a) of this subtitle may accept the owner’s offer in accordance with paragraph (1) of this subsection within: 120 days after the date of the offer; or 60 days after the acceptance is withdrawn. The acceptance shall be followed by settlement of the purchase of the assisted project by the owner’s stated closing date or any extension agreed to by the owner. If the owner is required by subsection (b)(2) of this section to submit an appraisal, acceptance of the owner’s offer made under this subtitle may state an adjusted purchase price based on an alternate fair market value. The alternate fair market value shall be supported by a written appraisal prepared by an appraiser selected by the purchaser and delivered to the owner. If the owner objects to the adjusted purchase price, the owner and the purchaser may: set the purchase price at the average of the fair market values each party has obtained by appraisal; or have the two appraisers select a third appraiser, whose fee shall be shared equally, and whose fair market value shall be binding. Each appraiser who submits an appraisal under this subtitle must be a member in good standing of the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers.

This section applies if the owner’s offer is not accepted and the acceptance period under § 7-205(c) of this subtitle has expired. The owner may sell or convey the assisted project to any person on terms and conditions not more favorable to the purchaser than those of the owner’s offer. The owner may sell or convey the assisted project on terms and conditions more favorable to the purchaser than those of the original offer under this subtitle only after the owner again offers the right of first purchase as required by this subtitle based on the new terms and conditions.

This section applies if: none of the parties identified in § 7-204(a) of this subtitle exercises the right of first purchase; the assisted project has not been conveyed in accordance with § 7-206 of this subtitle; and the owner has not taken a protected action within 2 years after the original notice of intent. Before taking a protected action, the owner shall serve another notice of intent on each party identified in § 7-201(b) of this subtitle. Before taking a protected action under § 7-102(a)(4) of this title, the owner shall serve notice of a right of first purchase as required by this subtitle.

At the settlement for an assisted project under a right of first purchase, the purchaser shall execute and record, in a form that the Secretary approves, a covenant running with the land. The covenant shall restrict the use of all assisted units to residential rental property for assisted households, or to some other purpose approved by the Secretary, for at least the greatest of: the remaining term of the mortgage as of the date of its prepayment; the remaining term of the rental assistance agreement, including all stated renewal terms, as of the date of its termination; and 20 years.

A right of first purchase under this subtitle may be assigned only to another party having the right of first purchase under this subtitle.

A political subdivision or a housing authority may exercise a right of first purchase under this subtitle and may develop, acquire, improve, own, operate, and manage a rental housing project acquired under the right of first purchase and do all things necessary or convenient to exercise these rights. In any rental housing project purchased under a right of first purchase under this subtitle and owned or managed by a housing authority authorized under Division II of this article, this subtitle supersedes: §§ 12-401, 12-402, and 12-405 of this article; and all otherwise applicable restrictions on tenant income under Division II of this article.

The right of first purchase under this subtitle does not apply to the prepayment of a mortgage and sale of an assisted project if the prepayment and sale are done under a plan of action approved by the Secretary of Housing and Urban Development under § 225 of the Housing and Community Development Act of 1987, 12 U.S.C. § 4107.

An owner that gives notice of intent shall provide tenant protection assistance under subsection (b) of this section unless: the owner has offered the right of first purchase in accordance with this subtitle; and the assisted project is purchased by a party listed in § 7-204(a) of this subtitle in conjunction with a protected action. Tenant protection assistance consists of: paying each assisted household $475 on or before the day that the assisted household vacates the unit; reimbursing each assisted household for relocation expenses exceeding $475 and up to $950, actually and reasonably incurred; and offering each assisted household that is current in its rent and has not violated any other material term of its lease, a lease extension for at least 1 year from the giving of the notice of intent. Except as provided in paragraph (2) of this subsection, the periodic rent during the extended lease under subsection (b)(3) of this section may not exceed the amount that the assisted household must contribute for periodic rent under the assisted household’s current lease. The periodic rent may be increased only on the anniversary of the assisted household’s current lease, and the increase may not exceed the lesser of: the increase allowed by applicable federal, State, or local law; and the product of the amount the household must contribute for periodic rent for the preceding year multiplied by the percentage increase for the U.S. Consumer Price Index that the Secretary selects for the most recent 12-month period. Except as allowed or required by the Secretary, all other terms and conditions governing the extended lease shall be the same as those of the lease in effect on the day preceding the giving of the notice of intent.

An assisted household is a designated household if it includes: an individual who has been a member of the household for at least 12 months before the notice of intent is given and who: is at least 62 years old on the day that the notice of intent is given; or qualifies as a person with disabilities under § 3(b)(3) of the United States Housing Act of 1937, 42 U.S.C. § 1437f; or a minor.

This subsection applies if a protected action affects a unit occupied by a designated household that: is current in its rent and has not violated any other material term of the lease; within 60 days after the giving of the notice of intent, provides the owner with written notice showing that the household qualifies as a designated household and stating that the household is applying for an extended lease under this section; and executes the extended lease form delivered in accordance with § 7-216(a)(2) of this subtitle and returns it to the owner within 60 days after the giving of the notice of intent. Except for a protected action under § 7-102(a)(3) of this title, an owner may not take a protected action that affects a unit in an assisted project occupied by a designated household without offering to the designated household an extended lease for at least 3 years beginning on the day of the giving of the notice of intent. The owner shall set aside at least 20% of the assisted units in an assisted project for designated households to receive extended leases under this subtitle. If the number of assisted units occupied by designated households that meet the standards of subsection (a) of this section exceeds 20% of the assisted units, the owner shall allocate the available units: first to designated households with an individual described under § 7-213(1) of this subtitle with priority based on length of continuous residence; and then to designated households that do not contain such an individual but include a minor, based on length of continuous residence.

If an assisted project includes a unit occupied by a designated household and the assisted project is sold or conveyed after a protected action: the provisions of this subtitle concerning extended leases continue to apply despite the sale or conveyance; the new landlord shall provide each designated household with written notice of the sale or conveyance; and on or before the execution of a contract of sale, the seller shall provide the purchaser with written disclosure of each unit occupied by a designated household subject to the provisions concerning extended leases for designated households.

Along with the notice of intent, the owner shall deliver to each assisted household: an application form on which the assisted household may include the information required by § 7-214(a) of this subtitle; an extended lease form for a designated household that contains the terms required by this subtitle and clearly indicates that the lease will be effective only if: the assisted household executes and returns the lease form within 60 days after the giving of the notice of intent; and the assisted household is allocated one of the units made available to designated households, based on its ranking under § 7-214(b) of this subtitle and the number of assisted households executing and returning leases; and a notice that sets forth the rights and obligations of the assisted household under the provisions of this subtitle concerning extended leases for designated households. Within 75 days after the giving of the notice of intent, the owner shall notify each assisted household that submits the documentation required by § 7-214 of this subtitle: whether the household meets the standards of § 7-214 of this subtitle, or, if not, an explanation of which standards have not been met; and whether the extended lease has become effective. An extended lease for a designated household shall be for a term beginning on acceptance and ending at least 3 years after the giving of the notice of intent. The initial periodic rent for the extended lease may not exceed the amount the household is required to contribute for rent under the household’s current lease. The periodic rent may be increased only on the anniversary of the assisted household’s extended lease, and the increase may not exceed the product of the amount the household must contribute for periodic rent for the preceding year multiplied by the percentage increase for the U.S. Consumer Price Index that the Secretary selects for the most recent 12-month period. Except as otherwise provided in this section, the extended lease shall contain the same terms and conditions as the lease in effect on the day before the giving of the notice of intent.

Within 75 days after giving the notice of intent, the owner shall provide to each party required to receive the notice of intent: a notice indicating the number of units in the assisted project being made available to designated households under § 7-214(b) of this subtitle; a list of the households meeting the standards of § 7-214(a) of this subtitle, indicating the ranking of each under § 7-214(b) of this subtitle; a list of the households returning the documents required by § 7-214(a) of this subtitle that do not meet all of the standards of that subsection and copies of the notices sent to those households under § 7-216(b) of this subtitle; and a list of the households with effective extended leases.

A designated household may terminate an extended lease at any time by giving written notice to the landlord: at least 1 month in advance, if less than 12 months remain on the lease; or at least 3 months in advance, if 12 months or more remain on the lease. An extended lease for a designated household under this subtitle shall include the termination provisions of this section. The extended tenancy of a designated household ends: 90 days after the last member of the assisted household who lived in the unit on the date of the notice of intent dies or moves from the unit; on eviction for failure to pay rent or for violation of another material term of the extended lease; or on voluntary termination by the designated household under subsection (a) of this section.

This section applies if a protected action involves substantial rehabilitation or reconstruction that does not allow continued occupancy of a unit because of danger to the health and safety of the household. The owner shall give notice of the reconstruction or rehabilitation at least 1 year before the date when the unit must be vacated. The notice shall explain the household’s rights under this section. To allow work to be performed in a unit, a designated household with an extended lease under § 7-216 of this subtitle may be required to: vacate the unit not earlier than 1 year after the giving of the notice of intent; and relocate at the expense of the owner to a comparable unit in the assisted project. If a comparable unit is not available, the designated household may be required to vacate the assisted project until the work is completed. When the work is completed, the owner shall notify the designated household of the completion of the work. The designated household has 30 days to return to the original or a comparable rental unit after the owner notifies the designated household that the work is completed. The term of the extended lease begins when the designated household returns to the assisted project. The owner shall pay all reasonable relocation expenses of a designated household required as a result of subsection (d) of this section. The owner shall pay relocation expenses in accordance with § 7-212(b)(2) of this subtitle on or before the date when the designated household vacates the unit. The owner shall also reimburse a designated household that returns to its unit under subsection (c)(2) of this section for its relocation expenses in accordance with § 7-212(b) of this subtitle. In accordance with the schedule of fair market rents of the United States Department of Housing and Urban Development in effect on the moving date, within 15 days after that date, the owner shall pay compensation equivalent to 3 months’ rent for a unit of comparable size and quality to each designated household eligible under this subsection. A designated household is eligible for compensation under this subsection if it: is current in its rent payments and has not violated any other material term of its lease; includes an individual described under § 7-213(1) of this subtitle and: does not have an extended lease; or cannot have an extended lease because the number of assisted units set aside under § 7-214(b) of this subtitle is less than the number of qualified households; or otherwise qualifies for an extended lease but is required to vacate its unit under subsection (c)(2) of this section.

After notice and public hearing, a political subdivision may find that, because of a protected action, a low-income and moderate-income rental housing emergency exists in all or part of its jurisdiction. The political subdivision shall make findings as to: the nature and incidence of protected actions; the resulting hardship to and displacement of tenants; and the scarcity of low-income and moderate-income rental housing. Except as provided in paragraph (2) of this subsection, on finding that there is an emergency under this section, a political subdivision may enact a law, ordinance, or regulation to: grant to a designated household a right to an extended lease for a period in addition to that granted under § 7-214 of this subtitle; or extend any other provision of this subtitle concerning extended leases. A political subdivision may not require that: more than 20% of assisted units in an assisted project be set aside for extended leases for designated households; or the term of an extended lease for any household made a designated household by the political subdivision exceed 3 years. The political subdivision may require that the notice required under § 7-216(a)(3) of this subtitle be modified to disclose the effects of any actions taken under this section. Within 10 days after enacting a law, ordinance, or regulation in accordance with this section, a political subdivision shall send a copy to the Secretary of State and the Secretary of Housing and Community Development.