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Bill

S 4244

Requires multiple dwelling building owners to provide notice to tenants and tenant associations of certain sales and provides tenant association with opportunity to purchase multiple dwelling.

2026-2027 Regular Session Introduced by Benjie Wimberly

Gives qualifying tenant associations a structured right of first refusal to purchase certain large rental buildings, with timelines, financing, and protections to keep tenants empo

Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee
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Bill Summary · S 4244

Summary of Bill S 4244 (NJ, Session 222)

Main purpose and intent

S 4244 aims to empower tenants of certain large residential buildings (multiple dwellings) by giving tenant associations an opportunity to purchase the property before it is sold to third parties. The bill establishes a structured “right of first refusal” process tied to sales, including short-sales or deeds in lieu of foreclosure, and sets out notice, timing, and financing requirements to facilitate tenant-led purchases while preserving the owner’s ability to sell.

Key provisions and changes

  • Definitions and scope

    • Covers “multiple dwellings” (as defined by the Hotel and Multiple Dwelling Law) with 3 or more units.
    • Introduces terms such as affiliate, designee, successor, eminent terms like inclusionary development, and minimum tenant participation percentage (51% of tenant-occupied units).

  • Notice to tenants and associations (section 2a)

    • Owners must notify the department (Department of Community Affairs), the property’s tenant association, and every residential tenant household of the intention to sell.
    • The owner must also provide the tenant association with the minimum participation threshold and an opportunity to purchase before selling to a third party, though sale to tenants is not mandated.

  • Tenant association rights and process (section 2)

    • A qualifying tenant association (51% participation) may designate a designee to act as purchaser.
    • After notice, the association has 30 days to submit an offer to purchase; failure to do so waives rights to purchase.
    • If the owner and association don’t reach agreement within 30 days, the owner can sell to a third party, with further steps outlined for third-party contracts and the association’s potential counter-offer.

  • Offer terms and due diligence (section 2e–f)

    • If a third-party purchase contract is offered, the tenant association must be given a parallel proposed contract with terms matching the third party, including earnest money caps, and a 120-day window to complete due diligence, secure financing, and close.
    • Earnest money provisions: deposit limits, escrow term, and potential refunds if owner delays due diligence.
    • Terms for financing, title, and contingencies, with protections to ensure the association can reasonably complete the purchase.

  • Displacement protections (section 2h)

    • The association’s purchase must not displace any elderly tenant households that opt not to participate.

  • Short-sale and deed-in-lieu provisions (section 3)

    • Requires notice to tenants and department when the owner seeks short-sale or deed in lieu.
    • Mortgagees cannot finalize such actions unless tenants have been informed and have had an opportunity to exercise rights (or waive them) within defined timeframes, including a 60-day window for the association to express interest or assignment rights.
    • If 51% of households request information, owners must provide details of offers, including price and any notes.

  • Right of first refusal and purchase timeline (section 3d–e)

    • Tenant association rights to purchase are contingent on meeting specific milestones: evidence of broad tenant approval, submission of a purchase agreement within 60 days, securing financing within 90 days, and closing within 90 additional days.
    • May assign the right to various entities (municipality, housing authority, state agency, or approved nonprofit/land trust entities) to preserve inclusionary development use.

  • Enforcement, remedies, and guidance (sections 5–7)

    • Violations allow damages under the Penalty Enforcement Law; the Attorney General can enforce and seek compensatory relief.
    • Department to publish sample contracts and issue regulations detailing unreasonable refusals or delays, standard forms, and other implementation guidance.

  • Exemptions (section 4b)

    • Several exclusions apply, including eminent domain transfers, affordability-preserving sales, public housing, certain small-by-ownership properties (up to six units if owned by state residents), healthcare facilities, and student-owned properties, among others.

  • Effective date (section 8)

    • Takes effect on the first day of the seventh month after enactment and applies to new sale contracts entered on or after that date.

Who would be affected

  • Owners of qualifying multiple dwellings
  • Tenants and tenant associations in those properties
  • Mortgagees, lenders, and mortgage servicers
  • Municipalities, housing authorities, state agencies, and eligible non-profit/designee entities that might acquire a property to maintain inclusionary development
  • The Department of Community Affairs and the New Jersey Housing and Mortgage Finance Agency (as partners in guidance and financing support)

Procedural and timeline aspects

  • Strong emphasis on defined response windows (generally 30–60–120–180 days in various sections).
  • Expedited processes for smaller buildings (fewer than 10 units) as determined by the commissioner.
  • Extensions possible by mutual agreement or commissioner authorization in special circumstances (e.g., imminent foreclosure).
  • Requires regulatory rulemaking and publication of sample forms to standardize compliance.

This bill seeks to broaden tenant participation in property transactions, promote inclusionary development, and provide a legal framework for tenant-led purchase efforts while balancing owner rights and real estate financing considerations.

Compiled from official sources — confirm details with the bill’s official record.

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