§98.1007 Qualified Entity Right of First Refusal

• (a) Upon the owner’s rejection of all bona fide Offers to Purchase received from qualified entities and the owner’s intent to accept a third-party’s offer to purchase the assisted housing development , the owner shall first deliver a Notice of Right of First Refusal to all the qualified entities whose offers were rejected. A qualified entity has seven days from delivery of the Notice of Right of First Refusal to submit a counteroffer to the owner to purchase the assisted housing development on substantially the same terms and conditions as the pending third-party offer to purchase.

• (b) A Notice of Right of First Refusal shall contain all of the following:

  • (1) the address of the assisted housing development ;

  • (2) the name and contact information of the owner ;

  • (3) a statement of the owner’s intention to accept an offer to purchase from a third-party;

  • (4) the terms and conditions of the pending third-party offer to purchase the assisted housing development ; and

  • (5) a statement that the qualified entity has seven days to submit a counteroffer to purchase the assisted housing development on substantially the same terms and conditions as the pending third-party offer.

• (c) The owner shall accept a qualified entity’s counteroffer made under section 98.1007 and shall execute a purchase agreement for the assisted housing development within 30 days of offer acceptance. If multiple qualified entities submit counteroffers that meet the requirements of section 98.1007, the owner may accept any such offer.

• (d) Once a purchase agreement is executed, the owner and qualified entity have 120 days to close escrow, unless a different timeline is mutually agreed to by the parties. Prior to the close of escrow, the qualified entity shall:

Ch. Art. Div. 9 8 10 6

San Diego Municipal Code

Chapter 9: Building, Housing and Sign Regulations

(3-2025)

• (1) Obligate itself and any successors in interest to maintain the existing affordability of the assisted housing development for very low-, low-, or moderate-income households on substantially the same terms and conditions; and

• (2) Commit to renew governmental assistance or subsidies, if available and economically feasible, to maintain the affordability of the assisted housing development for its remaining useful life; and

• (3) Agree to record a deed restriction that documents the maximum rents that may be charged for dwelling units within the assisted housing development and other use restrictions that shall be binding on the qualified entity and its successors in interest and assigns; and

• (4) If the qualified entity is a local nonprofit organization or local public agency , ensure no officers or directors will have a financial interest in the assisted housing development to be purchased.

(“Qualified Entity Right of First Refusal” added 2-27-2025 by O–21917 N.S.; effective 3-29-2025.)