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(a) Sale of rental facilities. Prior to the sale of a rental facility of more than ten (10) rental units to any person for the purpose of creation of a condominium regime, the owner shall provide a right of first refusal to the county and its designated housing agency to purchase the rental facility.
(1) All sales or transfers of rental facilities of more than ten (10) units shall be deemed to be sales for the purpose of creation of a condominium regime and subject to the requirements of this section, unless the contract purchaser, at least thirty (30) days prior to transfer, enters into an agreement with the County to retain the property as a rental facility for three (3) years after the date of transfer of the property.
(2) An owner may rebut the presumption that the sale of the rental facility is for the purpose of creation of a condominium regime under this Section by notifying the Department in writing, and must thereafter satisfy the requirements of Chapter 53A.
(3) For purposes of this section, the Montgomery County Housing Opportunities Commission is the designated housing agency.
(4) All contracts and agreements for purchase of a rental facility, and title obtained pursuant thereto, shall be contingent upon and subject to full compliance with the requirements of this section.
(b) Notice required; exercise of right of first refusal.
(1) Prior to the sale of any rental facility under this section, the owner shall give written notice to the County and its designated housing agency of the terms and conditions under which the owner would agree to sell the rental facility. Notice shall be deemed given on the latest date this notice is actually received by both Montgomery County and its designated housing agency. This notice shall constitute the terms and conditions of the right of first refusal exercisable by the County or its designated housing agency hereunder.
(2) The County Executive may require the owner, by executive regulations adopted under method (3) of Section 2A-15 of this Code, to make available to the County and its designated housing agency information regarding the characteristics and condition of the facility deemed relevant to the exercise of the right of first refusal, including but not limited to architectural and engineering plans and specifications and facility operating data. In addition, the County Executive by regulation adopted under method (3) of Section 2A-15 of this Code may require the owner to provide access to the facility for purposes of inspection by the County or its designated housing agency; provided, the County, its designated housing agency, and their agents shall be responsible for any damage to the property caused by such inspection. The County Executive may provide by regulation that any information received by either the County or its designated housing agency, pursuant to this subsection, is confidential and not subject to public disclosure.
(3) The County or its designated housing agency may exercise the right of first refusal by compliance with the following:
a. The County or its designated housing agency shall, within sixty (60) days of the date notice is given, offer to the owner a binding contract containing substantially the same terms and conditions contained in the owner's notice, which contract shall be binding on the owner if the contract contains a contingency entitling the local government to secure financing within one hundred eighty (180) days from the date notice was given.
b. Thereafter, the County or its designated housing agency shall satisfy or waive the financing contingency clause within the one hundred-eighty-day period.
c. The settlement on the contract shall occur within one hundred eighty (180) days from the date notice was given.
(4) Notwithstanding the above, the owner and the County or designated housing agency may agree by the terms of the contract to extend the date within which the County or the designated housing agency shall secure financing, and within which settlement shall occur.
(5) Owner's Right To Proceed; Liability of County or Its Designated Housing Agency.
a. If the County and its designated housing agency do not exercise their right of first refusal, the owner may enter into a contract and transfer title to any other buyer under substantially the same terms and conditions as contained in the notice to the County and its designated housing agency if the owner files an affidavit with the Department certifying that the requirements of this Section have been met.
b. If the County and its designated housing agency fail to exercise their right of first refusal, the purchaser may proceed with creation of a condominium regime.
c. The County and its designated housing agency shall be under no obligation to exercise their right of first refusal and shall have no liability for failure to exercise the right of first refusal created hereunder.
(6) If the County or its designated housing agency purchases the rental facility pursuant to exercise of the right of first refusal, it shall retain or provide for the retention of the property as a rental facility for at least three (3) years from the date of acquisition.
a. This shall not, however, be construed as limiting the right to sell the property, enter into lease-purchase agreements, or do anything else permitted to be done by a property owner, subject only to the retention requirements set forth above.
b. In the event of purchase and subsequent sale of a rental facility by the County or its designated housing agency pursuant to this section, the County or its designated housing agency shall endeavor to first sell the property to an organization or entity which will minimize displacement of the tenants residing in the facility, as determined in the sole discretion of the County Executive.
(c) Exemptions. The right of first refusal provided under this section shall not apply to any of the following transfers of rental facilities:
(1) Any transfer made pursuant to the terms of a bona fide mortgage or deed of trust agreement.
(2) Any transfer to a mortgagee in lieu of foreclosure or any transfer pursuant to any other proceedings, arrangement or deed in lieu of foreclosure.
(3) Any transfer made pursuant to a judicial sale or other judicial proceeding brought to secure payment of a debt or for the purpose of securing the performance of an obligation.
(4) Any transfer of the interest of one co-tenant to another co-tenant by operation of law or otherwise.
(5) Any transfer made by will or descent, or by intestate distribution.
(6) Any transfer made to any municipal, County or state government or to any agencies, instrumentalities or political subdivisions thereof.
(7) Any transfer to a spouse, son or daughter.
(8) Any transfer made pursuant to the liquidation of a partnership or corporation; or,
(9) Any transfer into a partnership or corporation wholly owned by the person(s) so contributing.
(d) Certificate of compliance or exemption. Within 10 days after the written application of any interested person, and upon the receipt of satisfactory proof, the Director must deliver to that person a written certificate in recordable form on, or incorporating by specific reference, any instrument made to evidence the transfer of a rental facility stating, as the circumstances may require, that either:
(1) As to that transfer, the requirements of this section have been fully complied with and the rights of the County and its designated housing agency pursuant to this section have terminated; or
(2) That transfer is exempt from the requirements of this section.
The certificate of the Director shall be conclusive as to the County, its designated housing agency, the parties to the instrument, and all persons claiming under or through any of them. The Director may require the payment of a reasonable fee for the certificate.
If the Director fails or refuses to deliver the certificate within the time specified, then the Director shall so notify the applicant in writing within the time specified and shall state, in reasonable detail, the reason or reasons for such failure or refusal.
(e) Applicability. The right of first refusal provided under this section shall not apply to any sale or transfer of a rental facility for which a contract for sale or transfer of the rental facility was entered into prior to July 1, 1981, and a notice of intention to convert to condominium was given prior to July 1, 1981, provided there is compliance with the law in effect prior to July 1, 1981.
If a notice of the right of first refusal to purchase a rental facility was given prior to July 1, 1981, pursuant to any law in effect at the time the notice was given, the right of first refusal provided under this section shall not apply to any transfer of that rental facility made on substantially the same terms and conditions contained in that notice, provided there is full compliance with the law in effect at the time the notice was given. (1982 L.M.C., ch. 2, § 1; 1983 L.M.C., ch. 55, § 1; 1984 L.M.C., ch. 24, § 14; 1984 L.M.C., ch. 27, § 13; 1996 L.M.C., ch. 13, § 1.)