If Cairnie Pokorney’s landlord sold his apartment building in Derry, he may never be notified of the sale. The new owners could then increase the rent as they wish, or tell Pokorney to hit the road because they are renovating.

For a young professional in New Hampshire, Pokorney, 27, doesn’t have a couple of hundred dollars in his budget to cover a sudden rent increase, he said. But if tenants were given adequate notice of a building sale, they could plan accordingly for a potential rent increase or start a search for a new place to live.

A bill introduced in the New Hampshire legislature, HB 112 proposes that landlords have to give 60 days notice to tenants if they are intending to sell their property. It also would provide a description of the acceptable price, terms and conditions for the property if tenants wanted to make an offer to purchase it themselves.

The benefits are twofold, said Rep. Ellen Read, a Newmarket Democrat, and the bill’s sponsor. It would not only allow for tenants to know of an impending sale, but it would also allow them the chance to organize and potentially buy the building themselves as a cooperative.

Housing cooperatives

The housing cooperative idea is modeled off of the success of Resident Owned Communities in manufactured housing parks, said Read.

Under current New Hampshire law, tenants are guaranteed 60 days notice prior to the sale of a manufactured housing park. They are also notified of the price, terms and conditions that constitute an acceptable offer for the property. During this time frame, residents can then organize and form a community co-op if they desire.

This notification period has resulted in the formation of 145 resident-owned communities. In these communities, the cooperative owns the land of the park, while residents own their individual manufactured homes. All decisions, like rent increases or fines and fees, are determined by a democratic process and positions are held within the community to oversee the bylaws.

The Community Loan Fund is one organization that helps organize these residents following a sale notification and provides loans to the cooperative to purchase the land.

This model would be equally beneficial for multi-family home residents, said Read.

“You’re making tenants into homeowners,” she said. “When you have higher rates of homeownership, you have more stable communities, more stable workers, more stable consumers, for your businesses in that community. You have residents of the community that are more long-term invested in the well-being of the community. Pretty much every single metric improves with increased homeownership rates.”

The proposed bill does not impede on the landlord’s ability to sell the property, said Read. It would just allow for tenants to provide their own offer under a co-op, if desired.

Housing instability

The need for notification prior to the sale of a multifamily home is crucial in New Hampshire’s current housing market, said Read.

In her district – which includes Newmarket, Littlefield, Four Corners and Clark Hill – the lack of housing availability on the Seacoast and increased rents have left many of her constituents without housing, she said.

Two of these folks are retired veterans. Several work in the communities as waiters. Three are postal workers.

“We talk about this in economic terms with workforce Housing, do we have the workers, but it’s really a human crisis. It is for them not an economic theory. For them it is will I be living out of my car next month?” she said.

Statewide the current rental vacancy rate for all units is 0.5 percent, well below a healthy rental market rate of 5 percent.

Jessica Margeson shared a similar story for tenants. As a housing organizer through Granite State Tenants Association, she has numerous clients state-wide that would benefit from notification of a sale.

One of her tenants was recently evicted after living in a property for 24 years, she said, after the landlord sold the building. This tenant and her husband could have benefited from the chance to offer to purchase the house that had been a long-term home for them, she said.

“It’s giving a family an opportunity, that’s already put down roots the ability to maintain those roots,” she said.

Landlords, however, are more skeptical of the proposal. In a hot housing market, where sales may be offered in instant cash deals, this bill would only provide a delay, said Nick Norman, the director of legislative affairs for the Apartment Association of New Hampshire.

The arduous process of selling a house, including securing inspections and financing could extend this notification period well beyond 60 days.

“We are really not talking about 60 days, more like four months,” he said. “It certainly restricts the owner’s ability to negotiate a sale price. The market is fast.”

If passed, the bill would go into effect beginning January 1, 2024.

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