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Legal Representation

To successfully complete the Tenant Purchase process, a number of complex legal hurdles must be cleared. The tenant association needs an attorney who can help it to navigate the many legal issues that arise during the development process. It is important that the tenant groups remember that the attorney is working for them and that it is in the group’s best interest as the client, to hold the attorney accountable. Whether the tenant association’s choice of legal representation is a pro-bono attorney or a traditional fee for service attorney, it is critical that the Board of Directors understands the role of the attorney, as well as the factors important in selecting the right legal representation.

Attorney’s Responsibilities

The attorney plays a number of important roles and is crucial to:
1) Negotiating the purchase of land or an existing multi-family building
2) Negotiating and drafting contracts between the tenant association and the development team
3) Reviewing and negotiating loan documents
4) Explaining the legal structure and requirements of the tenant association as it relates to Tenant Purchase
5) Providing legal guidance to the tenant association as it navigates the difficult process of Tenant Purchase

Attorney Selection Criteria

The four primary considerations in selecting an attorney are:


Expertise refers to the experience and skill the attorney will bring to the development process. Among the other skills that may be needed are negotiation and resident education. Areas of knowledge required should include cooperative experience, tenant statutory rights, real estate contracts, partnership and non-profit corporate structure, conversion of ownership form from landlord to cooperative ownership, tax implications, financing, and the structure and management of cooperatives.  Specialized issues involving cooperative structure, tax questions, syndication scenarios or litigation may arise, requiring the expertise of separate specialty attorneys.


The attorney should have the flexibility to work in non-traditional ways. The attorney will need to spend time patiently responding to questions at night or weekend meetings. Creativity may be needed to solve financing problems or resolve conflicts within the tenant association. The attorney must be accessible – willing to return phone calls promptly and available to answer questions and deal with problems as they arise.


Capacity in this example refers to an attorney’s time and supporting resources such as office staff, etc. An attorney may have the needed experience end expertise but not have the time to commit to a new project.  A less experienced attorney on the other hand could have sufficient time to learn new subjects with the help of another more experienced attorneys in order to do a competent job.

Fee Structure

Attorney fees can be a significant part of Tenant Purchase projects total cost and fee structures can differ.  The two models are hourly and contingency.  In an hourly structure -which is more traditional- you pay the attorney based upon an hourly fee.  In a contingency structure the attorney takes a percentage share of the total development cost as a fee.  Typically attorneys working under an hourly fee structures are far less expensive, and many of them will defer payment for a large part of their fees until permanent financing. 

A Special Note on Choosing Wisely

It is not advisable to give preferential consideration to an attorney because they are a building resident, a friend or are a relative.  In our experiences all legal services contracts should be conducted at arms length in order to avoid real or perceived conflicts of interest.