Tex. Gov't Code Ann. §§ 2306.185, 2306.186, 2306.269, 2306.358, 2306.6702, 2306.6713, 2306.6720, 2306.6722, 2306.6726, 2306.6728, 2306.6730, 2306.6735, 2306.6738, 2306.851–2306.853, 2306.921–2306.940 § 2306.6726
SALE OF CERTAIN LOW INCOME HOUSING TAX CREDIT DEVELOPMENTS.
Operative Text
Sec. 2306.6726. SALE OF CERTAIN LOW INCOME HOUSING TAX CREDIT DEVELOPMENTS. (a) An owner of a development subject to a right of first refusal under Section 2306.6725 who intends to sell the development at any time after the expiration of the compliance period shall notify the department and the tenants of the development of the owner's intent to sell and, if applicable, shall specifically identify to the department any qualified entity that is the owner's intended recipient of the right of first refusal in the land use restriction agreement.(a-1) As soon as practicable after receiving notice under Subsection (a), the department shall:(1) provide to any qualified entity specifically identified under Subsection (a) notice regarding the owner's intent to sell the development; and(2) post on the department's Internet website the notice described by Subdivision (1).(b) The owner of a development subject to a right of first refusal under Section 2306.6725 may:(1) during the first 60-day period after notice is provided under Subsection (a-1), negotiate or enter into a purchase agreement only with a qualified entity that is:(A) a community housing development organization as defined by the federal HOME investment partnership program;(B) if the authority or the corporation owns the fee title to the development owner's leasehold estate:(i) a public housing authority; or(ii) a public facility corporation created by a public housing authority under Chapter 303, Local Government Code; or(C) controlled by an entity described by Paragraph (A) or (B);(2) during the second 60-day period after notice is provided under Subsection (a-1), negotiate or enter into a purchase agreement with a qualified entity that:(A) is described by Section 2306.6706;(B) is controlled by an entity described by Paragraph (A); or(C) is a tenant organization; and(3) during the last 60-day period after notice is provided under Subsection (a-1), negotiate or enter into a purchase agreement with any other qualified entity.(c) Beginning on the 181st day after the date the department posts notice under Subsection (a-1), an owner of a development subject to a right of first refusal under Section 2306.6725 may sell to any purchaser a development to which the right of first refusal applies if a qualified entity does not offer to purchase the development for a price that the department determines to be reasonable.(c-1) This section applies only to a right of first refusal memorialized in a land use restriction agreement. This section does not authorize a modification of any other agreement between an owner of a development and a qualified entity. (c-2) The department shall adopt rules and procedures to give effect to the right of first refusal granted by any land use restriction agreement.(d) In this section:(1) "Compliance period" has the meaning assigned by Section 42(i)(1), Internal Revenue Code of 1986 (26 U.S.C. Section 42(i)(1)).(2) "Qualified entity" means an entity described by, or an entity controlled by an entity described by, Section 42(i)(7)(A), Internal Revenue Code of 1986 (26 U.S.C. Section 42(i)(7)(A)). Added by Acts 1997, 75th Leg., ch. 980, Sec. 49, eff. Sept. 1, 1997. Renumbered from Sec. 2306.673 and amended by Acts 2001, 77th Leg., ch. 1367, Sec. 8.01, eff. Sept. 1, 2001.Amended by: Acts 2015, 84th Leg., R.S., Ch. 817 (H.B. 3576), Sec. 5, eff. September 1, 2015.Acts 2021, 87th Leg., R.S., Ch. 841 (S.B. 403), Sec. 1, eff. September 1, 2021.
Texas Government Code § 2306.6726 establishes a structured, time-limited process that governs how owners of certain Low Income Housing Tax Credit (LIHTC) developments may sell their properties after the federal compliance period ends. Before selling, the owner must notify both the Texas Department of Housing and Community Affairs (TDHCA) and the development's tenants of the intent to sell. The law then creates three sequential 60-day windows during which the owner may only negotiate with progressively broader categories of qualified nonprofit or public entities, before opening the sale to any purchaser on the 181st day if no qualified entity has made a reasonable offer.
Plain English — not legal advice.
Owners of LIHTC developments covered by a right of first refusal under § 2306.6725 generally provide written notice of intent to sell to both TDHCA and current tenants before initiating any sale process. Compliant operators track the three sequential 60-day negotiating windows established by § 2306.6726(b), ensuring that purchase agreement negotiations are limited to the appropriate category of qualified entity during each period. Operators also review the land use restriction agreement carefully, since § 2306.6726(c-1) clarifies that this statutory process applies only to rights of first refusal memorialized in that agreement and does not override other contractual arrangements.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under § 2306.6726, tenants of covered LIHTC developments have a right to receive notice when an owner intends to sell, giving residents an early opportunity to understand that a change in ownership may be coming. The law's sequential negotiating windows prioritize community housing development organizations, public housing authorities, and tenant organizations before the property can be sold to an unrestricted buyer, which can be relevant to tenants interested in organized participation in the purchase process. Tenants who believe proper notice was not provided or that the process was not followed may consider contacting TDHCA directly, reaching out to a local tenant-rights organization, or consulting an attorney familiar with Texas affordable housing law.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 28, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
Effective Timeline
References Out
Rules and statutes cited by this regulation
References In
Rules and statutes that cite this regulation