The proposed bill, Substitute Bill No. 256, aims to regulate the purchase of residential properties by private equity entities, specifically targeting single-family and two-family residences. It defines a "private equity entity" as an institutional real estate investor or an entity funded by such investors, excluding certain tax-exempt organizations and housing land trusts. The bill establishes that no private equity entity may purchase or acquire these residences unless they have been listed for sale to the general public for at least ninety days. Additionally, if the seller changes the asking price, the ninety-day waiting period restarts.

To ensure compliance, private equity entities must provide a written notice to the seller before finalizing any purchase, confirming their status as a private equity entity and adherence to the waiting period requirement. Violations of these provisions may result in civil damages and penalties up to $250,000, and the Attorney General is authorized to take legal action against non-compliant entities. The bill is set to take effect on October 1, 2026, and introduces new legal language while amending existing statutes to incorporate these regulations.