TOPA IN WASHINGTON DC

The Tenant Opportunity to Purchase Act, or TOPA, affords tenants unique rights in the District of Columbia. Familiarize yourself with them whether you’re a buyer or seller. The home owner and landlord must comply with all TOPA laws and provide tenants with appropriate disclosures when applicable. The DC Department of Housing and Community Development offers Tenant Notice forms online. They designate whom is to be given notice, when notice must be given and how notice is to be given. The forms also specify the timeframes for all parties. Giving notice to each tenants (even those without a formal lease) is not sufficient. Landlords must also give notice to the Mayor c/o District of Columbia Department of Housing and Community Development – Rental Conversion and Sale Division.

DC TOPA Legislative Updates
2018 TOPA Reform

TOPA EXEMPTION LAW: Once Mayor Muriel Bower signs the legislation, all “single-family accommodations” will be exempt from the tenant’s right of first refusal, including:

  • Single-family dwellings
  • Single-family dwellings with accessory dwelling units
  • Condominiums, co-ops, or other dwelling units in a homeowners association.

Tenants of 2-4 unit properties retain their TOPA rights. 

The bill “grandfathers” elderly and disabled tenants. Following receipt of a TOPA notice, eligible tenants:

  • Have 20 days to provide a statement of interest to the city and the property owner;
  • Have 25 days to negotiate a contract;
  • Have 45 days to settle, with a 30 day extension option if a lending institution submits a written statement that financing will take 75 days.

In these cases, the bill removes the “restart” provision that resets the TOPA timeframe if 180 days lapse from the date of offer without a sale being effected. “Grandfathered” tenants can no longer assign rights to a third party. They can, however, be  permitted to remain in their unit at the current rental rate for an additional 12 months following the sale of the property.

DC TOPA Rules, Regulations And Procedures
  • Single-family homes: If a tenant lives in a single-family home, including a condominium or cooperative apartment, the tenant has 30 days from the time the offer is received to advise the landlord that he is interested in buying the property. If a statement of interest is presented in writing to the landlord, the tenant then has an additional 60 days to negotiate a contract with the owner of the property. If a contract is entered into, the tenant has to settle 60 days thereafter. However, if a mortgage lender needs additional time in which to process the loan and provides a written statement to the owner the tenant has an additional 30 days in which to go to closing. Two to four-unit buildings: The landlord/seller must make an offer to all tenants, who then have 15 days in which to jointly state their interest in purchasing. If, within 15 days, the joint tenants do not provide a written statement of interest, any single tenant may issue an individual statement of interest. Seven additional days are then given to the tenant to advise the landlord. Once a statement has been delivered in either case, an additional 90-day period begins so that a contract can be negotiated. If negotiations fail, the landlord/owner must provide an additional 30 days for any one of the current tenants to enter into a purchase and sales contract. If a contract is effected, an additional 90 days is given for settlement plus an extension of 30 days if required by lender. Total: 232 days if the rights aren’t sold to another. Five or more unit buildings: If the building contains more than four rental units, TOPA makes it clear that only a valid tenant association has the right to take advantage of the law when this property is sold. DC TOPA says landlords (sellers) must provide tenants with a copy of the offer of sale, either prior to contract ratification, or afterward. The copy of offer of sale must include the following, among other items: Asking price Statement attesting to the existence of a third-party contract Statement affirming that the landlord/seller will make pertinent information about the property (including building floorplan if one exists) Operating expense statement. Tenants have the absolute right to sell or assign their rights to another third party.
  • Two to four-unit buildings: The landlord/seller must make an offer to all tenants, who then have 15 days in which to jointly state their interest in purchasing. If, within 15 days, the joint tenants do not provide a written statement of interest, any single tenant may issue an individual statement of interest. Seven additional days are then given to the tenant to advise the landlord. Once a statement has been delivered in either case, an additional 90-day period begins so that a contract can be negotiated. If negotiations fail, the landlord/owner must provide an additional 30 days for any one of the current tenants to enter into a purchase and sales contract. If a contract is effected, an additional 90 days is given for settlement plus an extension of 30 days if required by lender. Total: 232 days if the rights aren’t sold to another.
  • Five or more unit buildings: If the building contains more than four rental units, TOPA makes it clear that only a valid tenant association has the right to take advantage of the law when this property is sold. DC TOPA says landlords (sellers) must provide tenants with a copy of the offer of sale, either prior to contract ratification, or afterward. The copy of offer of sale must include the following, among other items: Asking price Statement attesting to the existence of a third-party contract Statement affirming that the landlord/seller will make pertinent information about the property (including building floorplan if one exists) Operating expense statement. Tenants have the absolute right to sell or assign their rights to another third party.
Right Of First Refusal

No matter the size of the building or a tenant (or tenants) expression of a lack of desire or ability to purchase, the law provides the tenants with an absolute 15-day right of first refusal.  Right of First Refusal can not be waived.  If the tenant can match the contract from the third party, the tenants have the right to purchase. The clock does not begin to run on this until all the other time dictated by the law has expired. This is a complex issue with many legal ramifications, so consultation with a real estate attorney is recommended.  DC’s Department of Consumer and Regulatory Affairs (DCRA) offers the following forms at Room 7238, 941 North Capitol Street, NE.: Offer of Sale & Tenant Opportunity to Purchase with a Third party contract Offer of Sale & Tenant Opportunity to Purchase without a Third party contract. Once the landlord has been notified, the tenant corporation has 120 days in which to negotiate a sales contract. If there is a contract, the corporation has 120 days from the date of the contract in which to go to settlement. Again, if a lender provides a written statement that it needs more time, the landlord/owner must give the tenants up to an additional 120 days in which to close on the property. It must be noted that if there are five or more rental units in the property, only the tenant corporation has the right to speak — and negotiate — on behalf of all the tenants. Tenants who do not join the tenant corporation will not be able to participate in any of the benefits which the tenant association may obtain through its negotiations.

2009 Updates To TOPA
DHCD Completes New DC TOPA Forms – November 2009 The District’s Department of Housing and Community Development’s Housing Regulation Administration – Rental Conversion and Sale Division has released forms for the Tenant Opportunity to Purchase Act (TOPA) to reflect recent changes in the law. Some of the key changes the forms address are: The owners must give DHCD a certification that they mailed the offer of sale to tenants the same time that they sent it to DHCD; The owners must send the offer by certified mail to the tenant and to DHCD by certified mail or hand delivery; In regards to time calculation (i.e. tenant’s 30 days to respond), the time period begins upon either the tenant’s or DHCD’s receipt of the offer of sale (whichever is later). PLEASE NOTE: The District has only completed the above-mentioned forms in English. If you have a tenant where the head of household is Spanish speaking, or you are providing TOPA Notices in a multi-unit building, you should use both the new English language form and the old Spanish Translation form. On the old Spanish form, settlement attorneys are strongly suggesting the appropriate address of DHCD’s Rental and Conversion Sale Division be included.   –GCAAR 
 
More on DC TOPA from Federal Title  TOPA may be periodically updated so be sure to check the most current regulations. Ask an expert about timeframes for tenants who have vacated. *This information is a general overview of the subject and is not guaranteed accurate. Please refer to the appropriate government agency for a full understanding of the law and procedure.
2017 TOPA Reform Bill
On March 6th, the D.C. Council voted to exempt single-family homes from the Tenant Opportunity to Purchase Act (TOPA). The 39 year-old bill was originally designed to convert renters to owners by giving them right of first refusal if their dwelling listed for sale. But over the past decade, TOPA has come under fire as “legalized blackmail” since tenants began using the law to leverage payouts from sellers or stop sales altogether. The charge for reform was led by DC Council Chairman Phil Mendelson and At-Large Councilmember Anita Bonds, who say TOPA wasn’t intended to include protections for single family homes and that “bad actors” have used the law to drag out the sale of a home by indicating they plan on purchasing it, only to renege at the last minute. This tactic forces sellers into payouts that sometimes reach tens of thousands of dollars, or forces the property off-market, costing homeowners and realtors hundreds of thousands of dollars annually. Opponents contend that the Council’s bill is the “biggest rollback of tenants’ rights in a decade.”
In 2017, Ward 1 Councilmembers Anita Bonds and Brianne Nadeau each proposed bills restricting TOPA. Bonds’ bill, TOPA Accessory Dwelling Unit Amendment Act, exempts a dwelling’s rental portion such as a basement apartment, from the law if it consists of less than a third of the total square footage and the dwelling is owner-occupied. This bill shortens deadlines associated with TOPA. Nadeau’s Home Sale Facilitation Amendment Act, prevents tenants in owner-occupied single-family dwellings from selling or assigning their TOPA rights. This bill also shortens TOPA deadlines for single-family homes.
 
September 22, 2017: The DC Council hearing on TOPA reform was attended by nearly 200 people on September 21 2017, and about 25 testified to the Committee on Housing and Neighborhood Revitalization. Council Chairman Phil Mendelson said that, while he continues to be an advocate for tenant rights, there were a number of TOPA issues that would not be remedied by newly proposed legislation and he stated his support for a full TOPA exemption for all single-family homes, eliciting a standing ovation. Many D.C. homeowners have recounted stories that include exploitation of the law by short-term tenants and attorneys profiting from tenant leveraging. A “Fix TOPA” website was launched to document TOPA horror stories. Next steps included markup of the bills, a Council vote, then a 30 day U.S. Congress review.
TOPA Tenant Notice Forms

Always check with your title company before selecting forms, to confirm the type of form needed.

For more information on DC TOPA, contact the Department of Housing and Community Development (DHCD)

D.C. Department of Housing and Community Development

Housing Regulation Administration

Rental Conversion and Sale Division

1800 Martin Luther King, Jr. Avenue, S.E.

Washington, D.C. 20020

p (202) 442-9505 | f (202) 645-5870

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