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The End to the Capitol Hill TOPA Debacle

by Nena Perry-Brown

The End to the Capitol Hill TOPA Debacle: Figure 1
The block on Capitol Hill with the home that Clara initially wanted to purchase.

A month ago, UrbanTurf reported on an extreme example of DC’s Tenant Opportunity to Purchase Act (TOPA), one of DC’s most debated weapons in its arsenal of tenant-friendly housing laws. TOPA allows tenants the right of first refusal, meaning that if their landlord intends to sell the property where the tenant resides, the tenant has the right to either purchase the property first or otherwise assign or sell their right to another person or entity.

When a Capitol Hill house with a tenant in the basement unit went up for sale, Clara was excited to purchase. She went under contract on the home and completed a home inspection when the tenant, Sarah, halted the proceedings with her refusal to sign away her TOPA rights — or sell them to Clara — to allow the sale to move forward. Instead, Sarah opted to engage other buyers, in essence auctioning off her rights to the highest bidder. The listing agent continued to show the property to potential buyers while the sale was still in flux, despite there being no stipulation in the sale contract authorizing continued showings.

The article generated a lot of interest from UrbanTurf readers, and there were strong feelings about whether Sarah was either misusing or acting in accordance with the intent of the law, which was enacted to protect tenants from potentially advantageous landlords and buyers.

UrbanTurf recently learned that Sarah sold her TOPA rights to another party, and the listing agent for the home asked Clara to sign a release from her contract; Clara complied so as to not prolong the legal battle. However, when Clara found another house she was interested in, she and her agent Jacqueline Battistini opted to be more proactive when they put in an offer.

“We [found] her another house, in Capitol Hill, and with another tenant,” Battistini writes. “In this case we stipulated in the contract that we would not perform the home inspection until proof of delivery of TOPA and the signed waiver were approved by our Title agency.” Clara could close on the new house in October.

See other articles related to: topa, tenant rights, right of first refusal, capitol hill

This article originally published at http://dc.urbanturf.com/articles/blog/a_happy_ending_for_all_in_the_topa_debacle/11752

2 Comments

  1. jess wilkie said at 1:23 am on Wednesday October 5, 2016:
    Glad she found a place -- but I wish they would abolish TOPA, or at least revise it for modern times. It's fine to give a tenant a leg up but the outdated time frames for lending etc written into the law give them far too much leverage. It allows them to sabotage a deal even if they have no intention of purchasing. And this, to auction rights to the highest bidder goes way past the spirit of the law, IMO
  1. skidrowedc@gmail.com said at 7:46 pm on Wednesday October 5, 2016:
    I've long thought that the problem with TOPA is that it's almost entirely open-ended, let's-make-a-deal. It's always extremely time-consuming, and it's practically an invitation to strong-arm tactics and greedy behavior by either or both of the tenant(s) and landlord. A related key problem is that there is no differentiation among the rights of different tenants. A person who moved in last month with no particular intention of staying has the same rights as a 30-year resident. What's needed is a formula. Something like, no rights until the 2nd year of tenancy, then a gradated scale for each subsequent year, plateauing at, say, year 10. Based on a percentage of the sale price proportional to the tenant's unit, multiplied by the level of vesting based on length of tenancy, a specific dollar amount would be derived. That would be the buyout price at which the tenant is obligated to leave. There should be an alternative basis, at which the landlord is obligated to keep the tenant--some number of years of no rent increase plus a certain amount of renovations to the unit, etc., again variable based on years of tenancy. Any such formula would have its complications and unevennesses of applicability, but a lot less so than the current TOPA. Done right, it would rebalance the power appropriately and restore a normal pace to sales and projects.

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