Bill Reforms TOPA Process for Single-Family Homes
Posted on June 20, 2017 at 3:44 PM
Bill from Councilmember Nadeau preserves rights of tenants while reducing barriers for single family homeowners
WASHINGTON – Today, Ward 1 D.C. Councilmember Brianne K. Nadeau introduced a bill to promote sales of single family homes by carving out a narrow exemption to the District’s Tenant Opportunity to Purchase Act (TOPA). The bill preserves the rights of tenants while reducing barriers for single family homeowners by preventing the assignment of TOPA rights for single family homes when the landlord maintains the home as their primary residence. The bill is co-sponsored by Councilmembers Grosso, Allen, and Cheh and Chairman Mendelson.
“This bill aims to reduce abuse of the TOPA process by lawyers and development companies targeting single family homes and blocking their sales,” said Councilmember Nadeau. “The TOPA process is a cornerstone of the District’s housing laws, but in the case of single family homes its original intention isn’t always being followed. We’re working to preserve tenants’ rights while making the law workable for single family homeowners.”
Under current District law, the Tenant Opportunity to Purchase Act grants tenants the right of first refusal when their landlord seeks to sell the property. This right applies to large apartment buildings as well as to single family homes. Tenants are also able to assign their right of first refusal to third parties.
The ability to assign the right of first refusal is a powerful tool for tenants to negotiate favorable terms for the sale of the building they live in, but it creates unique problems in single family homes, particularly when that home is occupied as the landlord’s primary residence. The long timeline for exercising TOPA rights creates barriers for homeowners to finalize the sale of their homes since they must first give the tenant an opportunity to purchase. Few tenants in single family homes exercise their TOPA rights, but certain niche law firms and development companies have begun soliciting the sale of TOPA rights, calling it “a $100 million dollar a year business.” In short, developers may preemptively purchase a tenant’s right of first refusal on single family homes and block the homeowner’s otherwise ready-to-go home sale.
This bill would address the problems with TOPA in single family homes by preventing tenants of single family homes from assigning their TOPA rights when the landlord maintains the home as their primary residence. Additionally, the bill makes changes to the timeline for tenants of single family homes to exercise their TOPA rights based on recommendations in a 2006 report by then Mayor Anthony Williams.
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