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New Law Would Free DC Single-Family Homeowners from Certain Selling Requirements

Single-family home owners in the District of Columbia may soon no longer have to notify their tenants of intention to sell under the new Single-Family Home Exemption Amendment Act of 2018.

For the last several decades, residential property owners in DC have been subject to the Tenant’s Opportunity to Purchase Act (TOPA). Under TOPA, all owners of residential property (including condominiums, co-operatives, and single-family homes) who leased some or all of their property had been required to notify tenants of their intention to sell it and provide a corresponding right of first refusal to purchase on the same terms as the property been offered by a prospective buyer.

Although the notification periods and processes vary depending on the number of dwelling units in the property, even owners of single-family homes or condominiums who rent out portion(s) of their home were subject to compliance with TOPA.

However, the Single-Family Home Exemption Amendment Act (Act), which has been passed by the DC Council and is slated to go into effect in the coming weeks, will ease this burden on single-family homeowners. Under the Act, within three days of receiving or soliciting an offer to purchase a single-family housing accommodation, a property owner must notify the tenant of the offer. This notification essentially serves as a “heads up” allowing the tenant to plan but does not trigger any rights for the tenant. The only exception is for those who are considered “elderly” or “disabled” under the Act.

If the tenant is elderly or disabled, then upon receipt of the notice, the tenant has 20 days to deliver a written statement of interest to the owner. Failure to deliver this statement constitutes a waiver of the tenant’s TOPA rights. If the tenant provides the required statement of interest to the property owner, the tenant then has 25 days to negotiate a final contract and 45 days to close after the final contract is executed. These qualifying tenants are permitted to assign their rights, but only for the right to immediately occupy the tenant’s unit for a period of 12 months following the sale at the rate of rent charged as of the date of the original offer of sale. This differs dramatically from the current law, which permits all tenants to assign or sell their TOPA rights for any kind of consideration.

In sum, TOPA will still apply as currently constituted (with some minor exceptions related to administrative compliance with notice delivery requirements) for all owners of residential property containing more than one dwelling unit. But, lessors of single-family homes and condo units in the District will be exempt from the law and will be able to freely convey their properties without the burden of complying with TOPA unless they have an existing tenant who is elderly or disabled. Even then, the timelines for compliance have been reduced to allow for a quicker disposition to a non-tenant.

Lance Kodish a real estate attorney well-versed in TOPA and accompanying issues. For more information, contact him at 301-657-0152 or lmkodish@lerchearly.com.

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