DC - Tenant’s Opportunity to Purchase Act a.k.a. TOPA

As a settlement attorney in the District of Columbia, the last thing you want to hear for the first time at the settlement table is there are/were tenants in the property being sold.

The Tenant’s Opportunity to Purchase Act (TOPA) is very pro-tenant and is often daunting for agents to tackle as part of a listing or as part of a purchase. Fortunately, there is guidance out there and the shock of the last-minute TOPA issue has become less likely as agents and their clients have become more educated on the process. 

The Greater Capital Area Association of Realtors (GCAAR) has been proactive in getting forms out on its platform to assist agents, such as the Tenancy Addendum for Washington, DC and a TOPA Affidavit that is accepted by most title insurance underwriters.  

The DC Department of Housing and Community Development now provides the Tenant Notice forms online. These forms are very specific as to who is to be given notice, when notice is to be given and how notice is to be given. The forms also specify the timeframes in which all parties – property owners and tenants – are to act. 

It is important to note that giving notice to each of the tenants is not enough in the District of Columbia; you must also give notice to the Mayor c/o District of Columbia Department of Housing and Community Development – Rental Conversion and Sale Division.  

Following directions on these forms is imperative for a successful tenant occupied property sale.

Landlord protection against construction lien claims for tenant improvements

A common, but easily preventable, occurrence for many commercial property owners is having a mechanic's lien filed against their property when their tenant has not paid its contractor and/or their tenant's contractor has failed to pay one of its suppliers, subcontractors or laborers for improvements made to the property by the tenant.

The mechanics lien is a cloud on the property's title and can prevent the sale or refinancing of the property until the mechanic's lien is paid. Often a mechanic's lien for tenant improvements is discovered long after same has been filed in the public records, but by taking a few proactive measures landlord's can ensure that their properties will be protected from the burdens imposed by such mechanic's liens.

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GCAAR Tenancy Addendum no solution to insoluble problem

There is great consternation among Realtors®, title attorneys, buyers and sellers of residential rental property in D.C. and for good reason.

The creation of Tenancy Addendum Form to be used with Form 1313 (enough to cause tristadecaphobics agita) is more curse than blessing. As a litigator of real property disputes in D.C. and Maryland for close to 30 years, use of this form will be a boon to business. Now for the skinny.

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A primer for the sale of DC residential rental property

Selling tenant occupied residential property in the District of Columbia can be a challenging experience filled with potential pitfalls. For the novice and veteran Realtor®, due care must be taken at every step of the process.

When approaching a client for a listing, always inquire as to whether the property is registered with the Department of Consumer and Regulatory Affairs (DCRA), Rental Accommodations and Conversion Division (RACD). All D.C. residential landlords are required to be registered with DCRA and failure to register can result in complaints issued by the Agency or the tenants.

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