In a move landlords and Realtors will likely praise, Ward 1 D.C. Councilmember Brianne Nadeau proposed a bill Tuesday that would restrict certain situations from a longstanding tenant-friendly law.
The legislation is meant to exempt single-family homes that owners use as their primary residences from part of D.C.’s Tenant Opportunity to Purchase Act, a 1980 law that provides tenants the right of first refusal when the homes where they live go up for sale. In practice, that means a home’s current tenant must be notified of a pending sale and has a shot to place their own offer on the home. TOPA, as the law is known, also lets tenants assign—or effectively sell—this right to interested third-party buyers.
The bill would not entirely eliminate TOPA rights for tenants of single-family homes, but it would prohibit such tenants from signing away these rights to other parties. Critics of TOPA say tenants are able to delay or derail otherwise legal transfers of small properties by not foregoing their assignment rights. In the process, tenants can leverage their rights for several thousand or tens of thousands of dollars.
TOPA was passed to prevent tenants, particularly of multifamily apartment complexes, from being displaced at a landlord’s whim. But in recent years, some attorneys and developers have figured out that under the letter of the law, tenants of single-family homes where landlords also reside can block sales that have been lined up for those homes. In some instances, tenants have even auctioned their TOPA rights to outside purchasers, torpedoing expected deals. In other cases, Nadeau’s office says in a release, developers may preemptively buy tenants’ right of first refusal and frustrate future sales.
“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,” Nadeau says in a statement that notes a “niche” of TOPA-focused attorneys and development firms. (NBC4 reported on these firms last month.) “We’re working to preserve tenants’ rights while making the law workable for single-family homeowners.”
The bill would also shorten the window in which tenants of single-family homes can act on their right of first refusal to buy their landlord’s property. It may score Nadeau some re-election points within the local real estate community. Former D.C. Superior Court Magistrate Judge Lori E. Parker announced earlier this week that she intends to challenge Nadeau in the 2018 D.C. Council election for Ward 1.
Councilmembers David Grosso, Charles Allen, and Mary Cheh, as well as Council Chairman Phil Mendelson, have co-sponsored Nadeau’s legislation. A public hearing on the bill still has to be scheduled.
The proposal follows a similar one floated in June by At-Large Councilmember Anita Bonds that would carve out accessory dwelling units within owner-occupied single-family homes from TOPA.
Colin Johnson, president of the D.C. Association of Realtors, says his group supports the passage of both proposals. “[TOPA] itself has unintended consequences, and we’re happy that the council is finally trying to address these concerns,” he says. A hearing on Bonds’ bill is scheduled for July 13.
This was not the only legislation Nadeau introduced on Tuesday. She also submitted a proposal that would allow residents to identify as gender non-binary on Department of Motor Vehicles documents.