TOPA exemption for SFHs in DC - will this create more supply?

[Anonymous]

Yes. I would rent my basement if there weren't a law that made it possible for my tenant to blackmail me at sale. Duh.

[Anonymous]

Help me understand this. I confess it seems crazy to me.

The tenant has first right to purchase. But if I put it on the market for some very high price ($1m over market value), that right isn't very useful. Is the concern that, as soon as I get an offer I accept (which may below list), I have to shop that offer to the tenant, and the tenant has 90 days to match it, and then I would of course lose the buyer? If after 90 days the tenant doesn't come through at the offer price, i can relist--does the tenant have another right to match?

I skimmed the Dc webiste but it jsut says "TOPA is very complex hire a lawyer"

[Anonymous]

That's right. Tenant has 90 days to match (or agree on some other terms with you). If in the meantime the original buyer walks, and the tenant chooses not to match, you're back to square 1.

Esp. problematic if you are doing a Starker exchange, when you only have 180 days to finish the process.

[Anonymous]

Anonymous wrote:

Anonymous wrote:"But if TOPA is removed and the lease is up anyway, what does it matter what the intent was? I can tell you to prepare to vacate in 90 days. My house, I want back for my purposes."

In DC, unlike MD or VA, leases are never "up". You may certainly ask tenants to "vacate in 90 days" if you certify that you want to recover the property for personal use. But if you make such a certification falsely (i.e., having some other intent), that is fraud.

Now, if you remove TOPA, I suppose tenants' incentive to sue for fraud might be slightly lower. But people tend to react badly if they feel they have been treated as suckers... And, if they do sue, it will likely take a year before the case is even heard--and in the meantime you would find it challenging to sell.

What kind of nonsense is that. It's standard to sign a one year lease. Two years at the most. After which it goes month-to-month. So if your 1-year ended in February, you're now on a month-to-month basis which gives me the right to ask you to leave after a month is over. Though I will give the full 90 days as a courtesy.

That's not how it works in DC. When the lease is up and it goes month-to-month, the TENANT has the right to terminate the lease with 30 days notice. The landlord has no such right. The lease continues until there is a violation or a valid reason to end the lease. Personal use and occupancy is one such reason. "I want to sell the house" is not a valid reason. The tenant would be within his rights not to vacate and the court would not agree to evict for that reason. And if you lie and say you want to live there and the house goes on MRIS a few weeks later, the tenant could sue you for wrongful eviction. Even if they didn't have TOPA rights, they had rights as a tenant. The penalties for wrongful eviction can be severe and there are a lot of lawyers who will take these cases on contingency.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"But if TOPA is removed and the lease is up anyway, what does it matter what the intent was? I can tell you to prepare to vacate in 90 days. My house, I want back for my purposes."

In DC, unlike MD or VA, leases are never "up". You may certainly ask tenants to "vacate in 90 days" if you certify that you want to recover the property for personal use. But if you make such a certification falsely (i.e., having some other intent), that is fraud.

Now, if you remove TOPA, I suppose tenants' incentive to sue for fraud might be slightly lower. But people tend to react badly if they feel they have been treated as suckers... And, if they do sue, it will likely take a year before the case is even heard--and in the meantime you would find it challenging to sell.

What kind of nonsense is that. It's standard to sign a one year lease. Two years at the most. After which it goes month-to-month. So if your 1-year ended in February, you're now on a month-to-month basis which gives me the right to ask you to leave after a month is over. Though I will give the full 90 days as a courtesy.

That's not how it works in DC. When the lease is up and it goes month-to-month, the TENANT has the right to terminate the lease with 30 days notice. The landlord has no such right. The lease continues until there is a violation or a valid reason to end the lease. Personal use and occupancy is one such reason. "I want to sell the house" is not a valid reason. The tenant would be within his rights not to vacate and the court would not agree to evict for that reason. And if you lie and say you want to live there and the house goes on MRIS a few weeks later, the tenant could sue you for wrongful eviction. Even if they didn't have TOPA rights, they had rights as a tenant. The penalties for wrongful eviction can be severe and there are a lot of lawyers who will take these cases on contingency.

Okay.

So a) if you repossess the house and kick the tenant out for 'personal use' you just have to wait 12 months to put the home on the market. They can't prove whether or not you were actually living in the house yourself, and b) What if you wanted to increase the rent within normal guidelines - i.e. between 3% - 5% - if the tenant is unwilling to pay, how long before they must leave the premises?

[Anonymous]

NP. So if TOPA is eliminated, an SFH landlord still cannot terminate a lease because they want to sell the property? The tenant has infinite rights to live there? That does indeed seem crazy.

[Anonymous]

I'm the OP of this thread.

Take a look at the "personal use" form that you submit to the DC government and the tenant. There is no mention of restrictions on a sale after reclaiming a property for "personal use." The only restriction is on a landlord accepting rents on the same property for the next 12 month: https://dhcd.dc.gov/sites/default/files/dc/sites/dhcd/publication/attachments/Form%2012%20-%2090%20Day%20Notice%20to%20Vacate%20for%20Personal%20Use%20and%20Occupancy%20Final.pdf

TOPA was the mechanism by which a tenant could sue or make a claim on the property, if the landlord of a SFH tried to sell within 12 months of reclaiming. But that is now eliminated and the tenant appears to only have a tort if the landlord tries to re-rent the residence.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"But if TOPA is removed and the lease is up anyway, what does it matter what the intent was? I can tell you to prepare to vacate in 90 days. My house, I want back for my purposes."

In DC, unlike MD or VA, leases are never "up". You may certainly ask tenants to "vacate in 90 days" if you certify that you want to recover the property for personal use. But if you make such a certification falsely (i.e., having some other intent), that is fraud.

Now, if you remove TOPA, I suppose tenants' incentive to sue for fraud might be slightly lower. But people tend to react badly if they feel they have been treated as suckers... And, if they do sue, it will likely take a year before the case is even heard--and in the meantime you would find it challenging to sell.

What kind of nonsense is that. It's standard to sign a one year lease. Two years at the most. After which it goes month-to-month. So if your 1-year ended in February, you're now on a month-to-month basis which gives me the right to ask you to leave after a month is over. Though I will give the full 90 days as a courtesy.

That's not how it works in DC. When the lease is up and it goes month-to-month, the TENANT has the right to terminate the lease with 30 days notice. The landlord has no such right. The lease continues until there is a violation or a valid reason to end the lease. Personal use and occupancy is one such reason. "I want to sell the house" is not a valid reason. The tenant would be within his rights not to vacate and the court would not agree to evict for that reason. And if you lie and say you want to live there and the house goes on MRIS a few weeks later, the tenant could sue you for wrongful eviction. Even if they didn't have TOPA rights, they had rights as a tenant. The penalties for wrongful eviction can be severe and there are a lot of lawyers who will take these cases on contingency.

Okay.

So a) if you repossess the house and kick the tenant out for 'personal use' you just have to wait 12 months to put the home on the market. They can't prove whether or not you were actually living in the house yourself, and b) What if you wanted to increase the rent within normal guidelines - i.e. between 3% - 5% - if the tenant is unwilling to pay, how long before they must leave the premises?

a) it's hard to prove whether you're living in the house or not, but obviously there could be evidence gathered and presented during a lawsuit. If someone claimed the homestead deduction for living someplace that he didn't live, that's also tax fraud and the government could get involved.

b) it's possible to raise the rent on a month-to-month lease, but how much depends on whether the property is exempt from rent control or not. If not exempt from rent control (and it's only exempt if it meets the guidelines for an exemption AND the owner actually got an exemption from DHCD) then it can only be raised by CPI+2% (or CPI if the tenant is elderly or disabled) though there are situations where a higher increase is allowable, often involving petitioning DHCD.

But if a landlord raises the rent an allowable amount and the tenant doesn't pay, the landlord can start eviction proceedings fairly quickly (how fast depends on whether the lease waives a notice to quit for nonpayment of rent or not, but within a month or two). How long it would take to get the court to allow an eviction depends on lots of factors (does the tenant enter into a payment plan? demand a jury trial? assert defenses like housing code violations?) and then it can take longer to actually carry out the eviction since there are rules about that too. At any point, if the eviction is only about nonpayment of rent, the tenant can pay the full amount he owes and the case goes away.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"But if TOPA is removed and the lease is up anyway, what does it matter what the intent was? I can tell you to prepare to vacate in 90 days. My house, I want back for my purposes."

In DC, unlike MD or VA, leases are never "up". You may certainly ask tenants to "vacate in 90 days" if you certify that you want to recover the property for personal use. But if you make such a certification falsely (i.e., having some other intent), that is fraud.

Now, if you remove TOPA, I suppose tenants' incentive to sue for fraud might be slightly lower. But people tend to react badly if they feel they have been treated as suckers... And, if they do sue, it will likely take a year before the case is even heard--and in the meantime you would find it challenging to sell.

What kind of nonsense is that. It's standard to sign a one year lease. Two years at the most. After which it goes month-to-month. So if your 1-year ended in February, you're now on a month-to-month basis which gives me the right to ask you to leave after a month is over. Though I will give the full 90 days as a courtesy.

That's not how it works in DC. When the lease is up and it goes month-to-month, the TENANT has the right to terminate the lease with 30 days notice. The landlord has no such right. The lease continues until there is a violation or a valid reason to end the lease. Personal use and occupancy is one such reason. "I want to sell the house" is not a valid reason. The tenant would be within his rights not to vacate and the court would not agree to evict for that reason. And if you lie and say you want to live there and the house goes on MRIS a few weeks later, the tenant could sue you for wrongful eviction. Even if they didn't have TOPA rights, they had rights as a tenant. The penalties for wrongful eviction can be severe and there are a lot of lawyers who will take these cases on contingency.

Okay.

So a) if you repossess the house and kick the tenant out for 'personal use' you just have to wait 12 months to put the home on the market. They can't prove whether or not you were actually living in the house yourself, and b) What if you wanted to increase the rent within normal guidelines - i.e. between 3% - 5% - if the tenant is unwilling to pay, how long before they must leave the premises?

a) it's hard to prove whether you're living in the house or not, but obviously there could be evidence gathered and presented during a lawsuit. If someone claimed the homestead deduction for living someplace that he didn't live, that's also tax fraud and the government could get involved.

b) it's possible to raise the rent on a month-to-month lease, but how much depends on whether the property is exempt from rent control or not. If not exempt from rent control (and it's only exempt if it meets the guidelines for an exemption AND the owner actually got an exemption from DHCD) then it can only be raised by CPI+2% (or CPI if the tenant is elderly or disabled) though there are situations where a higher increase is allowable, often involving petitioning DHCD.

But if a landlord raises the rent an allowable amount and the tenant doesn't pay, the landlord can start eviction proceedings fairly quickly (how fast depends on whether the lease waives a notice to quit for nonpayment of rent or not, but within a month or two). How long it would take to get the court to allow an eviction depends on lots of factors (does the tenant enter into a payment plan? demand a jury trial? assert defenses like housing code violations?) and then it can take longer to actually carry out the eviction since there are rules about that too. At any point, if the eviction is only about nonpayment of rent, the tenant can pay the full amount he owes and the case goes away.

Thank you - very helpful!

[Anonymous]

Anonymous wrote:NP. So if TOPA is eliminated, an SFH landlord still cannot terminate a lease because they want to sell the property? The tenant has infinite rights to live there? That does indeed seem crazy.

The lease survives the sale. If the new owner wants to live there, she can give the tenant 90 days notice and then personally occupy it. And if the new owner wants to rent it out, it would be to the current tenant until that tenancy ends.

[Anonymous]

Anonymous wrote:I'm the OP of this thread.

Take a look at the "personal use" form that you submit to the DC government and the tenant. There is no mention of restrictions on a sale after reclaiming a property for "personal use." The only restriction is on a landlord accepting rents on the same property for the next 12 month: https://dhcd.dc.gov/sites/default/files/dc/sites/dhcd/publication/attachments/Form%2012%20-%2090%20Day%20Notice%20to%20Vacate%20for%20Personal%20Use%20and%20Occupancy%20Final.pdf

TOPA was the mechanism by which a tenant could sue or make a claim on the property, if the landlord of a SFH tried to sell within 12 months of reclaiming. But that is now eliminated and the tenant appears to only have a tort if the landlord tries to re-rent the residence.

If a landlord serves this notice on a tenant, moves in for a couple days, then puts the house on the market and the tenant sues for wrongful eviction, I am not sure what the DC courts would hold. But I could definitely imagine a tenants' lawyer wanting to take on that case for a chance of a percentage of the damages (which could be treble damages if the landlord is found to have acted in bad faith). At the very least, there could be a lot of legal fees for the homeowner and there could be discovery, depositions of the realtor and other people who were involved in putting the house on the market, a full-blown trial, an appeal to the Court of Appeals, etc.

[Anonymous]

Anonymous wrote:I'm the OP of this thread.

Take a look at the "personal use" form that you submit to the DC government and the tenant. There is no mention of restrictions on a sale after reclaiming a property for "personal use." The only restriction is on a landlord accepting rents on the same property for the next 12 month: https://dhcd.dc.gov/sites/default/files/dc/sites/dhcd/publication/attachments/Form%2012%20-%2090%20Day%20Notice%20to%20Vacate%20for%20Personal%20Use%20and%20Occupancy%20Final.pdf

Indeed, I reclaimed a house for my personal use, and after 8 months I put it on the market. No problem--just had to prove to the title insurance company that I had actually lived there after evicting the tenant. Now, if I had only lived there for a day, I imagine there could have been problems...

[Anonymous]

I would hold off on selling until this: https://www.economist.com/news/united-states/21738404-federal-government-big-client-web-giant-it-make-sense-amazon-build

[Anonymous]

Here’s a new wrinkle for you all to weigh in on. We have two family home (row house w legal basement), currently rented, planning to reclaim for personal use soon and move back in so we can sell TOPA-free in a year potentially. Can we cancel our two family license, or take some other step to become SFH, so we could take advantage of new law and sell sooner? Would we still have our two unit C of O, which is handy for resale purposes?

[Anonymous]

Anonymous wrote:Here’s a new wrinkle for you all to weigh in on. We have two family home (row house w legal basement), currently rented, planning to reclaim for personal use soon and move back in so we can sell TOPA-free in a year potentially. Can we cancel our two family license, or take some other step to become SFH, so we could take advantage of new law and sell sooner? Would we still have our two unit C of O, which is handy for resale purposes?

Is it? We recently purchased our rowhouse, which has an english basement apartment without a C of O. My lender told me that if our house was 2 legit legal units, they would have required a minimum 20% downpayment (we had only 10%).

So I think you may be eliminating a sizable segment of the population who don't have 20%.