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

[Anonymous]

We are now strongly considering selling our rental rowhouse in core DC that we bought for a song 15 years ago. We've always been able to find decent tenants and get a good rent price, so the TOPA headache contributed to our inertia in selling the house. But now that TOPA looks to be eliminated in about 45 days and with interest rates rising, we are very likely to pull the trigger and make a couple hundred thousand dollars in profit.

I predict we may see a mini surge of sales over the otherwise quiet summer months. I expect other landlords to issue the 90 day notice to tenants right after the TOPA legislation is signed and houses will hit the market in August and September.

Anyone else considering a similar course of action?

[Anonymous]

What do you mean "issue the 90 day notice to tenants"? Just because TOPA may be abolished doesn't mean you will be able to arbitrarily terminate leases... Only the new owners will be able to do that, and only if they certify they want to recover the property for personal use.

[Anonymous]

As long as the lease term is over or the tenant is now on month-to-month why shouldn't they be able to do precisely that? This is good news for D.C. homeowners, I personally was terrified of TOPA - no more!

[Anonymous]

Anonymous wrote:What do you mean "issue the 90 day notice to tenants"? Just because TOPA may be abolished doesn't mean you will be able to arbitrarily terminate leases... Only the new owners will be able to do that, and only if they certify they want to recover the property for personal use.

OP here:
Owners of a SFH can have always been able to issue a 90 day notice that they will reclaim the property for "personal use." This is a perfectly valid reason for legal eviction under DC law.

The issue with doing this in previous years is that the TOPA right remained with the tenants until 12 months after being legally evicted by a home owner. The home owner couldn't sell or rent the property within the 12 month time span of reclaiming the house for personal use.

But with under the new legislation, the TOPA rights are extinguished for the previous tenants since SFHs would be exempt from TOPA. Therefore, the next day after I reclaim the property, I can conceivably put it up for sale. This seems to be perfectly legal.

If the TOPA change goes into effect in late April, I would give the 90 day notice immediately. Then I basically just wait out the clock until the summer to reclaim my house, prep it for market, and put it up for sale in September.

[Anonymous]

1. In DC, if a tenant is on a month-to-month lease, that means THE TENANT can terminate the lease with 1 month's notice. The owner still needs to appeal to a legally valid reason (e.g., personal use) to terminate the lease.

2. If I were your tenant, you evicted me by claiming personal use, and the day after you put the house up for sale, I would sue you for fraud. You would have to show that something happened that could plausibly have made you change your mind about personal use...

Bottom line: a desire to sell a house is not a legally valid reason to terminate a lease. You would still have to sell the house with the tenant in it. Of course, since they no longer have TOPA rights, that might not be such a hassle.

[Anonymous]

Anonymous wrote:1. In DC, if a tenant is on a month-to-month lease, that means THE TENANT can terminate the lease with 1 month's notice. The owner still needs to appeal to a legally valid reason (e.g., personal use) to terminate the lease.

2. If I were your tenant, you evicted me by claiming personal use, and the day after you put the house up for sale, I would sue you for fraud. You would have to show that something happened that could plausibly have made you change your mind about personal use...

Bottom line: a desire to sell a house is not a legally valid reason to terminate a lease. You would still have to sell the house with the tenant in it. Of course, since they no longer have TOPA rights, that might not be such a hassle.

Fraud? TOPA was your leverage and now that’s gone. That’s how you were able to previously sue because you had a statutory right to the first bite of the apple.

In practical terms, I’d probably need 4-8 weeks to get the house in order for the market. So that’s “personal use” for a month or two and then I go to sell.

I don’t see how this would be legal, given the proposed legislation. I’d need to read the statute text closely.

[Anonymous]

Anonymous wrote:

Anonymous wrote:1. In DC, if a tenant is on a month-to-month lease, that means THE TENANT can terminate the lease with 1 month's notice. The owner still needs to appeal to a legally valid reason (e.g., personal use) to terminate the lease.

2. If I were your tenant, you evicted me by claiming personal use, and the day after you put the house up for sale, I would sue you for fraud. You would have to show that something happened that could plausibly have made you change your mind about personal use...

Bottom line: a desire to sell a house is not a legally valid reason to terminate a lease. You would still have to sell the house with the tenant in it. Of course, since they no longer have TOPA rights, that might not be such a hassle.

Fraud? TOPA was your leverage and now that’s gone. That’s how you were able to previously sue because you had a statutory right to the first bite of the apple.

In practical terms, I’d probably need 4-8 weeks to get the house in order for the market. So that’s “personal use” for a month or two and then I go to sell.

I don’t see how this would be legal, given the proposed legislation. I’d need to read the statute text closely.

Edit - “I don’t see how this is ILLEGAL...”

[Anonymous]

The issue has nothing to do with TOPA. The fraud would be claiming that you want to recover the house for personal use, if you are in fact all along planning to sell (or re-rent within 12 months). Obviously, determining intent may be difficult--but not if you move back in and immediately start preparing the house for sale...

[Anonymous]

Anonymous wrote:The issue has nothing to do with TOPA. The fraud would be claiming that you want to recover the house for personal use, if you are in fact all along planning to sell (or re-rent within 12 months). Obviously, determining intent may be difficult--but not if you move back in and immediately start preparing the house for sale...

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.

[Anonymous]

"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.

[Anonymous]

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.

[Anonymous]

"What kind of nonsense is that."

It may well be nonsense. It also happens to be the law in DC. And while landlords may not know the law, I assure you that most of my tenants have displayed a remarkably good grasp of it...

[Anonymous]

Anonymous wrote:"What kind of nonsense is that."

It may well be nonsense. It also happens to be the law in DC. And while landlords may not know the law, I assure you that most of my tenants have displayed a remarkably good grasp of it...

Maybe the D.C. council is signaling that they are looking to ease these onerous restrictions? Not initiating AirBnB laws for SFHs was step one. Step two was removing TOPA rights for SFHs (at least now I don't have to bribe someone in order to sell my own property). Step three could be something else.

[Anonymous]

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.

Without TOPA, I honestly think tenants are up a creek without a paddle if I go to sell after a nominal waiting period. Even if they sue, they no longer have a right to the home or to hold up the sale; what’s the tort? What damages can they claim aside from moving costs? At that point, you’re in small claims court.

The only way I can see tenants having a viable case is if the landlord reclaims the property and posts it on Airbnb or re-rents it at a higher rate within the 12 month waiting period. But that has always been an illegal eviction and has nothing to do with TOPA, which is clearly designed for PURCHASE of the property (hence the “P” in TOPA).

Plus, I think intent will be impossible to prove. The landlord can always say that they renovated assuming to move in but then decided the commute was a hassle/didn’t like the schools/etc. I don’t envision many attorneys representing tenants without a hefty retainer.

[Anonymous]

Ps - I think you can easily see why the DC real estate industry was so eagerly backing this - they expect a lot of turnover as folks exit their investments. The potential for fee income is huge.