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.

The District of Columbia Tenant Opportunity to Purchase Act (TOPA) requires that all residential tenants be given the opportunity to purchase their homes before the same can be sold to a third-party purchaser.

Mind you, this does not mean that the tenant must (or should) be provided with an opportunity to purchase without third party contract. Experience teaches that this form should not be used in most circumstances and can cause more headaches than it could resolve (better to negotiate with the tenant if there is a known or suspected interest before beginning to market).

Instead, once a third-party contract is in hand from a purchaser who intends to occupy the property as a personal residence for at least the next twelve months, the best policy is to at the time of contract, work with buyer and seller and complete DCRA form entitled Ninety Day Notice to Vacate for Personal Use and Occupancy of Contract Purchaser.

The seller executes the notice and the purchaser executes the affidavit before a notary, and the two documents must be served upon the tenant by the Seller.

Whenever possible, seek to work with as opposed to against the tenant. More problems arise from sellers all too eager to throw out the baby (tenant) with the bathwater and get to closing as fast as possible.

The problem, however, is that this attitude coupled with the GCAAR Addendum creates a false sense of security that blank forms can be filled in and all can proceed to closing without a care in the world.

The form seeks to impose duties on the title attorney and the buyer to take actions which are either proscribed by D.C. laws and regulations or otherwise remain outside the purview of those groups.

First, a tenant cannot be compelled to surrender his/her rights to purchase and the only person in privity of contract and estate with the tenant is the owner, not the buyer or the title attorney.

Second, there is no magic number to fill in because in the case of a single residential unit, the tenant is entitled to 45 days notice and opportunity to purchase, and only if they do not want to do so must they be provided the aforementioned Ninety Day Notice to Vacate and Affidavit of Personal Use and Occupancy by Contract Purchaser.

As most of you know, most residential mortgages require the purchaser to actually occupy the premises, which means possession at closing, and most loan commitments expire long before the statutory notice periods.
This leaves few palatable choices short of making a voluntary agreement with the tenant (read: payment incentive) to leave early.

Otherwise, experience has taught me that under a best case scenario when suit is filed, it will take several months absent such an agreement to obtain possession from a tenant who does not want to leave.

In short, the Tenancy Addendum to Form 1313 should be avoided and a cautious and measured approach to the situation is suggested.

About the author

Marc S. Moskowitz, a third-generation Washingtonian, has been engaged in the general practice of law in the District of Columbia and Maryland for over twenty years, with special emphasis on real estate disputes in general and landlord and tenant disputes in particular. As a former Hearing Examiner at the Rental Accommodations and Conversion Division of the Department of Consumer and Regulatory Affairs, Marc routinely adjudicated disputes between landlords and tenants and he continues to be appointed by the Superior Court as a mediator and arbitrator to help resolve disputes in that court.

Marc can be reached at 1828 L Street, N.W. Suite 500, Washington, D.C. 20036. His phone number is 202-296-1000, and his email address is MarcSMoskowitz@aol.com.

This information is deemed reliable, but not guaranteed.