What the TOPA? 3 Options DC Home Owners Should Know

An old affordable housing law called TOPA is preventing some DC homeowners from selling their home. TOPA, otherwise known as Tenant Opportunity to Purchase Act, was established in the early 1980’s to ensure renters could not be displaced from their home and had first rights to purchase the home, should the owner decide to sell. 

But now- some clever renters have been able to hold properties hostage by selling their rights to the highest paying bidder, to put major cash in their pocket – yes the renter’s pocket! Some DC homeowners had to pay their tenants, upwards of tens of thousands of dollars, to release their TOPA rights so the home could be sold – practically extortion. Local real estate attorneyJohn E. Reidis a TOPA expert and suggested 3 options DC homeowners should know about renting their property.

1. You must comply with TOPA law. Meaning you must give your tenant, in writing via certified mail, an opportunity to purchase the property if you decide to sell it. A copy of this notice must be sent to the Mayor of DC as well. In essence, if you have a renter in your property and you want to sell it – you might be in a TOPA crisis because the renter gets first dibs on the property and or they can sell their rights to someone else, holding up the potential sell on your property; a TOPA nightmare.
2. Wait for the tenant to move out. Another option is to wait for the tenant to vacate the property at their leisure. Then, consider listing it 30 days post their departure, depending on the type of dwelling and the circumstances in which they vacated. To comply with this option, they must leave on their own accord – and don’t even think about selling it until they have officially moved out, post 30 days!
3. Don’t rent your property in DC. Just don’t do it; live in the property, flip the property, but don’t EVER, EVER rent in DC. And should you feel the desire to become a landlord, perhaps Maryland or Virginia is a better option because they don’t have a TOPA law.

In short, if you have a renter in your property and you’d like to sell it, the best advice would be to seek out a DC real estate attorney immediately to help guide you further on TOPA and its legal ramifications. Similarly, if you are considering purchasing a home that is tenant occupied, TOPA still applies and the tenant must be given the option to purchase as well, should you decide to sell it.

“It’s important to ensure strict compliance with TOPA and sellers and listing agents should take it very seriously. There may be additional steps to take or even exemptions that could apply depending on the facts. If all parties are aware of the steps required and their respective rights prior to listing the property for sale, it can help set expectations for the transaction,” said Reid.

In the meantime, we’ll be following DC Council’s efforts on correcting loopholes within this law to help protect DC homeowners and keep you posted on any changes.