With the slow, labored trajectory out of the havoc of last year’s economic downturn, rent and debt forgiveness options for many Americans may soon be at an end. Without prompt legislative action in many communities around the country, this could mean selloffs of distressed properties to the highest bidder, with mass evictions taking place as property owners convert rentals to luxury condos.
Fortunately, there are existing and proposed laws protecting renters from the speculative market that can provide a model for other affordable housing communities facing economic uncertainty.
The first TOPA bill
The first Tenant Opportunity to Purchase Act (TOPA), passed in Washington, D.C. in 1980, was designed as a way of empowering renters in affordable housing communities by giving them the right to purchase their rental property if the property owner chose to sell.
Under the original statute, the owner must give the renter an offer of sale, after which the renter has seven days in which to gather information about the property, such as utility and maintenance costs, floor plan and other operating expenses.
After the tenant responds with an affirmative written statement of interest sent to the owner and the Mayor, there is a 60-day negotiation period during which the tenant can secure financing for the purchase. If there is already a third-party contract, a 15-day extension is added, called the right of first refusal period, during which the tenant may match the contract price.
Under this law, tenants may sell their TOPA rights to other buyers.
Amendments to limit TOPA exemptions
Recent legislation in Washington D.C. has targeted single-family dwellings and those with accessory dwelling units, as well as properties such as condominiums and co-ops that are part of a homeowner’s association. Tenants of such properties would be exempt from the right of first refusal, although this would not affect tenants in properties with two to four units.
Some of the time periods would be altered, allowing only 25 days to negotiate and 45 day to settle with the option of a 30-day extension to obtain financing. Because the bill would grandfather elderly and disabled tenants, these individuals would lose their right to assign their TOPA rights to a third party.
Being able to negotiate purchase of a rental property means understanding the complicated order of forms, deadlines and restrictions under law. Because landlord-tenant laws are changing constantly, it can make a big difference to have the assistance of knowledgeable legal counsel in fighting for your legal rights and interests.