DC Lawmakers Choose Shorter TOPA Tolling Period

On January 18, 2022, an amendment to Bill 24-612 (legislation that would extend the eviction moratorium in DC until June 30, 2022) (the "Amendment") was introduced to the DC Council that proposed tolling tenant deadlines under the Tenant Opportunity to Purchase Act ("TOPA") until February 28, 2022. After negotiations, the DC Council reduced the deadline of the tolling period to February 15, 2022. The Council passed the Bill as amended, which became law on February 3, 2022.

The Amendment seeks to address concerns that the current spike in COVID-19 may make it difficult for tenants to meet with tenant advocates in person, which may result in tenants unknowingly waiving their rights under TOPA by failing to meet important deadlines.

What is TOPA?

TOPA was enacted by the DC Council in 1980 to prevent renters from being forced from their homes due to rising rents and gentrification. To do this, TOPA allows tenants to form tenant organizations and provides tenants with first rights of refusal. In other words, when a residential landlord receives a purchase offer from a prospective buyer, the landlord must first offer to sell the property to its tenants on the buyer's terms before contracting with the buyer. Tenants then have a certain number of days to request additional information, to create a tenant organization, and to negotiate with the landlord to purchase the property. However, TOPA allows tenants to waive some of these rights, which they often do.

TOPA does not apply to all residential real estate in DC. Certain residential properties, such as single-family homes, are largely exempt from TOPA.

What does the tolling of tenant deadlines mean?

The tolling of certain tenant deadlines under TOPA will have obvious consequences, such as halting certain residential real estate transactions in DC. However, some of the recipients of these consequences are not as obvious. For example, the Amendment would halt efforts by a non-profit organization purchasing residential properties to be used by low- and moderate-income tenants. The timing of such purchases is particularly important if affordable housing covenants are set to expire.

The upshot, however, is that the DC Council's shortening of the tolling period as originally proposed suggests increased predictability and stability is on the horizon. The Council's sign-off on a shortened tolling period suggests that it is beginning to imagine a world without the emergency legislation that has become part and parcel of the COVID-19 pandemic.

Moreover, the Council's recent attention to TOPA invites a conversation to re-engineer TOPA to better enable it to achieve the lofty policy goals it was set out to accomplish. However, the Council's reluctance to begin re-imagining TOPA despite being provided with an opportunity to do so suggests that such a conversation may be one the Council would prefer to avoid.