Tenant Opportunity to Purchase Act (TOPA)

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Topic: Tenant Opportunity to Purchase Act (TOPA)

Real Estate January 30, 2014 at 6:20 pm

Tenant Opportunity to Purchase Act (TOPA)

So I’ve recently learned that my landlord is seeking to sell and that there is this thing called the Tenant Opportunity to Purchase Act, or TOPA, which gives current tenants the right of first refusal and the right to express an interest in buying the place building before a landlord can solicit offers from non-tenants.

Has anyone had any experience with this? I expect eventually I’ll need to talk to an attorney, but I am interested in how one goes about finding potential third-party investors to pool capital. I understand that one think TOPA permits is the assigning of the right of first refusal and that sometimes tenants work out a shared ownership deal in exchange for assigning the right.

Any personal experiences out there?

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My buddy got a sweet deal buying a condo in Dupont, when the building he was renting in was redeveloped. The first step was for a majority of renters to form a tenant association to negotiate with the owner. Since the tenant association had right of refusal, with statutory delay periods, they could essentially gum up the works on any alternate offers. It made more sense for the owner to (a) buy out the renters who didn’t want to stay (for a $10k bonus or whatever), (b) sell apartment-turned-condo units to the remaining renters at negotiated submarket rates, and (c) sell remaining units at market rates.

Another neighbor bought her house when her roommate/landlord decided to move out of DC permanently, and let her have it for a very good price. They kept the real estate commissions, and he didn’t have to worry about TOPA issues. Otherwise, an expedient thing for the owner might have been to use the entire house for personal use for a year, after which the former tenant would no longer have the opportunity.

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