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TOPA: Protection or extortion?

Inadvertently reducing the amount of housing available to renters

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Anita Bonds, gay news, Washington Blade
Anita Bonds, gay news, Washington Blade

Council member Anita Bonds looked into how TOPA went from protecting tenants to hurting homeowners. (Washington Blade file photo by Michael Key)

Last week, I had the privilege of attending my first D.C. Council meeting as part of a contingent of roughly 200 real estate agents, attorneys, tenant advocates and homeowners.

The topic: D.C.’s Tenant Opportunity to Purchase Act (TOPA) of 1980.

The premise of the Act was a noble one. In response to burgeoning gentrification within the District it gave a tenant the first right to purchase the home in which he resided upon being informed by the owner that it was being sold. Notification procedures, transparency requirements and lengthy deadlines would ensure the tenant would have sufficient time to negotiate a contract, obtain financing, and settle on the home.

Embedded in the law was a provision whereby the tenant could transfer her purchase rights to another individual if she chose. What began as an avenue for the tenant to secure a qualified buyer who would allow her to remain or receive a reasonable stipend from the seller to assist her in moving to a new location devolved into a “pay to play” situation.

Real estate agents began to see abuses of the Act. Tenants would seek substantial sums of money for their rights to purchase, which resulted in a new way to earn a living, both for the tenants and for the attorneys who represented them, and often held a sale hostage while negotiations took place.

With the assistance of the District of Columbia Association of Realtors (DCAR), TOPA finally found its way into local television news. A three-part investigative series prompted the D.C. Council, spearheaded by Council member Anita Bonds, to focus on how the law had gone from protecting tenants to hurting homeowners, raising the cost of housing, and reducing D.C. housing stock for the very tenants TOPA was designed to protect.

As a result, a task force made up of real estate agents, attorneys and tenant advocates was formed. Two amendments to TOPA were ultimately sponsored by members of the Council and became the reason we were all seated in Room 500 of the Wilson Building on the morning of Sept. 21.

The TOPA Accessory Dwelling Unit Amendment Act of 2017, sponsored by Council member Bonds and six other members, including Chairman Phil Mendelson, provides for an exemption from TOPA requirements for certain owner-occupied residences with accessory units such as basement apartments, carriage houses and converted garages. It also caps payments to tenants in those units at $1,500.

The Home Sale Facilitation Amendment Act of 2017, sponsored by Council member Brianne Nadeau, reduces the lengthy timelines currently in effect, streamlines the process, and exempts single-family dwellings that are the seller’s primary residence from TOPA requirements.

The Council meeting began with testimony from the co-chairs of the DCAR TOPA Task Force. As local title attorneys, they explained the impact of a confusing and costly process, the difficulty in confirming compliance, and the uncertainty of a timely sale.

Tenant advocates from AARP and the Legal Aid Society spoke out against the amendments, arguing that TOPA promotes homeownership, yet they, the title attorneys, and the real estate agents all agreed that it was seldom that a tenant bought the property they inhabited using the provisions of TOPA.

A homeowner adversely affected by TOPA tearfully told a horror story of renting her home to a family of three who proceeded to allow unauthorized people and pets to live there, broke appliances and fixtures, lived in filth, and failed to report leaks that resulted in mold. Repairs to the property totaled $7,000.

Despite being offered an additional sum to relocate, the tenants refused. The homeowner, who is now retired and living out-of-state on a fixed income, is still unable to complete the sale of her home. Her sentiment, that she would never again rent a D.C. home to anyone, was echoed by others who testified or sent letters to be read into the record.

A local attorney whose business is to seek out tenants who have been served TOPA notices proudly testified that, for a one-third contingency fee, he negotiates an average of $30,000 for the purchase of a tenant’s TOPA rights and often obtains debt forgiveness of up to $20,000. At this point, the audience erupted in anger.

Is it any wonder that people are shying away from renting their D.C. homes and looking for investment property in nearby Maryland or Virginia?  Ironically, in an area where 52 percent of residents are renters, TOPA laws, instead of protecting tenants as intended, are reducing the amount of housing available to them.

So where do we go from here? A mark-up of the proposed amendments, a vote by the Council, and a 30-day review by the U.S. Congress. Stay tuned.

 

Valerie M. Blake is a licensed Associate Broker in D.C., Maryland and Virginia and Director of Education & Mentorship at Real Living| At Home. Call or text her at 202-246-8602, email her at [email protected], or follow her on Facebook at TheRealst8ofAffairs.

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  1. Eva-Maria von Bronk

    October 2, 2017 at 5:09 pm

    Thanks, Valerie. That pretty much summed up the meeting I attended (although I left after 3 hours after realizing that I wouldn’t be able to speak). We manage rental properties for mostly “individual” owners and his law definitely hurts all of us….

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Real Estate

My Best Of’s in D.C. real estate

Favorites in buyer programs, paint colors, and more

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Forget shiplap, wallpaper is back!

As I congratulate my colleagues and friends who have received the coveted Best of Gay DC awards, I thought it appropriate to share with you my own, subjective “Best of” list. 

Best Housing to Buy. With 233 of them on the market in D.C., the one-bedroom, one-bath condominium under $400,000 may be the best option for a personal residence or investment. Given a median price of $320,000 and 49 days on the market, there are deals to be made. You have your choice of areas around the city and of buildings large and small.

Best First-time Buyer Program. D.C.’s Housing Purchase Assistance Program (HPAP) is by far the best option to use if you are eligible. This program is based on household income and size and can provide up to $84,000 toward the purchase of a D.C. personal residence. For example, to receive the full amount, the income of a party of two is limited to a total of $51,600, 50% of the median family income for D.C. Other requirements may apply.

Best Tax Reduction Program. If you qualify, you may be able to take advantage of the DC Tax Abatement Program. Using the example of our party of two working adults buying a personal residence for less than $516,800, the income limit is $79,020 or $113,500 in designated Economic Development Zones.

Approval for the program exempts buyers from paying property taxes for up to five years and reduces the closing costs for the purchase by eliminating the buyer-paid recordation taxes and distributing the seller-paid transfer taxes to the buyer instead of to the DC tax office. For the buyer of that $516,800 personal residence, that can mean a savings of nearly $15,000 in closing costs.

Best Neutral Paint Color. First it was Builder Beige, then Gray was OK, then they blended into Good Grief Greige. While neutrals can be bland and boring, these days, expect to see a variety of off-whites gracing the walls of homes for sale. Sherman Williams 7008, Alabaster, did the trick for my most recent sellers. 

Best Wall Décor. Sponge paint and other effects are long gone. Forget shiplap unless you live in a house at the beach or on an actual ship. Distressed wood may still be suitable for a cabin in the woods, but in a modern, urban setting, wallpaper is back, baby! 

This is not your grandmother’s wallpaper. No chickens, tiny prints, borders, or faux grass cloth are in sight. Today’s wallpapers are bold, geometric, or a throwback to mid-century modern and are primarily used on an accent wall so they’re not overwhelming. Love vs. Design (lovevsdesign.com) can create custom wallpaper to match your color scheme in a peel and stick application that eschews the mess of wallpaper paste.

Best Indoor Plant. For us plant growing novices, the award goes to The Easy Care Bundle at The Sill (thesill.com). For only $45, you get two potted succulents that are very hard to kill, a Snake Plant and a ZZ Plant. 

You can also set yourself up on a subscription. $60 plus a $10 shipping charge buys a medium sized plant-of-the-month with a black or cream-colored planter. Choose classic plants or select pet-friendly, non-toxic plants for only $5 more with a 3-month minimum subscription. You can even purchase these as gifts.

Best Balcony Plant. For homes with a balcony or a deck, the winner is a potted Winter Gem Boxwood. It’s an evergreen that will turn a golden shade in the winter then green again in the spring. It also grows in both full and partial shade – almost a set it and forget it type of shrub – needing water only once a week or twice in hotter climates. Cut it as a topiary à la Edward Scissorhands for a little architectural interest.

Best Freestanding Refrigerator. I would be remiss if I didn’t include a best appliance category.An upscale fridge with see-through doors and built-in versions of computers, televisions and smart home elements holds a certain appeal until one of the glitzy attractions breaks and you spend as much for a new motherboard as you would for a whole new refrigerator. 

The winner of this category, therefore, is Samsung’s model RF28R7351SR. This bad boy is available in both standard and counter depth and features a French door top with external water and ice, a pull-out freezer with dual baskets, and a middle drawer that can be set to one of four temperatures to accommodate food or wine.

There you have it. Now, if you’ll excuse me, I’m off to judge the Best of Blake Miniature Schnauzers category. I’m thinking a 4-way tie is in order.

Valerie M. Blake is a licensed Associate Broker in D.C., Maryland, and Virginia with RLAH Real Estate. Call or text her at 202-246-8602, email her via DCHomeQuest.com, or follow her on Facebook at TheRealst8ofAffairs

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Real Estate

Helpful tips for homebuyers in seller’s market

2021 has been a great year for home sales

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COVID-19 housing market, gay news, Washington Blade

Without question, 2021 was a great year for home sales. Sellers across the country, in many cases, found themselves listing their homes and quickly having not just one, but multiple offers, many of which were at asking price or above. With limited inventory and high demand, it has been an ideal year to sell—and conversely, often a difficult year to buy. Buyers who are interested in a particular home, or even in a specific neighborhood, often find themselves facing stiff competition to have offers accepted. 

Fortunately, this doesn’t mean that many buyers haven’t had successful and rewarding home buying experiences—just that doing so often means making an extra effort and taking helpful steps to make an offer the most competitive that it can be. With that in mind, let’s take a look at a few helpful tips for buyers in a seller’s market:

  • Plan ahead with mortgage pre-approval: While there are certainly a wide variety of strategies that real estate agents and financial advisors may recommend, and while those strategies might vary depending upon the buyer and the circumstances of a particular market, one thing almost all experts agree on is that obtaining a mortgage preapproval is a smart decision. A mortgage preapproval is an ideal way to reassure sellers that a reputable lender has verified your credit and approved your buying power up to a certain limit. If you’re caught in a bidding war with another potential buyer, having preapproval establishing that you are ready, willing, and able to buy just might give you the advantage you need in a competitive market.
  • Be willing to look under budget so you can bid higher: In this highly competitive market, many home buyers find themselves in a situation where they are in a bidding war with another—or even several other—buyers. In that situation, you may find yourself having to make an offer at, or even in many cases, above, the asking price. This means that you may want to adjust your budget—and bidding—accordingly. Choosing to make an offer on a home that has an asking price that is already at the top of your budget may mean that you simply don’t have much wiggle room when it comes to making an offer over that price. Choosing a home slightly under the top of your budget means you’ll have more flexibility to make a bid that is more competitive and likely to be accepted.
  • Consider offering non-price-oriented incentives: Without question, making a highly competitive offer is going to be the key to increasing your chances of having that offer accepted. It’s important to remember that there is more to an offer than just price, however. Buyers may want to consider increasing the appeal of an offer by supplementing it with other incentives beyond just the dollar amount itself. Examples of such incentives might include things like foregoing the seller-paid home warranty that is often offered as part of the process, offering a shorter closing period, not making the purchase contingent upon the sale of a currently-owned home, or other such incentives. Doing so may give you the edge you need to have your offer selected over other competitive bids.
  • Retain the right real estate agent: Often, for LGBTQ buyers, especially in a competitive market, this piece of the puzzle is particularly important. In many, although certainly not all, cases LGBTQ buyers are drawn to specific areas of a city or community where other LGBTQ individuals live. That means that in a market where inventory is already limited and going quickly, there can be even fewer homes available upon which to bid. When that is the case, you will need a real estate agent who knows the community that you’re interested in, and who can quickly help you identify and take action toward making offers on homes that fit your needs. Having the right agent can make all the difference between a smooth and successful home-buying experience, and a stressful one

Jeff Hammerberg (he/him/his) is the Founding CEO of Hammerberg & Associates, Inc. Reach him at 303-378-5526, [email protected] or GayRealEstate.com

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Real Estate

Help, I’m under contract!  They accepted my offer?!

Buyer and seller need to work as a team

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What are the most common questions real estate agents, title companies and lenders get once a client is under contract? Well, luckily on my team we send out a next steps letter to all of our clients once an offer has been accepted and this helps them to know what to do the first week, the second week, and in any subsequent weeks before the settlement.  

For example, the letter will go out and say, “Make sure to get your EMD check to the title company in the agreed upon amount of time.” The EMD is your earnest money deposit, and most contracts have a buyer write a check for several thousands of dollars that will go the title company as sort of a “security deposit” on a contract that later gets applied to the buyers’ closing costs.

The letter will also instruct a buyer to contact their lender and confirm with them that they are under contract and to get the contract over to the lender so they can start preparing the loan and order the appraisal. The letter also states that later in the process the buyer will get the wiring instructions from the title company where settlement will be held for the down payment money. If there is to be a home inspection, we will also get that scheduled, usually in the first week after going under contract also.  

If selling, the letter is a different one with information about moving companies and getting any staging out of the listing. Both parties will receive instructions on how to change the utilities from the seller to the buyer the week of settlement. The title company will also follow up with the buyers and sellers to get any needed info. They will ask any questions necessary to possibly help the buyer to get any deductions or credits they might qualify for that could lower their closing costs. A good lender will do this also.

What each buyer and seller needs is good teamwork to make the dream work whenever a house is changing hands and a large transaction is going to be handled. For more information, you can contact me to attend my next Homebuyer’s Seminar on Oct. 12 in the evening, which will be on Zoom.  

Joseph Hudson is a Realtor at the Rutstein Group of Compass. Reach him at 703-587-0597 or at [email protected].

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