D.C. Council Considers TOPA Changes After Huge Payouts Exposed - NBC4 Washington
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D.C. Council Considers TOPA Changes After Huge Payouts Exposed

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    D.C. Council members got an earful Thursday from hundreds who showed up to voice concern about a decades-old law with a giant loophole. Jodie Fleischer reports. (Published Thursday, Sept. 21, 2017)

    D.C. Council members got an earful Thursday from hundreds who showed up to voice concern about a decades-old law with a giant loophole.

    The News4 I-Team first exposed the huge payouts and homes held hostage by renters who can pocket tens of thousands of dollars when their landlord decides to sell because of a D.C. law called TOPA, the Tenant Opportunity to Purchase Act.

    "I understand it's the goal of the law to protect tenants, but it puts everyday people like myself in harmful situations," wept Lorraine Connor as she told council members how she feels trapped, unable to sell the property she's owned for 25 years.

    She said her renters won't leave, and she doesn't have the money to pay them.

    "Where am I supposed to get $30,000 to do that? And they're holding my house, I can't sell it," said Connor.

    The Tenant Opportunity to Purchase Act kicks in when the owner of a D.C. property that's been rented out decides to sell.

    It gives the renter the first right to buy the property, but more importantly, it also gives the ability to sell that right to someone else and pocket the profit.

    "It does prevent tenants from being displaced, it gives them a chance to stay in that place that has become their home as well," said Jessica Johnson, an attorney with the D.C. Tenants' Rights Center.

    Johnson and other opponents argued that rising rental costs make it harder for long-time tenants to relocate once they're forced out. Sometimes they can negotiate with a buyer who will let them stay or pay them large sums to leave.

    "It's not solely about purchasing, TOPA is about bargaining power," said Jennifer Berger on behalf of AARP's legal counsel for the elderly.

    Advocacy groups pointed out that tenants could use TOPA payouts to offset costs like moving expenses.

    "If the tenant gets money, it's not because they're being extortionist," said Berger.

    Thursday's hearing lasted almost all day and got heated at times.

    It was initially supposed to be a very narrow proposal to change the law for things like room rentals and English basements, but Council Chairman Phil Mendelson went much further, instead proposing to exempt all single-family homes from the TOPA law.

    The standing-room-only crowd, largely filled with realtors, owners and potential buyers, erupted with a standing ovation.

    They arrived at the meeting in buses and sported stickers and signs urging the council to "Fix TOPA."

    In May, the News4 I-Team first exposed a series of horror stories surrounding TOPA, renters refusing to leave, holding up home sales for months or even years, and demanding tens of thousands of dollars.

    "I think it can be simplified, so that extortion and payouts are not a part of it," Dianna Douglas told the council members.

    Douglas and her family wanted to buy a home, but lost the sale when a renter demanded $10,000 by exercising TOPA rights.

    One of D.C.'s biggest TOPA defenders is attorney Andrew McGuire, who drives a "TOPAmobile" advertising for his law practice, which now is devoted entirely to getting renters the most money for their TOPA rights. He wants the law to stay as is.

    "There is a flourishing market in TOPA rights, they are bought and sold, and that's been going on since 1980, and I don't think anyone has any illusions on it," McGuire told the council.

    But that's no comfort for owners like Lorraine Connor.

    "I would not rent out a house in D.C. ever again," she said. "There must be a way to fix this timeliness so homeowners are not held hostage."

    Reported by Jodie Fleischer, produced by Rick Yarborough, and shot and edited by Jeff Piper.