The D.C. Council approved legislation Tuesday that could save thousands of dollars for District homeowners and stop renters from holding up home sales.
It closes a loophole first exposed by the News4 I-Team last year: Some tenants were exploiting a decades-old D.C. law to demand large sums of money from landlords.
"The committee firmly supports TOPA as a way to prevent displacement, however TOPA was never intended to be a money-making business for tenants," said Councilwoman Anita Bonds, who chairs the housing committee which put forth the legislation.
TOPA — the Tenant Opportunity to Purchase Act — was designed to give tenants the first right to buy the home they're renting if it goes up for sale.
But as the News4 I-Team revealed in a series of reports, TOPA rights were also delaying or canceling pending sales and shaking down homeowners for cash.
"It holds single-family homeowners hostage, it's a tool for extortion and it's awful," said Lorraine Connor, who said she was forced to take her southeast D.C. home of 25 years off the market after her tenant refused to leave and used TOPA to demand tens of thousands of dollars.
On Tuesday, Connor had a front row seat to watch D.C. council members vote to exempt single-family homes from TOPA.
"I'm so happy for the next person who wants to do this," said Connor, whose home would not have been subject to TOPA under the new legislation.
She said she did not know about the impact TOPA could have when she decided to rent out her home. She was finally able to sell it recently, but she’s glad others might not have the same problems.
Once the I-Team exposed the District's industry of “TOPA-chasers” who seek out tenants in properties that go up for sale, council members held hearings and spoke with owners who were afraid to rent out all or part of their property.
"TOPA, with regard to single family homes, has been demonstrated to hurt homeowners," said D.C. Council Chairman Phil Mendelson. "And that is why we're concerned about the current law and want to change the law."
Under the new law, TOPA would no longer apply to renters of single family homes, except when the renter is disabled or over 62 years of age.
The council chambers erupted with applause after the legislation passed its first reading; it was heavily supported by realtors who say they've watched the abuse of TOPA grow over the years. Throughout the legislative process, they've donned yellow stickers urging the council to "Fix TOPA."
"I think this is a win-win for homeowners and for tenants," said Colin Johnson, Past President of the DC Association of Realtors.
The legislation passed by a vote of 10-2, with Council member Robert White Jr. recusing himself from the discussion since his wife is in the process of selling a home.
Council members Brianne Nadeau and Elissa Silverman voted against the measure, instead attempting to amend it to preserve TOPA for long-term tenants who paid rent in a home for 10 years or more.
"I truly believe we must use a scalpel, not a sledgehammer, to address an issue of such great importance," said Nadeau.
But both council members agreed third parties should not be permitted to take advantage of the law.
"This is outrageous and it should be stopped," said Silverman. "It has been exploited by some who have no intention of purchase and used the TOPA law as a shakedown."
The legislation will come back up for a second vote April 10, then it would require the mayor's signature.
It will not impact multifamily units like apartment buildings; those renters' TOPA rights will remain intact to protect affordable housing in gentrifying neighborhoods.