News

CM Graham Approves Council Action on Tenant Rights

FOR IMMEDIATE RELEASE

Contact: Alan Heymann (202) 727-8229

The Council of the District of Columbia has taken a strong stand for tenant rights today by sending two key pieces of legislation to Mayor Anthony Williams for signature. Councilmembers Jim Graham (the chair of the Committee on Consumer and Regulatory Affairs), Phil Mendelson (At Large) and Adrian Fenty (Ward Four) were the principal advocates.

The first, Bill 16-50, formally ends the landlord practice of evading the tenants’ right to an offer of purchase under the Tenant Opportunity to Purchase Act (TOPA).

For years, some landlords have manipulated a provision of TOPA, which states that a sale "includes" the "transfer of 100% of all partnership interest" in a partnership that owns the building, to mean that only 100% transfers of interest in a property constituted a sale. The Council never intended this exclusive reading of that provision.

Lawyers for the landlords then crafted "opinion letters" stating, in each case, that where less than 100% of these interests had been transferred a sale had not taken place. Without exception, a sympathetic employee of the Department of Consumer and Regulatory Affairs (DCRA) issued these letters on demand to landlords. Because of this secret, summary process, tenants were never given an opportunity to purchase their buildings -- or even informed that their homes had been sold.

This practice became known as "95/5" because of the small percentages of ownership held back during a sale. In one particularly egregious case, the landlord transferred 99.99% of 11 buildings into 11 separate entities, holding back .01 percent interest in the 11 buildings. In the past three years alone, more than one hundred buildings have been sold in similar transactions, affecting nearly 3,000 apartments in every ward of the District.

At the request of Councilmember Jim Graham (D-Ward One), DCRA temporarily stopped issuing the letters earlier this year. The employee who wrote them has since retired.

"Tenants are the big winners today," said Councilmember Graham. "We won’t stand for their rights being signed away or leaving them in the dark anymore. The overwhelming support the Council gave this bill should send a signal to landlords across the District that the rights of their tenants must be respected."

In addition, Bill 16-50 creates a task force to re-examine the law relating to the sale or conversion of rental buildings in the District.

The final vote on Bill 16-50 was 12 in favor, with 1 member voting "present."

The Council has also sent Mayor Williams Bill 16-47, which extends rent control in the District for another five years. First enacted in 1985, rent control was set to expire December 31, 2005. Today’s early action means renters will be protected until December 31, 2010.

Councilmember Graham introduced the legislation in January, joined by all but one of his colleagues on the Council. "We decided this issue was important enough for action now, despite rent control not expiring for another eight months," Graham said. "Landlords are under enormous pressure in this red-hot real estate market -- to raise the rent or sell their buildings. Rent control works, and now we’ll keep it working."

Nearly 72 percent of Ward One residents rent their homes, according to the 2000 Census. This is the highest percentage of renters in any ward except Ward Eight.

Bill 16-47 passed unanimously.

Both bills can be viewed online:

B16-47 B16-50