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District of Columbia Code Division VII. Property. § 42-3404. Tenant opportunity to purchase.

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) Before an owner of a housing accommodation may sell the housing accommodation or issue a notice to vacate for purposes of demolition or discontinuance of housing use, the owner shall give the tenant an opportunity to purchase the housing accommodation at a price and terms that represent a bona fide offer of sale.

(a-1) Whenever an offer of sale is made to tenants for a housing accommodation with 5 or more units that is required by subsection (a) of this section before the owner may issue a notice to vacate for purposes of demolition or discontinuance of housing use, and the offer is made in the absence of an arm's-length third-party contract, the following shall apply:

(1) The sales price contained in the offer of sale shall be less than or equal to a price and other material terms comparable to that at which a willing seller and a willing buyer would sell and purchase the housing accommodation, or the appraised value of the housing accommodation as determined by this subsection.

(2) An appraised value shall only be based on rights an owner has as a matter-of-right as of the date of the offer, including any existing right an owner may have to convert the property to another use.

(3) Within the restrictions of paragraph (2) of this subsection, an appraised value may take into consideration the highest and best use of the property.

(4) The owner of the housing accommodation shall have the burden of proof to establish that an offer of sale under this subsection is a bona fide offer of sale.

(5)(A) A tenant organization registered according to § 42-3404.11(1) may challenge the offer presented by an owner of a housing accommodation as not being a bona fide offer of sale, and request a determination of the appraised value of the housing accommodation.

(B) The tenant organization shall request an appraisal by delivering the request to the Mayor and the owner by hand or by certified mail within 45 days of receipt of the alleged bona fide offer of sale.

(C)(i) The tenant organization and owner of the housing accommodation shall jointly select an appraiser.  If within 14 days after a tenant organization has requested an appraisal, the tenant organization and owner of the housing accommodation have not agreed upon an appraiser, either party may request that the Mayor select an appraiser.

(ii) A request that the Mayor select an appraiser shall be in writing and delivered by hand or by certified mail to the Mayor and to the owner or to a member of the board of the tenant organization.

(iii) The Mayor shall select the appraiser on a sole source basis within 7 days of receiving the request for an appraiser.

(D) The tenant organization and owner of the housing accommodation shall pay one-third and two-thirds of the cost of the appraisal, respectively.

(E)(i) The appraiser shall hold an active license as a Certified General Real Property Real Estate Appraiser that has been issued by the District of Columbia Board of Real Estate Appraisers.

(ii) The owner shall give the appraiser full, unfettered access to the property.

(iii) The owner shall respond within 7 days to any request for information from the appraiser.

(iv) The tenant organization may give the appraiser information relevant to the valuation of the property.

(F) The appraisal shall be completed expeditiously according to standard industry timeframes.

(6) Beginning with the date of a tenant organization request for an appraisal, and for each day thereafter until the tenant organization receives the appraisal, the negotiation period described in § 42-3404.11(2) shall be extended by one day.

(7)(A) The determination of the appraised value of the housing accommodation in accordance with this subsection shall become the sales price of the bona fide offer of sale for the housing accommodation unless:

(i) The owner and the tenant organization agree upon a different sales price of the housing accommodation;  or

(ii) The owner elects to withdraw the offer of sale within 14 days of the receipt of the appraisal by the owner.

(B)(i) The owner shall withdraw the offer of sale by delivering by hand or by certified mail a letter of withdrawal to the Mayor and a member of the board of directors of the tenant organization.

(ii) Upon the election to withdraw the offer of sale, the owner shall reimburse the tenant organization for its entire share of the cost of the appraisal within 14 days of delivery pursuant to sub-subparagraph (i) of this subparagraph.

(iii) An owner who withdraws an offer of sale in accordance with this subparagraph shall be precluded from making a subsequent offer of sale to the tenant organization without an arm's-length third party contract for 3 months from the date of the election to withdraw the offer of sale.

(8) Within 30 days of the receipt of the appraisal conducted by an appraiser selected by the Mayor pursuant to paragraph (5)(C) of this subsection, either the tenant organization or the owner of the housing accommodation may challenge the appraisal as being in violation of the requirements of this subsection in the Superior Court of the District of Columbia for the court to take any appropriate action the court may deem necessary.

(a-2) Notwithstanding subsection (a-1) of this section, for a tenant organization that before February 26, 2016, has registered the tenant organization with the Mayor pursuant to § 42-3404.11(1) and pursuant to either § 42-3405.03 or § 42-3405.03a has filed a complaint concerning this section, the following shall apply, beginning January 1, 2014:

(1) Repealed.

(2) Whenever an offer of sale is made to tenants for a housing accommodation with 5 or more units that is required by subsection (a) or (a-1) of this section before the owner may issue a notice to vacate for purposes of demolition or discontinuance of housing use, and the offer is made in the absence of an arm's-length third-party contract, the following shall apply:

(A) The sales price contained in the offer of sale shall be less than or equal to a price and other material terms comparable to that at which a willing seller and a willing buyer would sell and purchase the housing accommodation, or the appraised value of the housing accommodation as determined by this subsection.

(B) An appraised value shall only be based on rights an owner has as a matter-of-right as of the date of the offer, including any existing right an owner may have to convert the property to another use.

(C) Within the restrictions of subparagraph (B) of this paragraph, an appraised value may take into consideration the highest and best use of the property.

(D) The owner of the housing accommodation shall have the burden of proof to establish that an offer of sale under this subsection is a bona fide offer of sale.

(E)(i) A tenant organization registered according to § 42-3404.11(1) may challenge the offer presented by an owner of a housing accommodation as not being a bona fide offer of sale, and request a determination of the appraised value of the housing accommodation.

(ii) The tenant organization shall request an appraisal by delivering the request to the Mayor and the owner by hand or by certified mail within 45 days of receipt of the alleged bona fide offer of sale.

(iii)(I) The tenant organization and owner of the housing accommodation shall jointly select an appraiser.  If within 14 days after a tenant organization has requested an appraisal, the tenant organization and owner of the housing accommodation have not agreed upon an appraiser, either party may request that the Mayor select an appraiser.

(II) A request that the Mayor select an appraiser shall be in writing and delivered by hand or by certified mail to the Mayor and to the owner or to a member of the board of the tenant organization.

(III) The Mayor shall select the appraiser on a sole source basis within 7 days of receiving the request for an appraiser.

(iv) The tenant organization and owner of the housing accommodation shall pay one-third and two-thirds of the cost of the appraisal, respectively.

(v)(I) The appraiser shall hold an active license as a Certified General Real Property Real Estate Appraiser that has been issued by the District of Columbia Board of Real Estate Appraisers.

(II) The owner shall give the appraiser full, unfettered access to the property.

(III) The owner shall respond within 7 days to any request for information from the appraiser.

(IV) The tenant organization may give the appraiser information relevant to the valuation of the property.

(vi) The appraisal shall be completed expeditiously according to standard industry timeframes.

(F) Beginning with the date of a tenant organization request for an appraisal, and for each day thereafter until the tenant organization receives the appraisal, the negotiation period described in § 42-3404.11(2) shall be extended by one day.

(G)(i) The determination of the appraised value of the housing accommodation in accordance with this subsection shall become the sales price of the bona fide offer of sale for the housing accommodation unless:

(I) The owner and the tenant organization agree upon a different sales price of the housing accommodation;  or

(II) The owner elects to withdraw the offer of sale within 14 days of the receipt of the appraisal by the owner.

(ii)(I) The owner shall withdraw the offer of sale by delivering by hand or by certified mail a letter of withdrawal to the Mayor and a member of the board of directors of the tenant organization.

(II) Upon the election to withdraw the offer of sale, the owner shall reimburse the tenant organization for its entire share of the cost of the appraisal within 14 days of delivery pursuant to sub-sub-subparagraph (I) of this sub-subparagraph.

(III) An owner who withdraws an offer of sale in accordance with this subparagraph shall be precluded from making a subsequent offer of sale to the tenant organization without an arm's-length third party contract for 3 months from the date of the election to withdraw the offer of sale.

(H) Within 30 days of the receipt of the appraisal conducted by an appraiser selected by the Mayor pursuant to subparagraph (E)(iii) of this paragraph, either the tenant organization or the owner of the housing accommodation may challenge the appraisal as being in violation of the requirements of this subsection, to the Superior Court of the District of Columbia for the court to take any appropriate action the court may deem necessary.

(b) Repealed.

(c) Repealed.

(d) Repealed.

(e)(1) Within 5 days after a request by any person, the Mayor shall provide:

(A) Written certifications, including the date of receipt, of any notices received pursuant to subchapters IV and V of this chapter, or, if the Mayor has not received notices regarding a property specified by the requestor, certification of such non-receipt;  and

(B) Copies of the notices.

(2) The certifications may be recorded among the records of the Recorder of Deeds and shall be exempt from filing fees.

(f) A tenant's rights under this subchapter vest at the time of receipt of an offer of sale pursuant to § 42-3404.03 and shall not apply to a tenant that begins occupying a housing accommodation after the issuance of an offer of sale.

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Cite this article: FindLaw.com - District of Columbia Code Division VII. Property. § 42-3404. Tenant opportunity to purchase. - last updated January 01, 2024 | https://codes.findlaw.com/dc/division-vii-property/dc-code-sect-42-3404-02/

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