TOPA

This task force looks at the impact on our membership of The Rental Housing Conversion and Sale Act of 1980, as amended (the “Act”), which titles have become commonly known as the “Tenant Opportunity to Purchase Act” (“TOPA”). Specifically we review and when appropriate comment on TOPA’s implementation and problems arising from compliance with its requirements.

Background: The Act was enacted into law in 1980, and extended and amended in 1983, 1988, and 1995. Subtitle IV of the Act, affording TOPA rights, requires that owners of residential housing accommodations notify their tenants of the owner’s intent to sell and give the tenants the opportunity to purchase the housing accommodation. In addition to the notice requirements, TOPA requires the owner to negotiate in good faith with the tenants, which includes providing the tenants with certain minimum time frames in which they may organize a tenants’ association, express an interest in purchasing the rental accommodation, negotiate a contract of sale and close on their purchase. Additionally, TOPA provides certain other measures of protection to tenants such as prohibiting an owner from requiring more than five percent (5%) of the total purchase price as an earnest money deposit from a tenant or tenant organization, which deposit is fully refundable in the event of a good faith failure of the tenants to perform under the contract. TOPA not only provides certain legal protections to tenants regarding their opportunity to purchase a rental accommodation, but it also allows them to assign theirs rights under the Act to a third party so as to co-develop or co-own the property. Additionally, tenants may also completely assign their rights to a third party in exchange for cash payments or other valuable consideration.

For more information, contact
S. Kathryn Allen, Answer Title
email: SKAllen@answertitle.com