TOPA

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TOPA

Dan Robinson
Investor · Alexandria, VA · Member since 2013 · 72 posts · 26 votes

Anyone have experience with TOPA and getting tenants to waive or sell their rights that would like to share some tips? It feels an awful lot like extortion. Any suggestions on what I can use for leverage in negotiations?

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
9y
Originally posted by @Rhett James:

@Dan Robinson @Russell Brazil How do you obtain the TOPA rights to the parties? Is there a specific document? Is it a letter that says I tenant agree to sell my TOPA rights to buyer B? Did you need an attorney to draw it up?

Thanks,

Rhett

 As someone who firmly disagrees with TOPA, you will never find me putting on the Internet how a 3rd party can obtain the rights 

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  • M Marie M.
    Rental Property Investor · Washington, DC · Member since 2015 · 278 posts · 156 votes
    11y

    You're are a buyer? Or do you already own a DC property?

    TOPA is just the tenant's right of first refusal, if you are the buyer, it's not your problem. The current landlord must give the tenant a chance to buy. In my neighborhood, most tenants don't bother trying to buy the property. They can't afford it or they aren't interested in homeownership.  This old WP article is a decent primer- http://www.washingtonpost.com/wp-dyn/articles/A549... and it depends on the type of property.

    The thing I'd worry about as a buyer of a property with tenants is inheriting crappy tenants. DC is very tenant friendly.

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  • Dan Robinson
    OP
    Investor · Alexandria, VA · Member since 2013 · 72 posts · 26 votes
    11y

    I'm a buyer, and it *is* my problem because I will not close on a house with tenants in it. 

    I understand that most tenants won't or can't buy the house, but they are free to sell their rights to another party which I am hoping to avoid. I am trying to buy their rights and have offered what I feel is a reasonable compensation for them having to find a new place. They have asked for substantially more money. I'm not sure what leverage I have to negotiate.

    Without having their rights assigned to me in writing, it is proving difficult to obtain title insurance.

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  • Russell BrazilBusiness Member
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    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    11y

    As the buyer I advise you not to pay any monetary fee for the TOPA rights being waived or the such.  It is customary that the seller take care of those issues.  You can pay a tenant to waive the TOPA rights...but it is not binding.  They can then go ahead and sell the TOPA rights to someone else after they have extorted you for money.

    If you are looking at buying a small 1, 2 or 3 unit property, I would just look to purchase a property that has no tenants currently in it, or ones the seller has already made a deal with.  If you are looking for something like a large multifamily or apartment building...then you have a lot more issues to deal with than just the TOPA rights.  (Rent control)

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  • Dan Robinson
    OP
    Investor · Alexandria, VA · Member since 2013 · 72 posts · 26 votes
    11y

    Another TOPA question. Suppose there are two tenants and both submit letters of intent to purchase independently. How is that handled?

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  • Russell BrazilBusiness Member
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    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    11y

    @Dan Robinson Just curious how your TOPA situation is going.

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  • Dan Robinson
    OP
    Investor · Alexandria, VA · Member since 2013 · 72 posts · 26 votes
    11y

    We were able to obtain the rights of all the parties, but it did cost us quite a bit. It's really a game of chicken with the tenants. You have to decide if they are capable and willing to shop it around to other parties and if those parties will pay more. We are paying half a small portion now and the remainder when they move out.

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  • Rhett James
    Investor · Washington, DC · Member since 2014 · 8 posts · 2 votes
    9y

    @Dan Robinson @Russell Brazil How do you obtain the TOPA rights to the parties? Is there a specific document? Is it a letter that says I tenant agree to sell my TOPA rights to buyer B? Did you need an attorney to draw it up?

    Thanks,

    Rhett

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y
    Originally posted by @Rhett James:

    @Dan Robinson @Russell Brazil How do you obtain the TOPA rights to the parties? Is there a specific document? Is it a letter that says I tenant agree to sell my TOPA rights to buyer B? Did you need an attorney to draw it up?

    Thanks,

    Rhett

     As someone who firmly disagrees with TOPA, you will never find me putting on the Internet how a 3rd party can obtain the rights 

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    2Reply
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