Bulletin: DC2010001

Dear Associates:

The Rental Conversion and Sale Division of the District of Columbia Department of Housing and Community Development has recently issued updated Offer of Sale Forms with new instructions for each form. These forms can be found on the DHCD web site at http://dhcd.dc.gov/dhcd/cwp/view,a,1243,q,641679.asp.

As a reminder, residential tenants in the District of Columbia have been given significant rights pursuant to the Rental Housing Conversion and Sale Act of 1980 ("TOPA"). These rights include the right to enter into and consummate a contract for the purchase of any residential accommodation before it can be offered for sale by the owner (the so called tenant purchase right) and a right of first refusal once the rental accommodation is under contract for sale to a third party.

The procedures to be followed and the forms to be used will depend on the size of the project. There are separate forms for single tenant housing accommodations, buildings with 2 to 4 rental units and buildings with 5 or more rental units. The appropriate offer of sale (along with a copy of any contract of sale) must be sent certified mail to each tenant. Faxing or e-mailing is not considered proper delivery. For housing accommodations with more than 1 unit, the offer of sale must also be posted at the building in a conspicuous place.

In addition to the communication with the tenants, a copy of the offer of sale must be sent to the Rental Conversion and Sale Division by certified mail or filed in person. Again, faxing or e-mailing is not considered proper delivery. The delivery to the Rental and Sale Division must also include an Affidavit of Delivery of Offer of Sale. The form of this affidavit is included with the new forms.

In all transactions that involve residential rental units, it is imperative that agents confirm that all required offers of sale were properly and timely delivered. This includes a requirement that you contact the Rental Conversion and Sale Division and ask for a copy of all notices and communications they have in their files relating to your property. If the required offer of sale was not properly and timely sent to all of the tenants and the Rental Conversion and Sale Division, you may not insure your transaction.

As a final reminder to all of our agents, TOPA continues to be a significant source of litigation and claims. Because of that, all Title Commitments and Title Policies issued in a sales transaction (both owner's and lender's) which insure residential rental property must contain an exception for TOPA unless a Stewart Underwriter approves its deletion. Please see Bulletin DC000018 for further guidance on this issue.

If you have questions relating to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.

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