When Our Building Was Sold, We Organized

When Our Building Was Sold, We Organized

   Uncategorized    September 30, 2020  |  0

In this post, 730DC editor Hayden Higgins reflects on his building’s experience with DC’s TOPA process, which allows a tenant association to make a counteroffer when their building is up for sale.

One day last October, I came home to find a 24-page packet of dense legalese taped to the front door of my apartment building.

Our home was being sold.

The initial shock turned to concern as I flipped through the packet, which had been photocopied at a tiny size. Shouldn’t we have known this was in the works? How would we be affected? Who was buying our building?

It didn’t say, not really. Someone had registered an LLC in the name of our building in Delaware, the state where corporate secrets are always safe. I had one name to Google, the registered agent, but a few minutes’ searching yielded close to nothing — the clunky government sites and sketchy “instant background check” pages equally unhelpful.

I was pretty sure our leases wouldn’t be affected, at least not immediately. The buyer would just take over our leases. But what about after the leases ended? There was a lot we needed to learn.

Luckily, I knew how we could find out. In DC, tenants are by law given certain protections and privileges when their landlord sells a building. The Tenants Opportunity to Purchase Act affords its namesake opportunity, but the law — colloquially known as TOPA — allows tenants to intervene in other ways, too.

By posting that notice on the door, our landlord had started the clock on this TOPA process. We had 45 days to respond to the notice, which we could only do if we had formed a tenant’s association which could license our collective decisions as a building. Several days later — and after calls to a few patient friends in tenant advocacy — I put fliers throughout the building inviting my neighbors to my apartment for a meeting.

It turned out I wasn’t the only one concerned. Almost a third of our 38-unit building showed up. One neighbor’s follow-up email summarized the feelings many have when they feel their home is threatened: “The sale of our building is a bit terrifying.”

Soon, we had a tenants’ association that the city and our landlord would have to legally recognize. We had power.

About six months later, the process is over. The same company is buying it — but we’re walking out with at least a month of free rent, several significant upgrades to the building, and a much greater sense of community within our building.

Here’s what I learned from organizing after our building was sold.

Get to Know Your Neighbors…

I’d moved to the building in February 2018, after living in houses in Eckington, Trinidad, Capitol Hill and Kingman Park. After the leafy, largely quiet streets of Northeast, living off noisy U St was an abrupt change. Banneker Pool was much busier than Rosedale or Harry Thomas. The nightlife and construction could disrupt sleep and concentration.

But the main thing was that, at every rowhome I’d lived in, we knew our neighbors better than I did in my new apartment building full of fellow yuppies. In Trinidad we played dominoes with Ron next door. In Eckington Big Rick would come watch us play Magic cards, mystified, and the lady neighbors next door would ask when our cute friend who’d once streaked around the block would come back; in Kingman Park that same friend threw horseshoes in a field that is now, surely, condos. At the Capitol Hill house we watched our basement neighbor’s dog and vice versa. But in this building of millennials, I knew nary a name, and a friendly passing hello rarely found conversational purchase.

That changed when we formed our tenants’ association. There’s something about griping together that opens people up. It turned out that there was widespread dissatisfaction with our management company, but without a common forum our voices hadn’t been heard. We needed to know we had something in common (our building being sold) before we could find all the other things we had in common.

…And Your Landlord

Is your landlord kinda horrible? Ours is! They own a couple of properties that I had canvassed with the Stomp Out Slumlords campaign; we had previously brought one of the tenants in a neglected property to our building to knock on doors and get our tenants to petition our landlord for better care of that building. More recently, tenants in another building held by our landlord went on rent strike over illegal conditions including mold, poor security and neglected maintenance.

As part of the sale process, the new buyer held an audience with our building, with the current landlord in attendance. We aired our concerns about the current landlord’s shoddy record managing our own building, as well as the unjust neglect they’d inflicted on poorer tenants at the buildings mentioned above — in front of the new buyer, who was considering keeping our current landlord as the building management company. It was not a good look for this bigwig.

And it’s not like we liked this landlord, anyways. They have been atrocious at basic maintenance and security. Repairs took too long. There weren’t enough trash bins for the building. Our back door didn’t consistently lock for a long time, letting package thieves and others into the building; afterwards, they refused to offer security camera footage to the police. I recently discovered my unit had never had an HVAC air filter installed, and indoor air quality is kind of important.

It wasn’t just repairs, though. It was also the whole administrative regime they employed, which was designed to confuse and intimidate renters. Our units are listed as having a “rent concession” off our “market rate,” which is almost twice what we actually pay. (No one would actually pay this “market rate.”) Yet the landlord illegally tried to raise rents annually based not on the rate paid but this fictional “market rate” — and continued to send renters notices of increase even after we pointed out to them that these increases were against DC case law. Tenants who forgot to pay rent only found out when they received a letter from the DC Superior Court letting them know they had an eviction case — a much more expensive endeavor for the landlord than simply calling the tenants to tell them to pay.

Intimidation is the landlord’s natural inclination. But a lot of it is bluster. As it turns out, a significant portion of the law is on the tenant’s side in DC— especially on TOPA.

Tenants Have More Power Than You Realize

Here’s the thing about TOPA: You can’t lose. (Okay, you could buy your building and then it could depreciate, but it’s pretty hard to do.) Here’s what I mean:

  • From the moment you register a tenants’ association, the process is geared towards your input. At worst, the situation remains the same — you don’t find another buyer (or don’t decide to buy it yourself), and the sale goes through on the terms originally posted. But the first step after organizing your association and registering your interest with the city is to put together a request for proposals — basically a vision of what you and your neighbors want for your community. You won’t always get what you want, but this is a chance for everyone to come together and articulate things like “We want new washer/dryers,” “A winning proposal will include more space for bike storage,” “We want a pool,” et cetera. Importantly, not everyone has to agree: It can be OK to put out a request for multiple types of development.
  • You don’t have to pay for your lawyer. There is a small group of lawyers who represent tenants’ associations in these cases. We interviewed two, and they were both great; we basically flipped a coin to decide. Both took their pay as a cut out of the final sale of the building.
  • The seller can’t lose, either. Whatever number they are in agreement with a buyer on — in our case, it was $13.4 million — they’re getting that. If the tenants decide to buy, they have to match that number. If the tenants find another buyer, that buyer has to match that number. The only way they lose is if the process drags on and they need the capital to maintain liquidity, or want the interest they’d get loaning it back out.
  • If you do want to buy your building, friendly financing is available. Tenants only have to put down 5%, and there are programs for low-income housholds to get even better deals.

Even if there isn’t a lot of demand for your building, the very act of organizing increases your power. Once you register your tenants’ association and statement of interest, you get four months to research potential alternative buyers. (There are ways you can get even longer.) In some instances, a buyer may not want to wait that long, and will be willing to sweeten the deal so the transaction can happen now.

You Don’t Have to Do It Alone

In a building sale, you and your peers are all in the same boat. From the start, you’re not alone. The association will elect a board — for example, a president, vice president and secretary — and these individuals, accountable to the tenants, might be able to do the hard work of organizing input from the tenants and liaising with the management and buyers.

Of course, some aspects of this are difficult. Not all tenants will want the same thing. But this is not so much some troublesome feature of the TOPA process as a basic fact of life. Learning to respect and navigate your neighbors’ priorities and interweave them with your own will leave everyone stronger.

But it’s even better than that. This is a complex process, and also one where lots of money changes hands. That means there are professionals who can help. Every tenant’s association is going to have a lawyer who can not only draw up documents but advise the association — and a good lawyer will have lots of connections in the development community, to whom they can shop your request for proposals. There is a small community of lawyers who specialize in TOPA sales, and it’s likely that if one is busy they will refer you to another they trust. (While our lawyer was very transparent with us, some lawyers may, with the intent of releasing a burden from tenants, take them out of the process. Be clear about how much you want to be involved.)

Moreover, the city’s Office of the Tenant Advocate was very helpful in our process. They publish resources such as this flowchart of the TOPA process (for 5+ unit buildings).

It’s Not Radical, Except It Is

It’s not radical. By which I mean: Other people have done this before. There is a system that others have navigated, and you can navigate it too. This system, while unpredictable, has some guardrails that mean the TOPA process, at least, will work for you.

And for those of us interested in systemic changes to the housing system, there are several stumbling blocks to the TOPA process that you should know about. The most obvious radical change we could have taken would have been to take the cooperative ownership route. However, when I raised this our lawyer gently rebuffed the idea, relating that coops were “very tricky” while still making clear that he would follow whatever we chose. I ran into similar ideological and practical hurdles raising the idea with the others in the building, many of whom preferred the convenience of renting. 

Moreover, the TOPA process can and does become twisted to the interests of developers. It is likely that our building, which sits in a crucible of the earlier-stage gentrification of the 14th & U area, was bought by UIP through a TOPA process that involved buyouts. Buyouts are cash offered to individual tenants to vacate the premises and TOPA rights, and effectively represent the exchange of equity–whether in a building or in a decision-making process, either way a longer-term asset–for cash. When a tenant is bought out, that can clear the way for a rise in rents above and beyond what would be allowable for a preexisting tenant. These didn’t enter into our experience, but the particular dynamic they introduce would be worthy of a separate post.

These caveats made, TOPA retains radical potential. Tenant organizing in a building of yuppies like mine does not make a movement. But for some lower-income buildings, TOPA represents recourse to self-determination in a world that otherwise ignores the right to place. And tenant consciousness in all classes seems to be on the rise in DC, through the work of the Reclaim Rent Control campaign but also the radicalizing experience of housing insecurity during a pandemic.

Even the act of organizing in my building attuned all of us to the pathways of solidarity that link all renters and tenants across Washington, DC, who share a common, adversarial relationship with the landlords who more often than not view our buildings as commodities and revenue streams rather than homes and lives. These flexion can, I hope, rehearse us for wider housing struggles. When we act we do not just confirm and strengthen TOPA itself, getting the system “used to” hearing and accounting for renters’ needs; we also change ourselves, unveiling the exploitation that atomized renters may otherwise ignore and practicing for collective action for a common purpose. Organizing under TOPA helps you make friends and influence people.

For anyone interested in the process, check out these resources, and feel free to ask me about my experience:

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