DC Real Estate Law Update – March 2018

In Real Estate by Richard Bianco

There were several significant happenings this month in the world of D.C. Real Estate. Right off the bat on March 1, the Court of Appeals came down with a ruling that impacts the priority of condominium liens. (details below) Not to be outdone by the Courts, the Council amended TOPA to exempt single family accommodations and is considering a rollback of the much-decried bankruptcy exception. Additionally, there are a number of upcoming programs and events to help you stay on top of the changes.

Posts & Analysis

Condo Board Eligibility: Can Spouses Serve Together? Substantially all bylaws contain provisions that set forth who may, and who may not serve on the Board. What happens where co-owners of the same unit both want to be Board Members? Unless the Bylaws prohibit simultaneous service, it is likely permissible. Probably a bad idea, but allowed nonetheless. [read more]

New TOPA Amendment Exempts Single Family Homes. The forty (40) year old statute was originally adopted to prevent tenants from being displaced and to promote affordable options in a climate of disappearing housing stock. After their study of the issue, the Council decided that the statute was no longer serving its dual legislative purposes as to single-family homes. Subject to a final vote, in most cases, TOPA will no longer apply to single-family accommodations. [read more]

Changes to Condominium lien priorityLiu v. U.S. Bank a big deal? No. It is not. Let me clarify. The March 1, 2018, Court of Appeals decision is a huge deal affecting a very small number of cases. Here is the quick and dirty version. In 2014 the Court of Appeals held that where a Condominium Association foreclosed on six (6) months or less of assessments, the foreclosure automatically eviscerates the first trust mortgage. Chase Plaza Condominium Association v. JP Morgan Chase Bank, NA. In Liu, the Court of Appeals went further. The Court held that US Bank’s first mortgage was wiped out by a 6-month foreclosure, even though the terms of the sale expressly stated that the foreclosure was “subject to” the first deed of trust. This is a dramatic win for purchasers who bought 6-month condo fee foreclosures with the “subject to” language in the terms of sale. However, most 6 month foreclosures, did not include such language. The Liu court expressly declined to decide the question of whether a condominium fee foreclosure of more than 6 months wipes out the first trust. We’ll have to keep waiting for that question to be answered.

News & Events

TOPA Talk: On April 11, 2018, at 10:00 AM, DHCD continues its ‘Nuts and Bolts’ series with an informational session about the Tenant Opportunity to Purchase Act. I’ve attended ‘Nuts & Bolts’ sessions in past and they are a really great way to gain some insight and background. You won’t learn all of the secrets in one two hour session, but, it’s a good first step.

Rent Control Documentation Workshop: April 12, 2018 at 12:00 PM. The Rent Stabilization provisions of the Rental Housing Act are a confusing mess of forms, documents and disclosure obligations. In this program, DHCD tackles the ‘top four’ Rent Control documentation issues. Should be a real snooze fest-but, it might save you money in the long run, which seems like a worthwhile way to spend a couple of hours.

D.C. Government is Closed on April 16 for Emancipation Day, that means NO construction can be performed.

DISB the rarely used (in real estate circles) DC Government Agency charged with oversight of the non-judicial foreclosure mediation program has moved offices. DISB’s new address is 1050 First Street NE, Suite 801, Washington, DC 20002 I hope that you have found this content beneficial and if you have additional questions about these or other real estate issues please, visit my website – book a free case evaluation with me – or simply contact me and I would be glad to set aside some time to speak with you.