What do tenants need to do to buy the building?

To buy the building, tenants need to follow three steps: First, they must register their interest to buy with the city and owners. Second, the tenants and owner must negotiate the price and terms of the contract. Third, once the contract is signed, there is a time period before settlement during which tenants look for financing and arrangements are made for the settlement date.

Step 1: Registration (30 days)
In a building of this size, tenants cannot purchase the building unless they are organized into a tenant association that represents a majority of the households in the building. If a tenant association already exists, it must register tenants’ interest in purchasing to the owner and the city within 30 days after receiving the offer. This registration application must be notarized and include:

1. A written statement accepting the owner’s offer to sell the building
2. A list of tenant members representing the majority of the heads of household in the building at the time of registration
3. Information regarding the elected officers of the Tenant Association
4. Copies of the tenant association articles of incorporation, certification or incorporation, and the bylaws

Step 2: Negotiation of Contract (120 days)
Once you’ve registered your interest in purchasing, the next step is to negotiate a contract with the owner. We have 120 days to do this. While we don’t need to prove financial ability to buy the building at this stage, we will likely be required to make a deposit of 5% of the agreed purchase price as a “good faith” sign of our intention to buy. If we are ultimately unable to raise the money to buy the building, the owner must return the entire deposit. Several organizations are willing to loan tenant associations the money to make the good faith deposit.

Step 3: Settlement (120 days)
Once you’ve signed a contract to purchase the building, the next step is to get a loan or other financing to actually purchase the building. We have at least 120 days to secure this financing; the time period may be extended under certain circumstances.

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Why would tenants be interested in buying the building?

When tenants own their building (either by themselves or together with a developer), they control the decisions on how to run the building.

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Will I have to contribute money to the Tenant Association? Why?

From time to time, the Tenant Association will ask members for a voluntary contribution. This money goes to covering costs such as our lawyer, making copies of flyers or documents, and organizing events. We are not asking for contributions at this time.

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How can I join the Tenant Association?

If you would like to join the Tenant Association, please send an email with your name and apartment number to 1500MassAveTenantAssoc@gmail.com. Please note that joining the Tenant Association does NOT mean you are indicating an interest in buying the building. That is a completely separate process.

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Why is it important to have a Tenant Association?

The Tenant Association is the best way of guaranteeing that tenants are involved in the decisions that will affect them. By participating in the Tenant Association, you increase the chances that your interests will be heard and taken into account.

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Why should we exercise our right of first refusal?

1. Competition. Through a competitive bidding process, the tenants have leverage and can negotiate with bidders to tailor an agreement that is of mutual benefit to the bidder and the tenants.
2. Value: If the building is sold and the units are converted into condos, the tenant may be offered a lump-sum to move out of the apartment unit. Likewise, if the new owner wishes to increase the price of rent substantially, he/she might offer a tenant a lump-sum to vacate the unit so they can renovate the unit and charge more to the next renter.
3. Opportunity: Only by exercising our right of first refusal will the tenants have leverage with the buyers. By having a seat at the table, we have an opportunity to negotiate a contract that represents tenants’ best interests.
4. Fairness: The District’s tenant laws level the playing field between the tenants and major corporations that control many of the city’s largest residential buildings. Corporations and individuals do not always have mutual interests and the District’s tenant laws empower the people to legally represent their interests.

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If the tenants purchase the building, are we obligated to purchase our unit?

No. The Tenants Association may bargain with creditors to preserve rental availability in the building by establishing a part rental/part condo agreement. Moreover, at least half of the buildings residents must vote in favor of the establishing a condo, cooperative or dual rental/ownership agreement.

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Will the rent increase more if the landlord makes capital improvements to the building?

Yes. There are some circumstances under which landlords may petition for a higher than usual rent increase. For example, a landlord can ask for a “capital improvements increase” to cover the cost of improvements beyond ordinary maintenance and repair (e.g. replacing the roof or elevators in the building, or replacing the heating system or window frames in individual units). Increases to cover the costs of such improvements cannot be more than 15%-21% higher than the original rent, can only be implemented after all the improvements have been completed, and will only be in effect long enough to recover the costs of the improvements. Low-income elderly or disabled tenants may qualify for an exemption. Landlords can also ask for a “service and facilities increase” if they substantially increase services or facilities (such as building security or laundry facilities). Tenants have the opportunity to challenge such increases.

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Will my rent go up?

Possibly. Under DC law, landlords can raise the rent each year to keep pace with inflation. For most tenants, this increase will be at least the Consumer Price Index (CPI) percentage plus 2 percentage points (the increase for tenants who qualify as elderly – defined as at least 62 years old – or disabled may be less). If a landlord wants to increase the rent more than this, he/she must provide a justification to DC officials.

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Will I be forced to leave?

Probably not. Under DC law, your landlord may evict you only for a couple of well-defined reasons. This process is not simple and you must be notified in advance. The most relevant reasons and tenant rights in the current context are:

• Sale of the Apartment: Your landlord must give you at least 90 days notice if they sell the apartment to someone who will live in your apartment. However, your landlord cannot use this reason unless the landlord gives you the first chance to buy your apartment.
• Conversion to a Cooperative or Condominium: Landlords must give tenants a 120-day notice that they wish to convert the property to a condominium or cooperative. In order to convert the property, there must be an election or vote, and more than 50 percent of eligible residents need to vote in favor of conversion. Even if the conversion vote is successful, the landlord cannot evict you unless you are first given the chance to buy your apartment.
• Unsafe Renovations: If your landlord wants to make renovations to your apartment or building that cannot be done safely while you are living there, he/she must give you at least 120 days notice and justify the eviction with the city. Once the renovations are complete, you have the right to return to your old apartment, at the same price and under the same obligations in effect when you were evicted.
• Discontinued Housing Use: You can be evicted if your landlord wants to discontinue renting your apartment. Your landlord cannot use this reason unless he/she first gives you the chance to buy your apartment, and you will have 180 days notice after the expiration of the tenant purchase rights. The landlord cannot use the apartment for any purpose for one year following the date you move out.

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What does this mean?

When a landlord wants to sell a building, tenants must be notified. As tenants, we have a choice: we can either do nothing and see if the sale goes through, or we can exercise our “right of first refusal” under DC law, which gives tenants the right to match the offer that has been made and buy the building.

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