The Georgetown Spring Market 2017

What is Georgetown, DC offering this spring in terms of the 2017 rental market?

As the weather in Georgetown begins to clear up, and the warm temperatures approach the spring market for rentals and sales will come forth. With many property owners now calling to start the process of renting their property I am going through step by step the with them the potential pricing, rennovations, and what to do in order to get the best lease rates possible. 

Georetown faces some challenges as they are filled with older row homes that can need a good amount of work for DC to approve their business license. What some call "old world charm" DC calls violations. Some of these items include railings on all stair wells, overflow tanks on water heaters, flip locks on gates leading to a patio in the back. Although DC has a list of basic requirements remember that these are housing enforcement specialists. Each specialist tends to have their own specialty that they look for. 

As for marketing it is best to have your property always in the best showing condition as possible. I always stress to owners to make sure their property has a "home model" like feel to it. No clutter is very important. Prospective tenants should be able to go from room to room very easily. Our standard protocol of painting, fixing up as needed, appliances working, and full cleaning are always recommended.

Georgetown offers a wide variety of pricing. A small interior row home can start around $3000 a month. As you get into the mid size row homes that number will move quickly into the $4000 range. End units, and row homes with parking will sit nicely in the $5000+ market. Those typically have large outdoor space, covered parking, and 3-4 bedrooms. 

A question I get asked by owners in Georgetown is regarding students. Georgeotown University is located inside of the city/town of Georgetown so students often start their search for the summer in January. To date I have about 15 calls/emails already for housing for the summer months leading into September 2017. So what can an owner do about students. Technically not a whole lot. If a student can provide source of income meaning through a trust fund, a legal guardian, friend, or bank account there is no reason to deny them. Although they may not produce a credit score due to lack of credit that can not be used to deny a student or anyone else. So how does one handle students in property management?

With my online systems parents are able to pay directly online so there is no issue with payments. Years ago we would have to collect checks from each student which was a nightmare. Our software allows each parent to have their own access and make their contribution monthly. So financailly things are easier. Addendums to the lease are very helpful as well. I have addendums for everything from parties, drinking, and some others that owners have had me draft over the years. Fortunately Georgetown University has ties to landlords making the school involved in student behaivor. Any reports from property management, and or the police are also sent to the school. Overall there have been very few times that I personally had major issues with students.

In an upcoming blog I will talk about some points that tenants should ask their landlord or property manager prior to signing a lease. DC has very specific rules and laws regarding tenancy. It is always best that a tenant understand what they are prior to moving in.

For more information please contact at info@bclmgt.com

New Agents Entering The Real Estate Business

Are new agents really prepared for this business after they pass their exam? Are they informed about how much time and money is vested into the business just in your first year? Do brokerage firms really spend the time training and giving hands on experience in that first year?

Is this business too easy to get into? Should there be more training or requirements for agents to enter? Over the past year I have seen an influx of new agents coming into the business. Heck in the last week I had two different agents showing two different properties that did not notify me there was an issue. One left the lockbox wide open because they could not figure out how to close it. The other thought they locked the front door but did not and the door was wide open when I got there. I can’t imagine a seasoned agent doing such things.

In my opinion this business is way too easy to enter. Taking a 60 credit hour class and followed by a short test should only be the minimum requirements. So how do we as agents and brokerage owners change this? Is there another way that agents can get trained and succeed? I don’t have the ultimate answer, but maybe someone reading this has some further insight.

In no way do I feel they don’t deserve to be agents, or have the opportunity to be successful in this business. However coming into the business with really no knowledge or experience and trying to create an income from nothing is extremely hard. It can take a long time to get your first client and that’s from an agent working extremely hard to get there.

The most successful people I have seen in the business have worked for someone for years prior to going out on their own. To me this is the best training. It is what I did as well. Attending seminars, and watching videos are fine. Listening to speakers and motivating you is also ok. However real world experience is the best way to understand the day-to-day operations of running your own real estate business.

In the past I have heard this line over and over again from both new agents and what I call seasoned agent jumpers.  This is the biggest line of them all in real estate. Ready for it…..

“This company is not doing anything for me. The broker only focuses on the agents who make money, and nobody is doing anything to help me.” Another firm promised to give me tons of leads the second I get there.

Both the agent jumper and the newby have the same line. I bet you can think of at least 1 or 2 agents that you know who have jumped from one firm to another and heck even back to the original firm. Nobody did anything for them!

Well I would tell that person you are probably not in the right business and to move on to something else. But they don’t. They become that 1 percent who sits in the meetings and complains.  I heard an agent state one time at a meeting that in a room of 50 realtors it only takes 1 negative person to make the entire room negative. I can definitely see that in some cases. Why? I think because it is easier to pick at a problem rather than solve it. Its easy to complain the company is not doing anything for you when your not making money. It is human nature to point blame at someone or something else when personally not succeeding. Everyone does it at one point in there life. It is those who can admit the problem, evaluate the issue, and form a plan to meet their goals and ultimately succeed.

Don’t overanalyze things either. I have experienced this before. No broker should have to sit with anyone for hours formulating some mega plan on how to succeed in this business. This is a business of trial by fire. You need to try numerous approaches with marketing before one works for you. Not everyone can cold call. Not everyone wants to send postcards. Do what works for you which takes time to find.

So what does make a successful agent? Well for starters not complaining. Its all about the can do attitude in this business. That’s typically an entrepreneur’s attitude. No task too big basically.

When I started my company I did not know if I was going to expand out to bringing on agents. However I do feel there are benefits to this. My plan is to take on 5 agents in 2017. That’s all just 5. My goal is to work with them on strategies, online marketing, and give them higher commission structures to help maintain their advertising budget. Placing a percentage back into marketing from every deal they do. Almost forcing a building process. I built my business in one year from the ground up and it over tripled in size in one year. Yes I had 11 years in the business, but that is different than building a new brand and company from scratch.

So I want to share with these agents is how I did it. I am not asking for anything other than hard working agents who want to produce. No desk fees, no transaction fees, no franchise fees. My believe is that if I can help create the success the agent will want to stay and continue to grow.  I mean really how is an agent supposed to pay fees to a brokerage company on a monthly basis when they are brand new or not making money. I would never sign up for that as an agent. I don’t care how great a pitch it is.

If you do read this post and you are interested in having a quick chat with me feel free to reach out via email. If not that fine as well. Whether you are licensed in DC, MD, or  northern VA. I am happy to speak with you.

Looking forward to working with many of you out in the marketplace this coming spring.

 

Airbnb Bill Proposed By DC Council

Washington DC can be one of the most challenging places for a property owner to become a landlord. 

New innovations that have come forth from the Internet are challenging those laws set forth by DC Housing. Landlords in DC are required to file for business licenses, maintain records if under rent control, have properties inspected, follow TOPA laws if they sell, and are subject to hefty fines if a tenant calls upon a DC tenant representative ( which is free for tenants ) if found in violation of something in the property that has not been attended to in a timely manner. Example would be a HVAC system not working and the landlord refusing to fix or replace. 

As Airbnb started making footsteps into DC not too long ago various issues have come forth.  Landlords and even tenants jumped on this opportunity to fill vacancies at premium profits for short-term periods of time. 

However there is a fine line in DC with landlord tenant law, and DC regulations onto what is considered a tenant, and what is considered a paying guest. There are rules regarding squatters rights, adverse possession, the exchange of money from "tenant" to landlord, and selling rights that tenants obtain during the process of sale.

Right now Airbnb and DC are trying to come up with a solution to minimize the landlord being able to take advantage of their hotel like system. From what I understand there have been landlords in DC that have multi- family buildings of 15-40 units that are border lining on running their building like a hotel. Using airbnb as its main source of guest traffic. Because they are not signing leases and just coming and going DC is concerned about the abuse of this process in the long run. It basically goes against everything DC landlord tenant law stands for. Landlords without a hotel licenses and or zoned as a hotel should not be able to rent out individual units on a ongoing basis for short term periods of time without a lease. 

The argument comes into play, as there are some management companies that specialize in short term corporate rentals. However those candidates are screened, have leases that are signed off, and are given the landlord tenant guidelines pamphlets when moving in. They have an understanding and expectations of the law from the start.

The bill that is being proposed is consisting of fines ranging from $1000-$7000 depending on how many times the landlord is not being compliant. Hotel owners in DC are also concerned as hotel bookings are down due to many using the airbnb platform. 

There are many challenges in a jurisdiction that is so heavily driven on landlord tenant rights. 

I have personally been asked by tenants to rent out space as a sublet by finding people on airbnb. The quick answer in my company is no. Until some actual rules, and laws are established in DC those that want to sublet must go through the approval process with our company. 

Airbnb is leaving a lot of openings for their customers to gain tenant rights in the District right now. 

For example. Lets say a tenanted property that has a group of 4 working professional’s needs to fill a room for the next month. During that month period the owner decides that he wants to sell the property un-expectantly. The tenants are on a month-to-month lease and the owner is going to follow TOPA laws with their agent.

However the owner of the property did not know that the tenants were secretly renting out a room in the property and profiting from it. With this scenario there are now two problems. The first being the tenants are in violation of the lease by profiting from renting out space in the owners property. Secondly depending on how long that new person has been living there they may have acquired some tenant rights. Length of stay and possible exchange of money can start that process of gaining tenants rights in DC.

Does the landlord now have to serve TOPA rights to the airbnb client? That’s the confusion at this point. Even if they did not serve that person rights under TOPA laws the actual tenants are allowed to sell their rights to a third party for as low as a penny if they want. So lets say 1 tenant out of the 4 sold their rights to the airbnb customer. Now you have 3 other tenants and one airbnb customer all with tenant rights for the sale of the property. As you can see this now creates a long and drawn out legal process for the landlord that can become very costly.

As there is no instant eviction in DC the tenants must stop profiting from the client of airbnb with a 30-day notice to cure or quite from an attorney. However that does not mean that person must move out. If that client was savvy enough and now has gained rights by the purchase of TOPA you now have a non paying new tenant with rights that can hold up a sale for up to 180 days if they wanted. 

Do I think airbnb is a good idea on paper? Yes as was Uber, and other .com ventures, however both take away from professionals like taxi drivers, and landlords that must spend thousands on licensing to be sought as legal under their state guidelines. So in states and jurisdictions where landlord tenants rights are prevalent I think there should be something that Airbnb should come up with along side  DC Housing to create a fair system. Right now Airbnb is not showing signs of doing that. 

 

For all questions please feel free to email at barry@bclmgt.com

www.bclmgt.com

Rennovating A Rental Property

Often I go into rental properties with new clients and we have to do some work to prep the property for the market. As most owners dont want to spend a ton of money for a rental there are some tips and tricks I learned over the years. One of the most important things you can do for your property is make sure you have a fresh coat of paint. Painting is one of those items that can become personal due to room colors, furniture and so forth. The best thing that an owner can do is paint their property a neutral shade.  Here are some color paletts from Benjamin Moore that I like. Years ago it was all about the off white shades. Now I am seeing more and more tones of gray coming into play. They work nicely with most furniture and dont leave such a sterile feeling in the rooms. 

Accent walls are usually a question or concern. An example of an acccent wall is having 3 out of the 4 walls in a room a nuetral color and the 4th wall bright red for example to go with the furniture. I often get asked what should we do? My answer is typically leave it for the time being as long as furniture is being left in that room for marketing. If the property is going to be left vacant I would highly consider re painting that wall to match the rest. Consistency is the name of the game in rentals. The less questions the tenant prospect askes the better when it comes to "what is the owner going to do about that".

Flooring is always an interesting conversation. Owners ask do I install new carpet, or wood floors? First if you have carpet already and it looks in good shape I would have it professionally cleaned and leave it. For most condo buildings I feel that it reduces noise for neighbors. Wood aesthetically looks better but can be pricey to remove the carpet, level the floors, and place new wood floors. Although this investment can last a bit longer than carpet. It can make a room feel larger at times, and cleaner as well.  If your planning to go with wood floors there are now many options one can choose from. A true hard wood is very expensive. I wiould stick with the engineered wood or a laminate for rentals. Both work just fine and they look just as good. Every year those products continue to look and even feel better. A lot of laminates now even have etching in them to give that weathered look. Some of my favorites are bamboo strand. This is one of the toughest surface engineered woods around. This wood comes in a variety of shades and can be installed as a floating floor or nailed down. 

Bathroom upgrades are a must these days. That 1940's green tub that sits in these old world homes needs to go. I know some people are historic and like old world charm but its just not my taste. Modern clean lines are what the younger generations are going for. This is a great example of a bath that is not overly done but on the inexpensive side. Home depot is one of my favorite stores and you can make your property look great for not a lot of money. Even less if your willing to do some of the labor yourself. 

Kitchens are typically the main focus area in a single family home, or condo. In a rental property there are ways around making a kitchen look good on the cheap. The best way is to use laminate countertops instead of real and costly marble or granite. They wear pretty well and you wont have to worry about a piece of marble cracking. Another way to tone up the kitchen is by using tile backsplashes. Using an accent color or even a neutral color is a great way to make your kitchen look that much better. Re paint or stain your exisiting cabinets. You can even re face them if needed. 

With rental properties the name of the game is typically look like you have more for less. The less questions that are asked by a prospective tenant will increase the chance of them saying yes. You want to avoid tenants asking for items to be done prior to move in. This creates an opening for negotiation on rent. Place your best foot forward and price correctly.

Happy Renting

www.bclmgt.com

Contact us today for your leasing & property management needs.

What Qualifies Property Owners For Rent Control? What Are The Exemptions?

Who is under rent control?

LLC's - Yes
Inc.- Yes
Trusts - Yes
Corporation -Yes

Sole Proprietor - Not under rent control. natural person who owns no more than four rental units, provided the rental units are registered as exempt.

If you are under rent control you need to make sure your filing the proper forms with DC and your tenants.

Is there a difference in increasing rent with a current tenantrather than when a unit is vacant and being marketed? Absolutely and by how much?

Contact us today to find out more about our services and the latest in DC rental control laws. 

Single Family Investment vs Condo vs Multfamily Investment in Washington DC

BCL Properties has a variety of properties in our portfolio. They range from single family, condos, and multifamly. As the owner of the company I often get asked what is a better investment. A condo, single family home, or multifamily. An answer to this question varies for many reasons. Affordability typically being the dominant reason. There are benefits to all three. 

In condominiums you can face several obsticles. Lately in Washington, DC move in fees have become a way for buildings to make extra money. Especially if the building is geared toward investors. With increasing move in fees you can get hesitation from tenants to move in. I have seen move in fees upwards of $1000.00 in some buildings. I would say on average move in fees range from $200-$400. Some buildings even have an additional move out fee. Yikes! The problem is if the tenant likes the unit they often dont want to pay the move in fees. So many of my owners pay it for them. On a positive twist this technique is a great marketing tool as an incentive for tenants to view your unit. Some buildings limit the amount of rental owners as well. Buildings can have percentage stops that only allow up to a certain amount of rentals in the building. So that is something your agent should make a client aware of prior to purchase. Another issue condos face are assessments. You typically know months in advance that one is coming, but that takes away from your bottom line of profit. Dont forget the ongoing monthly condo or HOA fees that tend to rise over time. 

There are however advantages of condos. The first being they are typically more secure to an extent then a single family home. Generally the buildings have electronic access FOBs, desk reception, and so forth. Generally you can rent a condo in DC pretty quickly. Less than 45 days on the market if priced correctly. Condos if well taken care of usually have less repairs over the tenancy then single family homes.  For example in a one bedroom condo besides an appliance breaking, or HVAC system not working, alot of the structural items can often be the responsibility of the building owner. Leaks comiing from other units into your unit is usually the biggest problem I see. Typically the owner who caused the leak has to pay for the repair. 

Single family homes have their own set of positives and negatives. Time of year plays a bigger role on renting single family around Washington, DC.  Tenants wanting a 2-4 bedroom property may have kids and will want to move once school is out. So there is a limited time for agents and owners to get their property on the market. Usually spring and summer. By the fall most familes are settled for the year. Areas around Universities can attrack student homes. Those homes can have significant wear and tear over a tenancy.

I have found that single family homes over the long run can generate larger increases in rent over time. I think the reason I have seen this is because a number of single family homes around the DC area often comprise of multiple tenants.  Homes are generally larger in size giving the owner a reason to charge more, and or the home is in a desirable school district or development. Single family homes can take more wear and tear. Tenants have more responsibility like a true home owner does. Ex. gutter cleaning, grass mowing, shoveling snow etc... Although with long term leases I have seen some amazing rental properties transform into beautiful homes for tenants. Tenants tend to think of a house more as their home so they want to take care of it. Most single family homes rent out longer than a year. Some tenants I have had have been in their property for over 10 years. So I find for more stable long term leasing single family is a better option. Most condo leases in DC range about 16 months on average.

My favorite out of them all is multifamily. I believe that a good multifamily building ranging from 5-25 units can generate a great positive income for a long time. Even when one unit is vacant the other units are still generating income. So there is not a total feeling of loss of income. Generally repairs range in line with condos. Rents can be set around the same price points as condos as well. Having your 5 to 10 units all in one location is a huge benefit both for obtaining new tenants. People have most likely seen the building or may have friends that want to live there once another unit opens up. The transitions of vacant to rented in my opinion are easier. As for re sale purposes mutlifamily buidlings are typically well sort after by investors.

For any additional questions, or comments feel free to reach out to us.

BCL Properties a full service management and brokerage company. For more information please visit our website at www.bclmgt.com

or call 202-255-0045 

Winter Update 2017

So far the winter is holding up better than expected. With an increase in showings around downtown the rental market remains fairly stable. Prices right now are still in winter mode. Meaning an owner should expect at least 1-2 price reductions during the marketing process if pricing started high. Property owners need to be aggressive during this process unlike spring and summer months. The demand is always less as leases tend to come up for renewal around May. 

This winter I am finding an increase in owners wanting to do furnished rentals. This maybe due to last minute assignements overseas or wanting to leave DC quickly. As I currently have 2 lisitngs that are furnished most prospective tennats still prefer unfurnished. The furnished market is a niche market and short term housing companies do well flipping properties every few weeks. Owners have attachments to their furniture as they should. But just because they like it does not mean the tenants will. 

My suggestion to property owners weighing on the decision of placing their unit on for rent is to take some time and stage the property so it looks the best it can. First online impressions can make the difference between obtaining a lead or not. 

Some quick tips for making the property shine are:

- If vacant and the property has not been painted in some time a fresh coat of paint goes a long way. There are a ton of painters looking for work so pricing should be farily competative. 

-No clutter on countertops. Clean minimized counters are best.

- Professional cleaning is the most important. The property should not only look clean but also smell clean. No mold or mildew in the showers, or bathrooms. Carpets should be shampooed. Wood floors buffed. 

- HVAC filters should be changed out prior to a new tenant coming in. I have found that if the owners provide some filters to the tenant they are more likely to change them.

-Make sure your DC business licese is up to date. 

-When taking pictures use wide angles. Dont take a picture of the corner of a bedroom. Broad wide shots work best. 

In the Washington DC area winter generally hits hardest in February and March. So the next two months will be a test of just how strong rentals will be during the winter months. 

Property owners that I speak with are already prepping for spring. We are getting the properties rennovated, and ready to be the first out of the gate on the market. 

Seasonal Change Brings Stress to Vacant Property Owners.

For those landlords having to rent their property between November and January should understand that there are challenges that come with this time of year.

Ex. Rentals do better when people are out walking around. Especially in areas like Georgetown.  So weather is a huge factor.

Ex. Demand now is less as most tenants are settled through the New Year.

As per previous blog posts DC is a very seasonal rental market. I can almost tell to the day when the market shifts from very aggressive to moderately busy and then to slow. Sometimes landlords can’t control when their rental comes up for vacancy due to the month -to -month laws for tenants. So I must work with what is given.

So what are some things you can do to help with re marketing in the fall/winter months?

What are the benefits of taking that lower price even though it’s not exactly what you as the landlord want?

Landlords I find like anything else in the world become accustomed to a particular amount of money each month. But like life everything can and does change. The rental market although fairly strong in DC can shift up or down at times. That comes mostly when the seasons change. As a property manager one of the most challenging things I face when talking to landlords is price points. In the summer it’s usually a very pleasant conversation. In the fall and winter it can be a struggle.  Landlords always have a price in mind. So I ask?

What number are you looking to get on the rental? The question places the owner in the driver seat. This lets me get an idea of how realistic their number is or if they are “dreaming”.  Getting $3000 a month for a studio is just not going to happen. Typically most owners are fairly realistic and within the price points.

One issue I do contend with is unhappy owners. This is simple because for the entire summer their property did not sell. Now they are faced with a mortgage payment with no way to offset it. Their voices are frazzled typically and want their place rented tomorrow.  I do my best to  coast them through this new process for those who never experience being a landlord in DC. Then they typically get more upset. J But that’s what my company is here for. Let us do our job so you don’t have to worry about it. Laws, regulations, TOPA, tenants rights, and more.

So lets go back to some quick tips that will help your rental get moving in the marketplace.

1.    A good rental agent will continue to check the MLS and additional websites to see what the competition is. Every few days I continue to check the market to see what is rented, has an application in or still active.  This gives me the most knowledge of the current market when I speak to a client. Knowledge is power when listing property.

2.    When speaking with a new client in the fall or winter I warn them upfront that the price point they desire maybe a stretch during this time of year. I set a time line of reductions over the course of the listing. That way they know on “this date” we go from this price to that price. Then another 20 days we reduce again and so on. Typically 1 price reduction does the trick. Its upfront and no feeling of surprise for the owner.

3.    The unit itself has to and must show in “model” form. I have found that trying to rent a unit with a tenant living there can have its challenges. If the tenant has not taken care of the unit and is messy it will make the rental process difficult.

4.    PAINTING: PAINTING : PAINTING. A fresh coat of paint goes a long way. Now for larger homes that becomes expensive. So try to enhance the best rooms possible. Kitchen, entryway, and living areas.

5.    Incentive marketing. I have found this works wonders when competing with a listing similar to mine. Incentives can include rent reduction, move in fees paid by owner, last months rent free, a paid for professional cleaning during the tenancy. Something that makes the listing pop out.

6.    Appliances must be cleaned out and spotless. (Tenant’s use this to cook food). You can’t have grease stains all over the oven and moldy food in the fridge.

7.    A full property cleaning prior to marketing always helps. Carpets shampooed and wood floors shined up.

Owners should anticipate spending money to get the property back to marketable condition.

 

Taking that lower price! Ouch!

 

Well its not so bad. The property needs to be kept up especially in the winter. Having a tenant in the property and using the water, bathroom, and so on helps keep the property keep going. Too many landlords want to wait for their “price” but end up with frozen pipes and a large bill when the pipes burst. There goes your extra profit! I have seen it time and time again.

 

The idea behind the rental game is to look at the property as in investment. With each turnover taking a price percentage increase if possible. Keeping the property is great shape will reduce the major overhauls down the road. Don’t skimp out on the little stuff. Tenants notice when a landlord keeps the property up to date and clean.

 

My advise for the winter is to start marketing as soon as you can. I try to be aggressive with advertising. Create a buzz about the property with social media. Sharing the listing with agents that work with renters.


To find out more just visit my website at www.bclmgt.com

 

Happy Renting!

DC (TOPA)- LOOPHOLE FOR TENANTS? ARE TENANTS MAKING MONEY FROM THE SALES PROCESS?

October 28, 2016

(TOPA) short for Tenants Opportunity to Purchase Act has always been an exhausting and drawn out process for landlords. Any landlord that has been through this process or considering selling with a tenant in their property is not in for a quick sale. With these rights tenants gain the first right of refusal to purchase the property along with the ability to sell their rights for as little as a penny to a third party. 

Working in property management I have found TOPA once understood to be a formality that I run into a lot due to my business of property management. In a nut- shell it’s basically a time line for tenants to act on the opportunity to purchase. For specific questions feel free to contact me at barry@bclmgt.com. Building owners do have a bit more complex set up for TOPA as they have to initiate the paperwork to every tenant in the building followed by a different set of timelines and rules.

As TOPA laws continue to affect the ability to go to settlement an agent must understand the proper procedure of filling out the paperwork as well as how the forms are delivered.  Tenants can actually make this process long and strung out if they want to. Tenants have the ability to hold up the sale up as much as 180 days if all their rights are used. As stated above they can also sell their rights.

However more and more tenants are finding this loophole as the title of this blog states. That is CASH FOR KEYS. Over 11 years of managing property and brokerage I heard of some owners trying this, but I never really thought it was kosher. Well I learned something new. After speaking with a DC representative in the office that represents/advocates for landlords (202-442-4407) I was actually taken back that it is ok. I specifically asked if it is legal and the representative said yes.  As I researched this a bit more I was finding articles, and forums online that tenants were making a good amount of money on this. Not shocked there. 

I pose the following questions to DC Housing?

1.     Should there be a max amount that is regulated by DC that a tenant can ask for?

2.     Is this giving tenants too much power and leverage on a property they don’t even own?

The process is as follows.

A tenant is still issued TOPA rights as normal. However during the TOPA process the owner can offer tenants a cash buyout to sell their rights back to the owner in turn for a set move out date and return of keys. The TOPA rights then become null and void. I asked if there is a ceiling on the amount of money the tenants can ask for and I got a simple “nope” from the representative. As long as both parties agree to the amount it is considered a deal.

Remember landlords that if you have roommates or a group house each tenant must be issued TOPA rights. So if there is more than one tenant in a property the cash offer must be issued to each individual. Not a group deal. Once the tenants agree with the landlord on a price the tenants must issue a brief statement in writing to the landlord indicating they agreed to cash for keys and are selling their rights back to the owner for the agreed amount. This voids out TOPA and creates a firm move out date.

Can a tenant make some extra money on the deal? Absolutely! For a landlord to consider a buy out he or she would have to weigh the cost of the buyout vs. selling with a tenant in the property. If the owner knows that renovations need to be done, staging placed, and knows the chances of a sale increase dramatically when vacant then yes it could very well be worth buying out a tenant.

My advise to any landlord is to make sure you have an experienced agent/broker representing you when tenants are still living in your property. Most major settlement companies in DC are asking to see the TOPA forms to be able to settle the sale of a property. I have heard horror stories of clients being at the settlement table when the attorney would not close the deal because TOPA was not issued. You can only imagine how the buyer and seller reacted to that. Remember DC does have a 30 day notice to move out. TOPA does not guarantee that the tenant has to be out at time of settlement. TOPA is purely for the tenants right to purchase. Not a notice to vacate.

So how do you get the tenant out of the property?

I plan on going into more depth on how to sell effectively with a tenant in a property and going over the actual forms one by one in a later blog post.

Going over TOPA FORMS A,B,C.

For any questions please feel free to contact me directly Barry@bclmgt.com or by phone at 202-255-0045.

Visit us online at www.bclmgt.com