Legal Q&A: Rentals

Q: I have a rental application from three working women (in their 20s) who are not students. The house for which they have applied was left in meticulous condition by the owners, who will be returning in three years. Am I required to rent to them?

A: One of the many protected classes in human/civil rights law is the sex of the party. I would be very careful in rejecting them, unless you can find other reasons -- such as financial. And (although not a statistical fact) from my own experience, I have found that women are less likely to cause problems in a rental house than are men. You have the right (and should) put a clause in the lease giving the landlord or his representative the right to periodically inspect the property on reasonable notice.

Q: I have a property that is listed as both a rental and a for-sale property. I gave a verbal agreement to rent the property to four prospective tenants who have a “guarantor” who lives out of state. The signed lease has not been submitted yet, but I expect it will come in shortly. A check for the first month’s rent has already been submitted (not cashed). In the meantime, a prospective buyer has expressed interest and wants to put a contract on the house. The Seller has said that he would “much rather” be a seller than a landlord. What are the legal obligations to the prospective tenants?

A: This is a very sticky issue. When you say “signed lease,” do you mean that the seller/landlord signed the lease already or only that the tenants signed (or will sign)? While verbal agreements in real estate are not binding, the tenants could argue that they relied on the arrangement and that they did everything in anticipation of leasing the property. The owner could be tied up in court for a long time, even if he is in the right.

Discuss this issue with the tenants, and perhaps the seller can give them some money to go away. Otherwise, (and while I am not absolutely positive about this) I would keep the tenants. A difficult issue and there really is no right or wrong answer.

Q: My client owns a condo which she leased to two female tenants. One of the tenants was incapacitated in an accident and moved out. Her parents continued to pay her share of the rent and then sub-leased the unit to a new tenant. The lease has now expired, with one sub-leasing tenant and one of the original tenants. The owner wants to put the unit on the market and already knows that neither tenant nor subleasing tenant wishes to purchase the unit. Has the owner fulfilled Right of First Refusal?

A: First, under DC law, the fact that the term of the lease may have ended does not mean that the lease is terminated. Tenant’s literally have “life estates” in property. So long as they are paying rent, they remain tenants. There are several ways that a tenant can be asked to vacate, but most of these require written notice (in both English and in Spanish) as well as possible Court action.

You have to provide the Tenant Opportunity to Purchase Act (called “TOPA”) notice to all tenants and subtenants who are still paying rent. There are two forms: (1) with a third party contract and (2) without a third party contract. I would recommend using the latter, just to start the lengthy process.

Q: Where can I find the “right of first refusal” language landlords are required to provide to tenants?

A: Your broker (or your company) should have this information. You can get it online at GCAAR.com. The language is also included in the tenant opportunity to purchase (TOPA) notices available at the District of Columbia rental office, 941 North Capitol Street.