Outcome: Millions of dollars in settlements
Our firm was a pioneer in protecting tenants from sales transactions that were engineered to avoid providing tenants with their statutory rights of first refusal to purchase their buildings when sold by their landlords. In the numerous cases we litigated, we were responsible for the highest number of payouts and largest dollar amount payouts to tenants in the District of Columbia under the District’s Tenant Opportunity to Purchase Act. One such case is described below.
Confidential Settlement after trial jury award of $180,000 in damages and attorneys’ fees
In a tenants’ rights case, Tycko & Zavareei LLP (TZ) successfully represented a tenants’ association against Smith Property Holdings, L.P., concerning the ownership transfer of the Alcazar apartment building located at 1841 Columbia Road, N.W. This case centered on alleged violations of the District of Columbia Rental Housing Conversion and Sale Act of 1980 (the “Sale Act”), which mandates that tenants be given a right of first refusal in the event of the sale of rental properties.
Smith Property Holdings decided to sell the Alcazar building in 2003 for tax reasons. A complex multi-step property transfer was initiated, involving several entities and resulting in the ownership rights being transferred to two other companies without engaging the tenants’ statutory first refusal rights. This case was brought forward by the tenants, asserting that their rights under the Sale Act had been bypassed due to what they viewed as an orchestrated effort to circumvent the law.
Legal Challenge and Victory:
The tenants, represented by TZ, challenged the trial court’s decision that the transactions in question did not constitute a “sale” under the Sale Act and therefore did not invoke the right of first refusal. The appeal was successful, substantiating TZ’s position that the transactions—either individually or collectively—should be seen as sales, thus affirming the tenants’ rights.
Implications for Tenants’ Rights:
TZ’s litigation efforts have significantly contributed to enforcing tenants’ rights to purchase their buildings in the face of landlord sales in the District of Columbia. This case, in particular, emphasized the importance of ensuring that complex property transactions do not undermine statutory protections for tenants.