Mehri & Skalet represents the Waterside Towers Resident Association in a lawsuit against building owners. This case is one of the 95/5 cases that Mehri & Skalet has taken up against apartment building owners who have structured transactions in an attempt to circumvent DC’s Opportunity to Purchase Act, which was designed to provide tenants with a path to ownership.

The Opportunity to Purchase Act requires that anyone selling a residential property first give current tenants and tenants associations the opportunity to purchase the property on the same terms as the seller is offering to outside buyers. To get around these obligations, property owners in DC began to sell a 95% to 99% stake in the property initially, with a verbal agreement to sell the remaining percentage at a later date.

Though the lower court initially dismissed this case, an appellate decision later vindicated the tenants’ position that the transfer of the townhomes portion of the project was a sale; thus, the transfer required notice to the tenants, a right to negotiate, and a right of first refusal to purchase the property. The firm is in the process of conducting discovery and litigating the remaining issues in the case.