Richman Towers Tenants'ass'n, Inc. v. Richman Towers LLC.
17 A.3d 590
| D.C. | 2011Background
- Six apartment buildings in DC were sold via a two-step transfer to entities controlled by Carmel Partners and Quarry Enterprises, raising TOPA concerns by tenant associations.
- Transactions were structured through LLCs owned by the Bernsteins, with 99.99% of LLC II interests to Carmel and 0.01% to Quarry, forming an overarching sale-like arrangement.
- DCRA initially exempted the deal as not constituting a sale under TOPA, prompting tenant challenges after the statute of limitations began to run.
- The trial courts granted summary judgment against the associations on standing or sale grounds; five divisions denied standing, while two associations were later found to have statutory standing.
- The DC Court of Appeals ultimately held that two associations (BTA and LATA) had statutory standing, that the transfers constituted a TOPA sale, and that TOPA applies broadly to all sales, not only demolitions or discontinuances; some judgments were affirmed and others reversed and remanded.
- The decision integrates Waterside Towers, Gomez, Wallasey, Alcazar, and related authorities to determine the appropriate test for “sale” and the scope of TOPA rights.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing (statutory) to sue | Associations assert statutory standing via §42-3401.03(18). | Owners contend associations do not represent majority heads of households; four associations lack standing. | BTA and LATA have statutory standing; four other associations lack statutory standing. |
| Associational standing | Associations claim they can litigate on behalf of members even if not statutorily qualified. | Allowing associational standing would circumvent statutory thresholds. | Associational standing rejected; only statutory standing governs these cases. |
| Whether transactions were a sale under TOPA | Transfers should be treated as a sale that triggers TOPA rights. | Transfers were corporate restructuring lacking 100% transfer to a third party with independent value. | Transfers constitute a sale under TOPA (Waterside framework) and require TOPA procedures. |
| Scope of TOPA applicability (all sales vs demolition/discontinuance) | TOPA applies to all sales, not just those for demolition or discontinuance. | TOPA should be limited to demolition/discontinuance scenarios. | TOPA applies to all sales; punctuation cannot confine it to demolition/discontinuance; legislative history supports broad scope. |
| Constitutional contentions | Broader TOPA application impairs contracts/unconstitutionality. | TOPA is constitutional; no contract impairment. | TOPA constitutional; no invalidating clause found. |
Key Cases Cited
- Waterside Towers Residents' Ass'n v. Trilon Plaza Co., 2 A.3d 1084 (D.C.2010) (set the test that a transfer of absolute title to a third party with an overarching agreement can be a sale under TOPA)
- Gomez v. Independence Mgmt. of Delaware, Inc., 967 A.2d 1276 (D.C.2009) (sale when 100% title transfer with arm's-length bargaining and third-party benefit; distinguished Wallasey)
- Wallasey Tenants Ass'n v. Varner, 892 A.2d 1135 (D.C.2006) (reliance on form; not controlling where overarching agreements exist)
- Alcazar Tenants' Ass'n v. Smith Prop. Holdings L.P., 981 A.2d 1202 (D.C.2009) (contrast with Gomez; lack of overarching agreement defeated sale finding)
- West End Tenants Ass'n v. George Washington Univ., 640 A.2d 718 (D.C.1994) (standing framework for tenant organizations under TOPA)
- Twin Towers Plaza Tenants' Ass'n v. Capitol Park Assocs., L.P., 894 A.2d 1113 (D.C.2006) (discussion of associational standing; context for West End holding)
- Allman v. Snyder, 888 A.2d 1161 (D.C.2005) (tenants’ rights and standing principles under TOPA)