Opinion ID: 2354195
Heading Depth: 1
Heading Rank: 3

Heading: Was This Transaction A Sale?

Text: The relevant portion of the Sale Act, [9] D.C.Code § 42-3404.02, entitled Tenant opportunity to purchase; `sale' defined, states: (a) Before an owner of a housing accommodation may sell the accommodation, or issue a notice of intent to recover possession, or notice to vacate, for purposes of demolition or discontinuance of housing use, the owner shall give the tenant an opportunity to purchase the accommodation at a price and terms which represent a bona fide offer of sale. Despite the caption of this section, subsection (a) does not define the word sale, so in West End Tenants we were required to discern its plain meaning. We have already quoted our holding at page 1116, above. The statute does contain additional provisions defining sell or sale, but these specialized definitions do not apply to the circumstances presented here. As we explained in West End Tenants Ass'n, subsection (b) [10] was enacted as The Tenant Opportunity to Purchase Clarification Amendment Act of 1989, and its aim was to retroactively bring the Master Lease agreement at issue in that case within the definition of sale. 640 A.2d at 735-36. The text of subsection (b) covers only assignments, leases, and encumbrances of property that meet each of the six statutory requirements. The 95/5 transaction is not a sale within this definition because it does not meet all six requirements of the subsection. Similarly, subsection (c) [11] is inapplicable to the 95/5 transaction because on its face it applies to a transfer of 100% of all partnership interests in a partnership which owns the accommodation as its sole asset to 1 transferee or of 100% of all stock of a corporation which owns the accommodation as its sole asset.... D.C.Code § 42-3404.02(c) (emphasis added). This case does not involve the sale of a partnership or a corporation. The Tenants Association argues nevertheless that these provisions demonstrate that the definition in West End Tenants is not all-encompassing. Furthermore, it submits that subsection (b) demonstrates that a transfer of absolute title is not always required; similarly, subsection (c) shows that the legislature knew how to require a 100% transfer when it wanted to. We cannot agree with the Tenants Association that these specialized definitions alter the general meaning of sale in subsection (a). Indeed, they were added to the statute because the transactions they describe would not be captured by subsection (a). To be a sale as the term is used in subsection (a), a property transaction must be an absolute transfer or amount to the passing of general and absolute title. West End Tenants, 640 A.2d at 727-28. We emphasized this point in West End Tenants by distinguishing the passage of general and absolute title from transfers of interests falling short of complete ownership. Id. at 728. Applying this definition to this case, it seems obvious that transferring 95% of title is not the same as transferring absolute title. Such a transaction is, by definition, a transfer of a special interest falling short of complete ownership, and therefore not a sale within the meaning of § 42-3404.02(a) as interpreted in West End Tenants Ass'n. As it was with the Master Lease in question there, the transferring owner here ha[s] not conveyed [its] entire interest and title in the buildings, and the 95/5 transaction therefore does not effect an absolute transfer. 640 A.2d at 728. We find nothing ambiguous about the language chosen in West End Tenants Ass'n that could be read to dictate a different conclusion here. [12] The Council has had several opportunities to alter this definition in the years since we issued our decision in West End Tenants Ass'n, but it had not done so at the time of the transaction at issue in this case. But see note 1 supra. The Tenants Association accurately points out that some of the Sale Act's legislative history urged that the term sale be construed to cover all changes in fundamental control of ownership. See Columbia Plaza Tenants' Ass'n v. Columbia Plaza Ltd. P'ship, 869 A.2d 329, 334 (D.C.2005). [13] However, no such language was added to the Sale Act, so the Council did not purport to overrule our interpretation of § 42-3404.02(a). [14] Indeed, the discussion cited by appellant related to the amendment that became subsection (c). We have already explained why that provision is not helpful in resolving this case. We therefore conclude that West End Tenants Ass'n controls, and that the 95/5 transaction was not a sale covered by the Sale Act.