Opinion ID: 2992012
Heading Depth: 2
Heading Rank: 3

Heading: Financing Terms

Text: According to D.C. Code § 42-3404.05 (a-2), “[t]he owner may not require the tenant to pay the purchase price in installments unless the owner provides deferred purchase money financing on terms reasonably acceptable to the tenant.” Under the tenant contract, however, reflecting the third-party contract, TA was not “required” to pay by installment; TA had two options: paying the purchase price up front, in cash, or over time, in installments financed by the Seller. According to attorney Rome’s email of September 6, 2012, to the Seller’s attorney, Richard Luchs, TA appears to have eventually elected the seller-financed, installment alternative. 62 In its Answer to Davis’s cross-claim, TA asserted as a defense that the third-party contract “represent[ed] an illegal attempt to deny [TA] its lawful rights, is evidence of the failure of [the Seller] to bargain in good faith at that time, is void ab initio, and unenforceable.” TA, however, failed to proffer evidence to support these allegations. 34 Rome’s September 6 email then notes a “requirement in the [tenant] contract that in order to purchase the property at a price approaching market value, i.e[.] 4.25 M,63 a buyer must agree to seller financing on particular terms,” and alleges in the language of TOPA that the tenant contract “requires terms not ‘reasonably acceptable’ to the TA.” This argument, however, ignores the fact that TA accepted the terms of the third-party contract that provided for two financing options. Contrary to Rome’s allegation, the tenant contract did not “require the tenant to pay the purchase price in installments” (emphasis added). Davis, however, does not argue that the word “require,” as such, is enough to nix TA’s challenge to the seller-financing provision, and without further briefing we would not venture an opinion as to whether, under a two-option contract, a tenants’ association would automatically be foreclosed under TOPA from 63 This inclusion of a $4.25 million purchase price (or market value) in alleging a TOPA financing violation is perplexing. The email at the time acknowledged that the purchase price in the tenant contract was $7.65 million. Did Rome intend to suggest that the terms of seller-financing would not be “reasonably acceptable” to TA whatever the purchase price turned out to be? 35 challenging the reasonableness of the installment alternative.64 We find it sufficient to say that, in proffering its reasons why the seller-financing terms are not “reasonably acceptable,” TA falls short. In support of its argument, TA lodged in the record a declaration filed by Ms. Stephanie Mynkonos, TA’s Vice President, in which she asserted that after “discussions with numerous potential development partners and consultation with counsel, the TA reluctantly concluded that the terms of the required sellerfinancing were not reasonably acceptable . . . .”65 Beyond this generalized grievance, however, TA has not specified which elements of the financing requirements were not “reasonably acceptable,” including the rationale in support of that contention. Nor did Rome explain how, if at all, the seller-financing terms 64 Attorney Rome appears to be interpreting D.C. Code § 42-3404.05 (a-2) to say that if TA elects an installment purchase, the “owner may not require the tenant [association] to pay the purchase price in installments unless the owner provides deferred purchase money financing on terms reasonably acceptable to the tenant.” That understanding may seem strained, although it is not conclusively flawed, if only because it would be the unusual owner-seller—one not likely to have received special legislative attention—who would require seller-financing without permitting an all-cash, up-front payment. 65 See supra note 43. 36 would materially vary depending on the final purchase price.66 Rome’s September 6, 2012, email to attorney Luchs complained that the seller-financing terms were tailored to the Seller’s own estate planning needs, but TA never articulated why those financing stipulations were not “reasonably acceptable.”67 TA has never pointed out the terms it found objectionable, or how the Seller failed to address TA’s concerns, let alone proffered evidence—through discovery or otherwise—of alleged overreaching. These deficiencies compel a conclusion that TA’s allegation of unacceptable financing terms is conclusory, and thus lacks the specificity necessary to withstand Davis’s motion for summary judgment. 66 See supra note 63. 67 In his email, Rome voiced concern about the structure of the transaction: “When we have discussed [seller-financing], you have repeatedly told me that the Seller has structured the transaction in this manner for ‘estate planning’ purposes. For purposes of settlement and compromise, I have taken that at face value, and have offered to discuss the Seller’s needs in good faith and to attempt to arrive at an accommodation that would achieve the same purpose. I understand the Seller has flatly refused. That offer remains open at any time, but the refusal to negotiate is indicative of the Seller's true intent.” This concern, however, was not explained in the record. 37