Opinion ID: 2113130
Heading Depth: 2
Heading Rank: 3

Heading: Assignment to the third party purchaser.

Text: Ms. Allman contends that [t]he purported assignment to the third party purchaser was void as a matter of public policy. According to Ms. Allman, [t]his [c]ourt should hold that TOPA does not sanction an assignment of tenant rights to a [t]hird [p]arty [p]urchaser by a tenant in a two to four unit housing accommodation under the circumstances presented here. [3] In so contending, however, Ms. Allman is not asking us to construe the language of the statutory assignment provision, but rather, to disregard it. Put another way, she is asking the judicial branch, as a matter of what she calls public policy, to engraft upon the statute an exception that it does not contain. Section 42-3404.06 provides, without limitation, that a tenant may assign or sell his or her rights to any party, whether private or governmental. (Emphasis added.) Thus, it was conceded by all in Medrano, and it is equally true here, that [Mr. Bissey], although not a tenant of the rental accommodation, effectively became one for purposes of the Act by his assignment of rights from [the McGlincheys]. Medrano, 885 A.2d at 312. If the legislature had intended to preclude real estate brokers or developers, or other potential third party purchasers, from receiving assignments from tenants, it could readily have so provided. This, however, was not the Council's intent. This is evident not only from the unrestricted statutory language, but also from the real world situation that a tenant must confront if the owner seeks to sell the accommodation. If a tenant in such circumstances wishes to cooperate with, or to assign or sell his or her rights to someone, that someone is likely to be a person in the real estate business who is interested in obtaining (and therefore, necessarily, in paying for) the tenant's rights in order to acquire the property. As we have noted, Mr. Schwat (Ms. Allman's associate in her attempt to purchase) and Mr. Bissey (the McGlincheys' assignee) are both in the real estate business. So far as the record reflects, there is no reason to believe that either Mr. Schwat or Mr. Bissey would have become involved in the venture if he were not in real estate. If, as the statute plainly contemplates, a real estate broker or developer may become a tenant's assignee, then it would surely be illogical to make Mr. Bissey  a real estate broker who has offered to purchase the property on terms agreeable to the seller  ineligible for an assignment of the McGlincheys' rights. One might perhaps detect some irony, in a statutory scheme which gives some measure of protection to a tenant from a third party purchaser, to permit the third party purchaser to defeat the tenant's expectation by reaching an agreement with a different tenant. This irony, however, if it is indeed an irony, is dictated by the statute, which permits assignment to anybody and leaves the choice of the assignee, and the consideration to be received from that assignee, in the assigning tenant's absolute and unfettered discretion. Ms. Allman contends that we should disregard the language of the statute because, according to her, it produces absurd or unreasonable results and defeats TOPA's overall purpose: Despite the arguably clear language of each of the individual TOPA provisions, it is evident that the legislature could not possibly have intended the result reached by the trial court. The result is plainly contrary to the statute's expressed purpose. The right given to tenants to assign their rights to purchase was not designed to give third party contract purchasers the ability to prevent bona fide tenants [4] from exercising their rights. Ms. Allman relies on In re Perrin, 663 A.2d 517, 523 (D.C.1995), and authorities there cited, for the proposition that we must not make a fetish out of plain meaning and that where the literal meaning of the statutory language is plainly at variance with the policy of the legislation as a whole, we should not follow it. In this case, however, the result reached by the trial court is not plainly at variance with the policy of TOPA. On the contrary, the legislature deliberately included in that statute the unrestricted right of a tenant to assign his or her rights. If the result of permitting assignment is that in some cases real estate developers rather than tenants are likely to ultimately acquire the property, the members of the Council, who are surely not blind to the ways of the world, must have contemplated, and in fact did contemplate, that this might sometimes come about. In testimony before the Committee on Consumer and Regulatory Affairs of the Council of the District of Columbia in support of the Extension and Amendment Act of 1993 to the Rental Housing Conversion and Sale Act of 1980, Bill 10-243 (Sept. 23, 1993), Richard C. Eisen, an attorney who has regularly represented tenant organizations, emphasized the importance to tenants of the opportunity to sell or assign their TOPA rights: Many people have believed, on first blush, that Amendment (1) [the provision permitting assignments] would be inconsistent with the purposes of the Act. However, they overlook the provision in DC Code Sec 45-1602(1)[ [5] ] seeking to strengthen the bargaining position of tenants ....    In doing research for one of the cases, I came across a fascinating transcript of the Council debate from the original enactment in 1980 .... [This] is a discussion among the primary cosponsors of the original Act  Councilmembers Ray, Wilson and Clarke. In that excerpt, the Councilmembers were discussing whether tenants should be allowed to sell their conversion rights for money. The unambiguous answer from all three sponsors was yes; this is the approach that was accepted by the full Council. While there was no comparable discussion concerning sale of tenant purchase rights, I believe that is because there was no need to differentiate between the rationale for sale of conversion rights and sale of purchase rights. While there may have been only a handful of reported court cases considering this issue, there have been hundreds and probably thousands of cases where tenants have sold or assigned their rights, cases that no one ever challenged in court. Indeed, this approach has been so common that it has generated its own terminology. For example, a cafeteria plan means a developer of a multifamily property is assigned the tenants' purchase and conversion rights in exchange for a cafeteria style offering to the tenants  some tenants can buy their units for insider, below market sales prices, while other tenants can continue as long term renters at rents less than rent control would allow and without fear of being involuntarily displaced, while still others can be paid hundreds, thousands or even tens of thousands of dollars to vacate their units. Tenants  the class whom TOPA was designed to protect  thus receive a significant and tangible benefit from the legislation authorizing assignment or sale of their TOPA rights. As a result of the statute's enactment, they have something of value  assignable TOPA rights  for which a prospective assignee is likely to be willing to pay, and in many cases has paid, in order to acquire the property. Tenants may use such payments for moving expenses, for obtaining a new residence, or for other purposes. This result may not be Ms. Allman's ideal, but it was one of the legislature's chosen vehicles to benefit tenants, and we must give it effect. Essentially, Ms. Allman is asking us on public policy grounds not to follow the language of the statute, but we have no license to substitute our views of public policy for those of the legislature. It is not within the judicial function ... to rewrite the statute or to supply omissions in it, in order to make it more fair. 1841 Columbia Rd. Tenants' Ass'n v. District of Columbia Rental Hous. Comm'n, 575 A.2d 306, 308 (D.C.1990) (citations and internal quotation marks omitted). To supply omissions in [statutory language] transcends the judicial function. Iselin v. United States, 270 U.S. 245, 250-51, 46 S.Ct. 248, 70 L.Ed. 566 (1926) (Brandeis, J.); see also Watkins v. United States, 846 A.2d 293, 299 (D.C.2004) (quoting Iselin ). As we recently stated in Medrano, 885 A.2d at 314, the balance of interests  of potential advantages and losses  in rental housing conversion has been struck by the legislature in establishing the requirements it did in [the Act]; and it is not for the courts to adjust that balance to correct perceived inequities.