Appeal from the Superior Court of the District of Columbia; (Hon. George Herbert Goodrich, Trial Judge)
Before Rogers, Chief Judge, and Steadman and Schwelb, Associate Judges.
The opinion of the court was delivered by: Steadman
STEADMAN, Associate Judge: Appellant Green was the long-time tenant of a one-family residence owned by appellee Gibson. Gibson sold the residence to appellee Dillon. Green filed suit to set aside the sale, claiming that Gibson had not fully afforded Green his rights of opportunity to purchase and of first refusal under the Rental Housing Conversion and Sale Act, D.C. Code §§ 45-1601 et seq. (1990) (the "Act"). The trial court without opinion granted appellees' motion for summary judgment. *fn1 We reverse.
In the District of Columbia, a residential tenant has two distinct sets of rights when an owner decides to sell that are relevant to this appeal. First, the owner must "give the tenant an opportunity to purchase the accommodation at a price and terms which represent a bona fide offer of sale." § 45-1631(a). The tenant of a single-family residence has "a reasonable period" of at least sixty days to negotiate the contract of sale, § 45-1638(2), *fn2 and "the tenant and owner shall bargain in good faith." § 45-1634(a). Second, a tenant has a right of first refusal for a period of fifteen days after the owner has furnished the tenant with a valid sales contract to purchase by a third party. § 45-1637.
The dispute between the parties here was essentially over two elements of this statutory scheme. The first was whether Gibson bargained "in good faith." The second was whether Green's right of first refusal had been fully honored after Gibson entered into the contract of sale with Dillon. We turn to an exposition of the alleged facts. *fn3
In the spring of 1987, Green first made an offer to purchase the property. The offer was rejected when Gibson took the property off the market. *fn4 A few months later, on November 16, 1987, Green received from Gibson the statutorily required notice of opportunity to purchase. It stated that the asking price for the house was $74,500 and that "the material terms of the sale are Owner Finance." *fn5
What happened next was a subject of dispute. According to Gibson, "during the subsequent negotiation period, the parties . . . were unable to reach an agreement and no contract for purchase and sale of the subject property was entered into between the parties. Despite advising Mr. Green of the seller, Ms. Gibson's willingness to ratify the contract based upon certain conditions, Mr. Green failed and refused to provide the required information and seek ratification of the contract." Green took issue with this statement in two respects. He attached a copy of an offer that he had made on December 7, 1987, to buy the property for $74,500, with the seller to take back a deed of trust for $67,050, with interest at ten percent, payable over 30 years. The offer was accompanied with an initial down payment of $1,500, which was given to Gibson's real estate agent, Joseph Harrell, and inexplicably not returned to Green until January 20, 1989. He further asserted that he had not refused to provide information or to seek ratification, and that the problem was the owner's refusal to furnish even a conditional signed contract so that he could approach financial institutions. *fn6
In any event, in early March of 1989, Gibson entered into a contract of sale with Dillon, the third party. On March 10, 1989, Green received a copy of that contract and a notice of his right of first refusal. *fn7 That notice, as had the original offer of sale, stated that the contract price was $74,500 and that "the material terms of the sale are Owner Finance." The notice then provided:
If you provide me with a contract offer, matching the third party contract I have accepted, you will have a minimum of sixty (60) days to obtain financing or financial assistance and go to settlement for the purchase of this housing accommodation. However, if a lending institution or agency estimates that a decision regarding financing or financial assistance will be made within ninety (90) days after the date of contracting, I will provide you with an extension of time consistent with the written estimate.
The contract between Gibson and Dillon provided for a purchase price of $74,500, with the seller to take back a deed of trust of $67,000, with interest of nine-and-a-half percent, to be repaid over 30 years. Green maintains that this third-party contract with Dillon was "substantially identical" to the contract offer that Green had made on December 7, 1988. This indeed appears to be the case.
A week later, on March 17, 1989, Green sent to Gibson another proposed contract in response to the notice of first refusal. That contract also provided for a purchase price of $74,500, although the financing terms are obscure. At one point, the contract states that the buyer will finance with a first deed of trust of $36,000 and a second deed of trust of $20,000, but elsewhere states that the seller will take back a first deed of trust amortised over 30 years at nine-and-a-half percent interest. The amount of the down payment at settlement is shown as only $2,000. *fn8 Also, a "home purchase assistance program addendum" ...