So you think you’re ready to sell that rental property?  You’ve found a buyer, you’ve settled on a price, you think you’re good to go.  But hold on . . . better not pull the trigger until you’ve offered rights of first refusal to all those entitled to them.  Ballard Spahr attorneys Jenelle Dennis and Brandon Fields have become experts in navigating the sometimes-tricky (and recently expanded) Maryland and DC statutes that give others a bite at the apple before rental property can be transferred.

These people know the local turf:  Jenelle’s a D.C. native, while Brandon grew up in Potomac and played golf for Landon (talk about an expert qualification for real estate work!).  They joined forces on a project for a little client known as The Carlyle Group, assisting on the successful bulk sale of condo units at McLean Gardens to rental company Capital Properties. 

Brandon has developed a specialty on the right-of-first-refusal process in Montgomery County, where he does frequent transactional work for sellers of apartment buildings.  Montgomery County law gives the County a 60-day option to buy for the proposed sale price, and also gives existing tenants 45 days to form a tenants association and another 90 days to exercise a right to purchase.  The law formerly applied only to apartments constructed prior to 1981, but was expanded in July to include all rental properties.  

Brandon holds some architectural drawings, which get included among the records he is required to submit to Montgomery County.  Ballard Spahr attorneys do whatever is necessary to get the job done; Brandon once fielded a call from a tenant who agreed to cooperate with a sale if he would give her a used sofa from the unit next door.

Complying with the Right of First Refusal Regulations requires submitting copious records to the County:  rent rolls, drawings, income statements, etc.  (We shuddered to ourselves when Brandon held his hand a foot above the table, demonstrating the height of the paperwork he typically submits to Montgomery County.)  Brandon’s not deterred—he has recently steered the purchase and sale of projects by Fairfield, CIM, Bainbridge, JPI, Archstone-Smith, Kettler, Artery, ING, Ross Development, CBRE, Federal Capital Partners, Monument Realty, Bozzuto, RREEF, Stellar, Home Properties, and others through the process.

While the process is old hat for Ballard Spahr, it can be a foreign one to owners.  “A lot of non-local owners have never seen this before and are perplexed to find out that their contemplated sale can be held up for several months,” says Brandon.  “We help our clients understand the process and work with officials to navigate the regulatory waters.”  With the Howard County Council currently considering Right of First Refusal legislation similar to the Montgomery County requirements, Brandon’s expertise and knowledge of the right of first refusal process may soon be important for sales of rental property in Howard County. 

Besides being a high-flying real estate attorney, Jenelle is . . . well, a high flyer.  She piloted her first solo flight at the tender age of 15, before she’d ever driven a car.  Jenelle isn’t in the air as much these days, but flying is in her genes—her dad is a former member of the Air Force who flew in the Presidential support squadron and was also a commercial pilot for Northwest Airlines.

Jenelle works the D.C. beat, where her past experience litigating TOPA (Tenant Opportunity to Purchase Act) cases comes in handy as she instructs developers on their legal duties to potential tenant-purchasers.  In 2005, D.C. closed a loophole that had allowed sellers to employ so-called “95/5 transactions” to avoid TOPA requirements—the sealing of which makes Jenelle’s advice all the more necessary.  Also, unlike Montgomery County, D.C. does not issue certificates of compliance to sellers who have performed their right of first refusal duties, which can make title insurers hesitant to insure apartment sales.  When Ballard is on the case, Jenelle and Brandon say, title insurers have confidence that things have been done right.