9.1 Seller’s Notification to the Department and the Commission. For the first sale of a WFH Unit after the expiration of the applicable control period, the owner must provide the following information to the Department 30 days prior to settlement:
(a) A copy of the signed sales contract which clearly states the agreed upon sales price and which clearly indicates the Department’s and the Commission’s right of first refusal to purchase.
(b) A copy of the real estate broker’s listing agreement;
(c) An itemized list of improvements including actual or estimated value of the improvements with documentation of the value in a form acceptable to the Department; and
(d) The name and contact information for the settlement agent, once it has been determined.
(e) An independent, third-party appraisal of the property no more than 60 days old.
9.2 The Department’s and the Commission’s Right to Purchase WFH Units with Expired Covenants. The Department must immediately notify the Commission of the offer, and the Commission must have the right to match the purchase offer. The Commission must notify the Department and the owner within 14 days of the Department’s receive of notification of the offer, whether or not it intends to purchase the unit. If the Commission decides to exercise its right to purchase the WFH Unit, it must tender a purchase contract to the owner within 21 days from the date it notifies the Department and owner of its decision. The offer must contain substantially the same terms and conditions as the contract offered by the third party, and a deposit must be made, payable to an escrow agent. If within 14 days of the Department’s receipt of the offering notice, the owner does not receive written notice from the Commission that it intends to purchase the unit, or if after receiving such notice, the owner does not receive from the Commission a purchase contract at substantially the same terms and conditions as the contract offered by the third party within 21 days, the owner will be free to proceed to settlement on the third party contract.
9.3 Payment of Excess Proceeds to Housing Initiative Fund. For the first sale of a WFH Unit for which the applicable control period has expired, the seller must pay to the Housing Initiative Fund one half of the excess proceeds.
(a) Excess proceeds are defined as the amount by which a bona fide sales price exceeds the sum of the following:
(1) The original appraised full market value, or the price that a rental unit would have been permitted to be sold for if it had been a sale unit at the time of the original rental;
(2) An allowance for the increase in the cost of living as determined by consumer price index (CPI-U) for the Washington, D.C. PMSA from the date of the initial sale or the latest resale or rental;
(3) The value of capital improvements made to a unit subsequent to the most recent date of purchase, as determined by the Department.
(4) If a licensed real estate agent is used, the amount of the real estate sales commission at the average prevailing commission rates; however, the commission must not exceed 6 percent of the sale price.
(5) An allowance for applicable transfer taxes and recordation charges.
(b) The Department must notify the owner of the calculation of the excess profit and the amount that must be paid to the Housing Initiative Fund within 21 days of receiving the required information from the owner. The Director may reduce the amount that mus be paid in order to ensure that the seller retains at least $10,000 of the excess profit.
(c) The required portion of the excess proceeds of the sale must be paid to the Housing Initiative Fund and must be collected at the time of settlement. The seller is responsible for ensuring that the payment is disbursed in accordance with this regulation. A copy of the final settlement sheet for the transfer of ownership must be sent to the Department within 14 days of the date of settlement on the property transfer. The Department must release the WFH Unit covenants and liens recorded in the land records after the County has received the required payment to the Housing Initiative Fund and the settlement documents.
(d) Failure of the owner to notify the Department of a sale, obtain a determination of excess proceeds, and pay the required portions of the excess proceeds to the Housing Initiative Fund constitutes a default under the covenants, these regulations, and Chapter 25B.
9.4 Divorce. If one owner buys out the other owner’s interest in the unit as part of a divorce settlement, without selling the unit on the open market, then this does not constitute the first sale fo the unit, and does not relieve the remaining owner of the shared profit obligation.