If you own a rental rowhouse in Petworth, a garden condo in Woodley Park, or a two-flat off H Street, and you last read up on the Tenant Opportunity to Purchase Act during the Obama administration, most of what you remember is wrong. If you read up on it during the pandemic, half of it is wrong. The Rebalancing Expectations for Neighbors, Tenants, and Landlords Act of 2025 took effect on December 31, 2025, and it rewrote the parts of TOPA that used to give small owners the most trouble.
Here is the twist most sellers miss. The RENTAL Act narrowed who has to run the full tenant purchase process, but it did not eliminate the paperwork trap that clouds title and kills closings. The exemption you now qualify for is only as good as the notice you file to prove it.
What Actually Changed on December 31, 2025
TOPA still starts from the same place it did in 1980. Under the Rental Housing Conversion and Sale Act, a tenant in a for-sale building may have the first right to purchase or to assign that right to a buyer of their choosing. What the RENTAL Act did was carve out categories of sales where that right no longer applies.
The provisions most relevant to a residential seller in the District:
- New construction, retroactive. Any building with a permanent certificate of occupancy issued within the last 15 years is exempt from the Offer of Sale requirement. It applies retroactively, so a 2018 condo project is exempt for another seven years or so.
- 2-4 unit small buildings. A two-to-four-unit accommodation is exempt unless the majority owner is a business corporation. In practice, this covers most of the small flats owned by individuals, couples, and family LLCs.
- Single-family accommodations. Still exempt from the full purchase-and-assign process under the 2018 amendments, with a narrow carve-out for elderly or disabled tenants who signed leases by March 31, 2018 and took occupancy by April 15, 2018.
- Assignment consideration is capped. Tenants in non-exempt sales may only negotiate for relocation assistance, affordability covenants, organizing expenses, or specified improvements. Relocation assistance is capped at the lesser of one year's rent or $12,000, adjusted annually, per the Arnold & Porter summary of the Act.
- Estate transfers. Transfers to surviving spouses, domestic partners, lineal descendants, or trusts controlled by them are not sales for TOPA purposes.
- Foreclosure and tax sales. Now exempt from the Offer of Sale requirement, though a Notice of Transfer is still required.
If you stopped reading there, you would conclude that TOPA is over for the ordinary DC homeowner. It is not.
The Exemption Is Not a Skip Button
Here is the sentence sellers keep missing. Exempt from TOPA does not mean exempt from notice.
For exempt sales, a Notice of Transfer must still be delivered to the tenant, and, in the single-family process that survived the 2018 reforms, notice must go to the tenant, the Office of the Tenant Advocate at 899 North Capitol Street NE, and the DHCD Rental Conversion and Sale Division. The DHCD forms specify who gets the notice, when, and how. Giving each tenant a copy is not the same as filing correctly with the agencies.
Miss any of it and the practical effect is the same as missing the substantive right. The title company will flag the file. The buyer's lender will not fund. Closing slides, then slides again. As one DC settlement firm put it in their RENTAL Act summary, even fully exempt 2-4 unit buildings still require notice to tenants.
There is a second wrinkle. The RENTAL Act eliminated the option for landlords to request an official determination from the District about whether a particular sale is exempt. The burden of proving exemption stays with the owner. If a title underwriter disagrees with your read of the statute, you no longer have a bureaucratic tiebreaker to run to.
Where the Friction Actually Lives
Three scenarios keep showing up in DC closings this year.
The tenant who moved out last spring. Sellers assume TOPA does not apply because the unit is currently vacant. It can still apply if there was a tenant in occupancy when the decision to sell was made, and it definitely still applies if a lease was in force during the window when the offer was solicited. Title clouding, per Nixon Peabody's post-RENTAL Act analysis, is one of the fastest ways for a DC deal to fall apart at settlement.
The rowhouse with an English basement rental. The 2018 exemption covers single-family homes with an accessory dwelling unit and a single rental within a condo or co-op unit. Sellers with a legal basement apartment still owe the single-family notice. Sellers who added a second kitchen without pulling permits should assume the property will be treated as they built it, not as they wish it were treated.
The two-flat owned by an LLC. The 2-4 unit exemption is conditional. If a majority of the ownership is a business corporation, the exemption does not apply. LLC structure, member composition, and operating agreements matter here in a way they did not before, and the RENTAL Act's language on this point is one of the provisions that title counsel are still working out because DHCD has been given 180 days to promulgate regulations, with the industry told that full rulemaking may take at least two years.
That two-year regulatory gap is the real story for sellers listing in 2026 and 2027. The statute is in force. The interpretive guidance is not written yet. Title companies are being conservative. That means the safest posture for a seller is to over-notice, not under-notice, and to build the timeline assuming a title reviewer will ask questions your last DC sale never triggered.
The Cooling-Off Period and Qualified Purchasers
For sales that are not exempt, the RENTAL Act layered on two new mechanics worth knowing even if you think your sale will clear as exempt.
An Offer of Sale must now include notice that tenants are entitled to no-cost technical assistance from DHCD-approved Tenant Support Providers, plus the list of providers certified at the time of the offer. Within five business days after the Mayor receives a valid Offer of Sale, copies go to all tenant support providers and to Qualified Purchasers.
Qualified Purchasers are a new class of buyer under the Act, certified through DHCD for four-year terms. As Jackson & Campbell has flagged, these buyers may be entitled to deed and recordation tax exemptions, which quietly changes the economics of tenant-occupied sales in favor of certified investor-developers over ordinary end-user buyers. If your building is not exempt, expect Qualified Purchasers to show up in the offer stack.
How to Sequence This Against Your Listing Calendar
The current Days on Market for DC hovers around 50 to 60 days for late 2025 and early 2026, and most sellers plan on a 3 to 4 month total window from decluttering to keys. TOPA compliance runs in parallel with that, not after it. In practice:
- Before you interview agents, pull your certificate of occupancy date and confirm lease status for every occupant. If you are within 15 years of the CO, save yourself the argument later and gather the paperwork now.
- Before you list, decide the exemption category and prepare the corresponding notice. For single-family and 2-4 unit exempt sales, that means the tenant notice plus filings to the OTA and DHCD's Rental Conversion and Sale Division.
- On listing day, deliver notices via trackable service. Keep the receipts. Title will ask for them.
- Alongside offers, order the DC Seller's Property Disclosure Statement and, for condos, the resale package. The package must be delivered within 10 business days of a ratified contract, and the buyer then has a 3-business-day review window during which they can cancel for any reason.
- If your sale is non-exempt, build in the statutory tenant response window. Response periods can range from 30 days for single-family to 45-to-120 days for 2-4 unit buildings, and longer for larger buildings, and the sales contract must be signed within 360 days of the Offer of Sale.
The cost side is straightforward. DC sellers pay a 1.45% transfer tax on sales over $400,000, which is a line item on nearly every District closing, and unlike TOPA it has not changed this year.
FAQ
My tenant already told me they don't want to buy. Can we skip the notice? No. A verbal waiver does not clear title. The Federal Title guidance is to obtain a written Tenant Acknowledgement or a signed Election Not to Exercise, then deliver copies to the settlement company. The paperwork protects the deed, not the conversation.
I inherited the property from a parent. Does TOPA apply when I sell? The transfer to you is not a TOPA sale. Your subsequent sale to a third party is, unless another exemption applies. Estate planning transfers to family are excluded from the definition of sale under the RENTAL Act, but the resale to a stranger is a fresh event.
Can I evict the tenant to sell the home vacant? A property sale is not, by itself, a legal cause for eviction under DC law. Month-to-month tenants generally require 90 days' notice and cause. That is a separate conversation from TOPA and one that benefits from experienced counsel before a listing goes up.
What if my building is 12 years old and I want to sell in 2027? Under the new construction exemption, your building would be exempt from the Offer of Sale requirement until the 15-year window closes. You still owe the appropriate notice, and the burden of proving the exemption remains with you.
DC sellers with tenants, past tenants, or an LLC on title should not be figuring this out from a search bar the week the sign goes in the yard. If you are weighing a sale in the District in the next twelve months, Stacy Berman and Kathleen Ryan can walk you through what the RENTAL Act means for your specific property, coordinate with a settlement attorney early, and build a listing timeline that respects the notice calendar instead of tripping over it. Contact Stacy to start the conversation.
