DC’s New TOPA Law – Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Act (Effective December 31, 2025)
Washington, DC has officially entered a new era of tenantpurchase law. With the passage of the Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Act, the DC Council approved the most sweeping changes to the Tenant Opportunity to Purchase Act (TOPA) in years. There are a number of provisions of the RENTAL Act that still remain unclear and subject to interpretation, however we can share some noteworthy changes as the DHCD continues to provide ongoing guidance.
- What Constitutes a “Sale”
Under the Act, a transaction counts as a sale if there is a transfer of a majority ownership in a business entity that owns a rental accommodation as its principal asset. “Majority ownership interests” means ownership interests associated with the majority of the value of the capital, profits, and losses of the entity. The Act defines “principal asset” as the value of the property relative to the entity’s other holdings. The business entity is not any entity; it is specifically a corporation. Thus, if an LLC, partnership, or trust, etc. owns the housing accommodation, TOPA does not apply
What does this mean for 2–4 Unit Buildings?
TOPA is practically eliminated. The new law specifically exempts 2 – 4 unit accommodations from TOPA unless the accommodation is owned in majority by a business corporation. As such, it will be rare that a 2 – 4 unit accommodation will be subject to TOPA. Even if the property is exempt, notice must still be sent to the tenant(s) informing them that the landlord is selling the property. This notice is the required notice to tenants used single family accommodations informing the tenant that the landlord is selling the property or has received an offer to purchase the property. As of this writing, we are waiting for DHCD to provide an official approved form.
What does this mean for Single Family Accomodations?
No change
What does this mean for 5 or more Unit Buildings?
Basically Unchanged; Complicating factors will be the “cooling off period” and potentially assignments.
- Major New Exemption from Sale
Buildings Under 15 Years Old
Under the RENTAL Act, a new exemption is that all multifamily buildings are exempt from TOPA for 15 years from the issuance of their Certificate of Occupancy.
This exemption is retroactive, meaning:
- If a building received its CO 10 years ago, it is exempt for five more years.
- If a building is brandnew, it is exempt for the full 15 years.
* It is important to note that to qualify for this exemption, landlords must notify prospective tenants in their leases that the property is exempt. Also, landlords of exempt properties must provide written notice to all existing tenants regarding the applicability of the exemption by March 31, 2026. Although exempt properties are not subject to the Offer of Sale requirement, a Notice of Transfer must be sent to all tenants.
- Notice of Transfer Still Required for Exempt Buildings
If the property is subject to TOPA and the owner is claiming an exemption under the sale, owners must still send a Notice of Transfer to the tenants. Once the Notice of Transfer is provided, the tenants have 45 days to register a tenant association for purposes of contesting the Notice of Transfer.
The Notice of Transfer should include specific disclosures, including whether management or rents will change, whether affordability restrictions apply, and the legal basis for claiming that the transfer is not a “sale” under TOPA.
An updated Notice of Transfer form for 5+ unit accommodations is available here Notice of Transfer- 5 or more Rental Units. The RENTAL Act now allows DHCD to receive TOPA filings, notices and other correspondence via email. Email your documents to [email protected].
**Please note that in the rare circumstances where a Notice of Transfer must be sent to tenants in 2 – 4 unit accommodations, please reach out to Federal Title before sending those forms.
- A “Cooling-Off Period” for Assignments
One of the most notable procedural changes is the introduction of a cooling off period during which tenants/tenant organizations cannot assign their TOPA rights. For 2-4 unit accommodations, there is a 22day coolingoff period and for 5 or more units, there is a 45-day cooling off period. For both, assignment of TOPA rights can only occur after receipt of a valid offer of sale.
As the District transitions into the new TOPA framework, let us help you with any questions you may have. The new TOPA law represents a major recalibration of tenantpurchase rights in DC and understanding these changes is essential to avoid unnecessary delays and keep transactions moving smoothly under the updated law.
