TOPA Reforms Pass DC Council

Our recent Alerts (August 2025 Multifamily Alert, July 28, 2025 Alert, July 2, 2025 Alert, June 12, 2025 Alert, June 3, 2025 Alert, April 4, 2025 Alert, March 17, 2025 Alert, and February 13, 2025 Alert) discussed the months-long efforts seeking to improve many aspects of DC's Tenant Opportunity to Purchase Act (TOPA). These efforts resulted in a few significant improvements, as well as some new requirements.

On September 17, 2025, the DC Council passed B26-0164, the Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Act of 2025. This bill now goes through an enactment process, beginning with the Council's Office of the General Counsel to compile the final unified text that will be sent to the Mayor for signature. The Mayor has 10 days to sign or veto the RENTAL Act. If the Mayor does nothing, the RENTAL Act goes to Congress after 10 days. After that, Congress has 30 working days (i.e., in-session) to review. We will provide a more detailed summary of this legislation once the final text is published, but in the interim, below are a few highlights of the TOPA-related provisions of the RENTAL Act.

15-Year Blanket Exemption for New Buildings. This is the most important and impactful provision of the RENTAL Act. Once enacted, any sale of or transfer of interests in a new housing accommodation, completed within the 15 years prior to the date of sale, is not a sale for Offer of Sale purposes. Consequently, tenant associations will not have a right to purchase housing accommodations meeting this exemption requirement. One requirement for this exemption is for landlords to notify prospective tenants in their leases that the property is exempt. Also, housing accommodations that are excluded from the Offer of Sale requirement must provide written notice within 90 days to all tenants regarding the applicability of the exemption. Note that when an exempt property is sold, a Notice of Transfer must be sent to all tenants.

Notice of Transfer. In addition to a Notice of Transfer being required for new buildings eligible for the 15-year blanket exemption, a Notice of Transfer is still required for transfers that are otherwise excluded from the Offer of Sale requirement. Note that previously, a Notice of Transfer required an accurate description of the transfer containing all material facts, including whether the transfer will result in any changes in management, current rents, or any applicable affordability requirements for the housing accommodation. In the RENTAL Act, the requirement to provide a description containing all material facts has been deleted.

Revised Definition of Sale. Transfers of ownership interests in business entities are clarified somewhat. Under the RENTAL Act, the transfer of ownership interests in an entity that owns a rental property is a "sale" under TOPA if the property is the entity's principal asset and the transfer results in a change in control of a majority of ownership interests. This is a more objective test than the previous test for a "sale", which included any transfer "which in effect results in the transfer of the housing accommodation". TOPA will now define "principal asset" as the value of the property relative to the entity's other holdings, and "majority of ownership interests" as those tied to the entity's capital, profits, and losses.

New Offer of Sale Requirements. For properties that are not exempt or excluded from the Offer of Sale requirements, Offers of Sale must now include (1) a notice that tenants are entitled to no-cost technical assistance and training regarding their TOPA rights, and (2) a list of all tenant support providers (see below) certified by the Mayor at the time of the offer. The notice must inform such tenants of their rights and direct them to provide proof of tenancy within 15 days.

Tenant Support Providers. The legislation establishes tenant support providers, which will be certified through a process established by the Mayor through the DC Department of Housing and Community Development (DHCD) and based on a provider's ability to counsel tenants on TOPA matters. Certification is valid for four years and DHCD will maintain a list of providers.

Cooling-Off Period. Within five business days after the Mayor receives a valid Offer of Sale, the Mayor must provide copies of the offer to all tenant support providers and Qualified Purchasers (see below). For tenant associations in buildings with five or more units, they may not assign their purchase rights to a third party before receiving a valid offer or during the first 45 days after receipt of the offer, unless they have previously submitted registration materials to DHCD. These registration materials include information regarding the organization's officers, legal counsel, articles of incorporation, bylaws, and documentation that it represents a majority of occupied units. The organization must also provide proof that its members have received training on their rights from an approved tenant support provider, including date, time, number of units represented, and confirmation that a quorum was met.

Qualified Purchasers. The legislation creates a certification process for "Qualified Purchasers"—developers or organizations approved by the District–to acquire TOPA properties. For the first five years after this section becomes effective, any entity previously designated as a Pre-Approved Developer under 14 DCMR § 2499 will automatically be granted certification as a Qualified Purchaser. Certification will remain valid for four years. DHCD is tasked with establishing criteria for selecting Qualified Purchasers.

Assignment of Rights and Consideration. Tenants may assign their rights for any consideration at any point after the cooling-off period. If a third party receives tenant rights, they may only reassign those rights to a private or nonprofit entity. No consideration is allowed for secondary assignments.

Requirement for Written Certifications and Notices. DHCD is required to provide, within five days of request, written certifications of any notices received pursuant to TOPA and copies of such notices. And in cases where DHCD has not received any notices, certifications of non-receipt.

Interference Prohibition. Anyone contacting tenants or tenant associations about an offer or negotiation must disclose the names and addresses of all individuals or entities with ownership or governance interests in the contacting entity and any financial interest they have in the property. Owners, purchasers, or agents with a financial or other interest in the housing accommodation may not interfere with tenants' rights under TOPA.

More to Follow. The RENTAL Actis quite extensive and future Alerts may provide a more detailed analysis of this legislation. Our next Alert will also discuss other laws and matters impacting multifamily stakeholders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.