"No More Tenant Interference in the sale." That line showed up in the marketing copy for a recent DC investment listing, timed to the District's overhaul of its tenant purchase law. It is the kind of sentence that gets forwarded around small-landlord group chats, and it is also the kind of sentence that talks past the actual statute. If you own a rowhouse in Petworth, Brookland, Bloomingdale, or Columbia Heights with a finished basement apartment bringing in rent, the real story is more specific, and more useful, than "TOPA is basically over."
Washington is the only jurisdiction in the DMV with a Tenant Opportunity to Purchase Act, a law that gives tenants the first chance to buy the building they live in when an owner decides to sell. For more than four decades it has applied broadly, and for just as long, sellers and their agents have treated it as one of the more unpredictable parts of a DC transaction. In late 2025, the DC Council rewrote large parts of it. The question worth asking before you list isn't whether the law changed. It's whether it changed for a property that looks like yours.
What actually took effect, and when
The DC Council passed the Rebalancing Expectations for Neighbors, Tenants, and Landlords Act, known as the RENTAL Act, on its second reading by a vote of 10 to 3 on September 17, 2025. After the title insurance industry raised concerns about how the small-building exemption was worded, the Council scheduled a third reading and passed the amended bill 9 to 4 on October 21. That October amendment is where the two-to-four-unit exemption took the shape described below. Mayor Bowser signed the final bill on November 13, transmitted it to Congress on November 17, and because Congress took no action during its 30-session-day review window, the law became effective December 31, 2025.
The headline changes for owners of smaller residential buildings are two exemptions. New multifamily construction is exempt from the TOPA offer-of-sale requirement for 15 years from the date it receives a certificate of occupancy, and that clock runs retroactively, so a building that got its CO ten years ago is exempt for five more years. Separately, buildings with two to four units are exempt from TOPA unless the building is owned in majority by a business corporation.
That second exemption is where most of the confusion, and most of the opportunity, actually sits.
The detail the marketing copy skips
"Business corporation" is a specific legal term, not a stand-in for any entity that owns rental property. Legal summaries of the RENTAL Act have been explicit that the exemption applies to the ownership structure, not the unit count alone, and that an LLC, a partnership, or a trust holding title does not trigger the corporate disqualifier. In practice, that means a large share of DC's small landlords, who hold their rowhouse or duplex in an LLC for liability protection rather than in a corporation, clear the exemption without ever having structured their ownership around TOPA at all.
That is not a loophole anyone drafted the RENTAL Act around. It's a side effect of how DC's two-to-four-unit rental stock is actually owned, and it happens to line up with the neighborhoods where basement-apartment rowhouses are most common.
The Urban Institute's analysis of the District's real property records found that DC has 6,886 rental properties with two to four units, compared with 3,568 buildings of five units or more. Ward 5 has the largest share of that small-building stock, with 1,407 properties, or 21 percent of the citywide total, followed by Wards 6 and 7. Ward 3 and Ward 4 have the fewest. That geography tracks closely with where English basement rentals are a normal feature of the housing stock rather than an exception, including rowhouse blocks in Brookland, Bloomingdale, and Takoma.
What still requires paperwork, even when you're exempt
Here is the part that catches sellers off guard. An exemption from the TOPA offer-of-sale requirement is not the same as an exemption from every notice obligation.
Being exempt from TOPA doesn't mean you skip the mail. It means you send a different letter.
Owners relying on the small-building or new-construction exemption still have to send tenants a Notice of Transfer when the property sells. That notice doesn't give tenants a right to buy, but it does have to go out, and skipping it is a compliance gap a title company will flag. Owners who want to claim the exemption for existing tenants also had a hard deadline: written notice of the exemption's applicability had to reach current tenants by March 31, 2026. If that notice never went out, the safest assumption going into a sale is that the exemption hasn't been properly established yet, regardless of how the building is titled.
A quick way to think about where your property likely lands:
| Property type | Ownership structure | Likely TOPA status |
|---|---|---|
| Rowhouse with basement rental unit (2 units total) | Individual, LLC, or trust | Exempt from offer of sale, Notice of Transfer still required |
| Rowhouse with basement rental unit (2 units total) | Owned in majority by a business corporation | Still subject to TOPA offer of sale |
| Building of 5+ units, built within last 15 years | Any | Exempt from offer of sale for the remainder of the 15-year window, Notice of Transfer still required |
| Building of 5+ units, older, rent-controlled | Any | Very likely still fully subject to TOPA |
That last row matters because it's where the "TOPA is basically gone" narrative falls apart for the properties it was never really about in the first place. The D.C. Policy Center modeled the impact of exempting newer buildings from TOPA and found that more than 80 percent of multifamily rental buildings, 2,433 buildings, and 65 percent of multifamily rental units, 91,215 units, would remain fully subject to the law regardless. Of the buildings that stay covered, 93 percent are rent-controlled, and more than 99 percent of DC's rent-controlled buildings remain subject to TOPA no matter how the new-construction exemption is drawn. The reform reshaped the small end of the market, the rowhouses and duplexes this piece is about. It left the larger, older, rent-controlled buildings essentially where they were.
If your building isn't exempt, the clock still runs long
For any DC rental property that doesn't qualify for an exemption, the TOPA process still follows the same sequence it always has, and the timeline is the reason sellers plan around it rather than being surprised by it mid-contract.
- Tenants have 45 days after receiving an Offer of Sale to form a tenant association and file a Statement of Interest, or 30 days if an association already exists
- A negotiation period of 120 days follows
- Securing financing can take another 120 to 240 days depending on the lender
Stacked together, a full TOPA process can run past a year from offer to closing. The RENTAL Act also added a 45-day cooling-off period before a tenant association can assign its purchase rights to a third party, which is meant to give tenants time to get organized rather than sign away leverage on day one, but it also adds a fixed floor to how quickly any assignment can happen.
What this means before you list
If you're selling a rowhouse in Petworth or Brookland with a rented basement unit, the practical sequence looks like this. Confirm how title is actually held, individual name, LLC, trust, or corporation, since that answer decides whether the small-building exemption applies at all. If it does, confirm the March 31, 2026 tenant notice went out, and plan to send a Notice of Transfer at closing even though no offer of sale is required. If your building doesn't qualify, build the realistic TOPA timeline into your listing strategy rather than your closing date, because a buyer's lender will want to see it accounted for either way.
None of this is guesswork you should be doing alone. A title company that handles DC transactions regularly, and an agent who has actually walked a seller through a TOPA notice period, are the difference between a rowhouse sale that closes on schedule and one that stalls on a paperwork question nobody flagged in June.
A few questions worth settling before you list
Does a single-family home with a basement rental unit count as a "2-4 unit" building under TOPA? If the basement unit has its own certificate of occupancy as a separate dwelling, DC generally treats the property as a multi-unit building for TOPA purposes, which is exactly the scenario the RENTAL Act's small-building exemption was written to address.
Do I need to do anything if my building already qualified for an exemption before the RENTAL Act? Confirm whether your existing tenants received the March 31, 2026 written notice. The exemption itself may already apply, but the notice requirement is a separate, dated obligation.
Does the 15-year new-construction exemption apply to a building I'm buying, not just selling? Yes. The exemption runs from the certificate of occupancy date regardless of how many times the building changes hands within that window, which is worth confirming with the seller's documentation before you assume it applies.
Every DC rowhouse with a rental unit carries its own mix of title history, tenant notices, and paperwork trail, and the right answer for one Petworth listing won't automatically be the right answer for the one two blocks over. If you're weighing a sale in DC, Maryland, or Northern Virginia and want a second set of eyes on what your specific building actually qualifies for, Paul Wesley Real Estate is a good place to start that conversation.
