The Rebalancing Expectations for Neighbors, Tenants and Landlords (RENTAL) Act of 2025 (the “Act”) became law on December 31, 2025. The Act makes significant changes to the Tenant Opportunity to Purchase Act (“TOPA”), the long-standing District of Columbia law that requires tenants to be given an opportunity to purchase rental properties that are being offered for sale. This alert explains some of the most important changes to TOPA, with an emphasis on changes that are relevant to developers and operators of subsidized affordable housing properties.
New Exemptions
The Act modifies the definition of “sale” or “sell” and creates or changes several exemptions for sales or other transfers that do not trigger the requirement to provide tenants with an opportunity to purchase. Of particular note for owners of affordable housing properties are the following:
- Perhaps most significantly, there is a new exemption for the sale or transfer of interest in a new building that occurs within fifteen years of completion of construction, as documented by issuance of a certificate of occupancy for the property. The new construction exemption imposes two notice requirements for new and existing tenants. First, owners of properties that could qualify for the exemption must notify existing tenants of the exemption within 90 days of the Act’s effective date – in other words, on or before March 31, 2026. Second, a new tenant entering a lease at such a property must be notified of the exemption prior to signing the lease. However, the Act goes on to say that failure to provide the required notices to new and existing tenants does not affect the validity of the exemption.
- Transfers of ownership interests in a business entity that owns a housing accommodation are now defined as a sale if “a majority of the ownership interests” in the accommodation are transferred. “Majority of ownerships interests” is defined as interests associated with the majority of the value of capital, profits, and losses. This introduces a more objective standard for interest transfers than previously existed.
- A new exemption has been added for transfers of interests between or among existing owners of a housing accommodation. This exemption codifies essentially codifies the ruling of a 2019 D.C. Court of Appeals case.
- Transfers from an estate to a charitable organization are no longer exempt.
- The prior exemption for the admission of investors into an entity that owns a housing accommodation financed with low-income housing tax credits pursuant to Section 42 of the Internal Revenue Code (“LIHTC”) has been modified in a way that could present challenges for many LIHTC transactions. The revised exemption now requires the incoming investor to have a minority interest and to make a capital contribution at the time of admission in an amount “equivalent to the percentage interest of the fair market value of the entity or the housing accommodation that the investor is acquiring.”
- There continues to be an exemption for investors exiting a LIHTC project, but it has been reworded so that, among other things, there is no longer a requirement that the transfer does not result in a change in control of the owner entity.
- Transfers of property owned by the District of Columbia Housing Authority are now expressly exempt.
- Housing accommodations with two through four units that are not owned in majority by a business corporation are exempt from TOPA entirely, other than a requirement to provide tenants with notice that an offer to sell the property has been solicited or received.
- There were no substantive changes to existing exemptions for transfers of LIHTC projects that do not result in a change in control, either for purposes of a new LIHTC financing or where the credit period has expired but affordability covenants remain in place.
Also of note, a proposal exemption for covenant-restricted affordable housing did not make it into the final version of the Act.
Notices of Transfer
Transfers of a housing accommodation or an interest in an entity that owns a housing accommodation that fall within one of the statutory exemptions or that do not constitute a “sale” may still trigger the requirement to provide a “Notice of Transfer.” The Act makes some material changes to the Notice of Transfer process.
- Transfers that qualify for certain specific exemptions require that a Notice of Transfer be sent to tenants and to DHCD. For other transfers that do not meet the definition of a “sale” or that fall within one of the exemptions that do not require notice to tenants, the Notice of Transfer need only be sent to DHCD.
- The Act creates some uncertainty as to when tenants can challenge a Notice of Transfer. One provision states that Tenants have 45 days following receipt of the Notice of Transfer to file for administrative or judicial relief. Another provision, however, states that tenants cannot assert a challenge against transfers that fall within one of the explicit exemptions. Previously, tenants had 45 days to provide notice of intent to file for relief, and then an additional 30 days to file for relief, and were precluded from asserting any rights under TOPA if they failed to make the appropriate filing by either deadline.
- The Notice of Transfer no longer needs to be sent at least 90 days prior to the date of the proposed transfer.
Cooling-off Period and Tenant Communications
New to TOPA is a “Cooling-off Period”. Under this new provision, tenant organizations in buildings with five or more units must wait 45 days after receiving a valid offer of sale before assigning their purchase rights to a third party. There is an exception to the cooling-off period for tenant organizations that have received training on TOPA rights and meet other specified requirements.
The Act also introduces new disclosure and non-interference requirements. Any person contacting a tenant or tenant organization related to an opportunity to purchase must disclose to the tenants its beneficial owners and its financial connection to the property. Owners, third party purchasers, and other agents or parties with a financial or other interest in the housing accommodation must inform tenants of their right to training and technical assistance, and cannot attempt to influence how tenants exercise their TOPA rights without fully disclosing the interested party’s financial or other interest in the outcome.
Assignments
Tenant organizations may still assign their TOPA rights to any party they desire and for any consideration they find acceptable. There is a new requirement that an assignee of tenant TOPA rights may only further assign those rights to an entity in which the assignee is an owner, managing member, or officer that can legally bind the entity, and the secondary assignment cannot be for consideration.
Qualified Purchasers
“Qualified Purchaser” has been added as a new concept. Developers can be certified by the Mayor as a Qualified Purchaser based on a process and criteria to be established. Qualified Purchasers are afforded several benefits in the TOPA process:
- A list of Qualified Purchasers will be publicly available online.
- DHCD will provide them with copies of offers of sale within five business days of receipt.
- The Mayor may assign its purchase rights under the related District Opportunity to Purchase Act (“DOPA”) to a Qualified Purchaser.
- Deeds to property transferred to a Qualified Purchaser to whom TOPA or DOPA purchase rights have been assigned are exempt from recordation taxes.
Tenant Support Providers
“Tenant Support Provider” is another new designation added by the Act. While the D.C. government has been funding technical support organizations to educate and assist tenants concerning TOPA rights for several years, the Act formalizes the role of these organizations in the TOPA process. The Mayor will establish a process for certifying Tenant Support Providers. An offer of sale under this Act must include a list of Tenant Support Providers and inform tenants of their right to training and technical assistance from those providers. As with Qualified Purchasers, the Mayor must provide copies of offers of sale to Tenant Support Providers within five business days of receipt.
Online Resources and Filing Requirements
Another new compliance requirement is that any assignment of TOPA rights or “agreement or contract entered into under this title, including development agreements,” must now be filed with DHCD within 30 days of being signed by all parties in order to be valid. The parties must also provide DHCD with certain information about the property and the transaction.
The Mayor is required to establish and maintain an online portal to track and make public a range of information about TOPA transactions, including the purchaser selected by the tenants and the outcomes negotiated by the tenants in exchange for an assignment of TOPA rights. Information will be published on the portal after a transaction has closed.
Within 180 days of the Act’s effective date, DHCD will create and make available a standard template for purchase contracts and rules governing the minimum information required to be included in a purchase contract. However, these template agreements will not be mandatory.
To view the full RENTAL Act in its entirety, please click here.
Should you have any questions about this KH Housing Alert, please contact Aaron O’Toole or Isabel Salas.
This housing alert is intended as a source of information for clients and friends of Klein Hornig LLP. The content should not be construed as legal advice, and readers should not act upon information in this publication without professional counsel. This housing alert may be considered advertising under certain rules of professional conduct. Copyright © 2026 Klein Hornig LLP. All rights reserved.
