In a new Housing Huddle, we discuss the Tenant Opportunity to Purchase Act (TOPA) in Washington, DC and what buyers, sellers, and multifamily developers need to know after updates in the Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Act of 2025.
Understanding TOPA timelines, exemptions, and closing risks can help prevent title issues that can delay and potentially jeopardize a real estate transaction. If you need guidance navigating TOPA or the changes introduced in the RENTAL Act, our team at Nixon Peabody is available to support you throughout the process and help you assess potential risks.
What is TOPA in Washington, DC? How does it impact multifamily real estate transactions?
TOPA gives tenants the first opportunity to purchase their building when an owner decides to sell and also allows tenants to assign their purchase rights to a third party if they prefer another buyer. This law affects many deals in DC, so both owners and purchasers must understand these rights and obligations early to ensure compliance and avoid disrupting or delaying a sale.
What triggers TOPA in DC?
Tenants’ rights to purchase are triggered by a “sale” of certain properties, defined broadly to include traditional third‑party transfers as well as certain internal ownership transfers, unless an exemption applies. Key exceptions include specific LIHTC investor transfers, certain minority‑interest transfers, and, under the RENTAL Act, an exemption for new construction if the sale occurs within 15 years of construction, making it important to analyze any transfer carefully.
What timelines are associated with tenants’ opportunity to purchase under TOPA?
After receiving an Offer of Sale, tenants have 45 days to form a tenant association and file a Statement of Interest—or 30 days if a tenant association already exists. They then have 120 days to negotiate with the owner, followed by another 120–240 days to secure financing depending on lender needs. Collectively, these steps mean the full TOPA process can last more than a year.
What should buyers and sellers consider before entering into a sales contract?
Parties should work with a title company knowledgeable about TOPA, incorporate TOPA timelines clearly into the purchase agreement, and communicate proactively with residents to reduce misunderstandings that could lead tenants to assign their rights to another buyer.
What is DOPA, and how does it relate to TOPA?
The District Opportunity to Purchase Act (DOPA) allows the District government to purchase property when tenants decline to exercise their TOPA rights, typically to preserve affordable housing. Historically, this has been exercised infrequently.
What is a “Qualified Purchaser” under the RENTAL Act?
The RENTAL ACT creates a system where developers and owners may register with the District’s Department of Housing and Community Development to become “Qualified Purchasers,” entitling them to certain incentives like deed and recording tax exemptions. The specific criteria for becoming a Qualified Purchaser are still being refined, but those active in the DC market should monitor it and consider registering.
