New TOPA Law (Effective December 31, 2025) and Other Multifamily Legal Developments

Happy New Year! As we noted in our last Alert (linked here), on September 17, 2025, the Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Act passed on its second reading by the DC Council. It was expected that the RENTAL Act would then go on to the Mayor for approval or veto. However, after the RENTAL Act passed, the title industry expressed concerns relating to the wording of the bill’s TOPA exemption for small buildings with two to four units, as well as single-family accommodations. 

To address these concerns, and other issues, the DC Council scheduled a third reading, where it passed with amendments. The RENTAL Act was then signed by Mayor Bowser on November 13 and transmitted to Congress on November 17. Congress had 30 congressional days (i.e., in-session) to review this. Congress took no action on the RENTAL Act and it became effective December 31, 2025. 

Impact of TOPA Reform. There are many changes relating to TOPA under the RENTAL Act, and we have summarized many of these below. There are a number of provisions of the RENTAL Act that are unclear and subject to interpretation. The DC Department of Housing and Community Development (DHCD) is required to promulgate regulations within 180 days to assist in interpreting TOPA. We met with DHCD last week to offer input on these regulations. We were advised that the process of promulgating and adopting regulations may take at least two years. In the interim, DHCD will endeavor to provide ongoing guidance.   

15-Year Exemption for New Buildings. This is the most important and impactful provision of the RENTAL Act. As of December 31, 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 these exempt properties. 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. A Notice of Transfer does not confer purchase rights to tenants, but rather notifies tenants that the property is exempt. 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. In our experience, legitimate Notices of Transfer are rarely contested and therefore the transactions can generally proceed if the tenants do not register and contest the Notice of Transfer.

In addition to the new requirement for a Notice of Transfer being required for new buildings eligible for the 15-year exemption, a Notice of Transfer continues to be required for transfers that are otherwise excluded from the Offer of Sale requirement. Another new requirement under the RENTAL Act is that foreclosure sales now require a Notice of Transfer.

Revised Definition of Sale. Certain transfers of ownership interests in business entities may be able to avoid the Offer of Sale requirement; however, a Notice of Transfer will continue to be required. Under the RENTAL Act, the transfer of ownership interests in an entity that owns a rental property is a “sale” 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.” The RENTAL Act defines “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.

Tenant Support Providers. The RENTAL Act establishes tenant support providers, which will be certified through a process established by the Mayor through 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 four years after the law 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 permitted 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.

DC Rent Freeze Ballot Initiative. On December 1, 2025, the DC Housing Modernization and Accessibility Act of 2026 was refiled with the Board of Elections (BOE). The DC Housing Modernization and Accessibility Act of 2026 is a ballot initiative that includes an initial two-year rent freeze, followed by a 12-month rent freeze anytime the consumer price index for the DC metro area exceeds 6% for the year. A previous version of the ballot initiative had been withdrawn after the Office of Attorney General and DC Council noted that the measure was not an appropriate ballot measure. The refiled version of the ballot initiative revised the text to exempt the DC government from the rent freeze provisions with the goal of avoiding objections based on budget interference. The BOE will hold a virtual hearing on January 14, 2026, at 10:30 am. The text of the ballot initiative and a link to the hearing can be found here.

DC Bedroom Window Bill. On November 14, 2025, DC Councilmembers Pinto, Nadeau, and McDuffie introduced the Expanding Downtown Affordable Housing Options Amendment Act of 2025 (B26-0469). B26-0469 seeks to amend requirements from the Housing in Downtown Tax Abatement Amendment Act of 2024 to bring ventilation requirements, including windows, in line with market rate units. The current bedroom window requirements make affordable housing units more expensive to construct, especially in office-to-housing conversions with large floorplates that make designing apartments with bedroom window access challenging. Removing the bedroom window requirement will make it easier and less expensive to construct affordable units in office-to-housing conversion developments. The bill also would amend the grant making authority for the Deputy Mayor for Planning and Economic Development (DMPED). The amendment in grant making authority would allow DMPED to support preliminary feasibility analyses for property owners considering office-to-community housing conversions. Community housing is a type of residential development consisting of independently rented bedrooms with shared common space, which has proven popular in Washington State, San Francisco, and across Europe. Although the DC Council does not have the authority to amend zoning regulations to permit community housing by increasing the permissible number of unrelated household members, Councilmember Pinto hopes that by encouraging action by the Zoning Commission and funding feasibility studies, the District can make meaningful progress towards building community housing.

There are a number of other important legal developments impacting multifamily properties in Maryland and Virginia and these will be covered in subsequent Alerts.

Should you have any questions about the matters above, please reach out to our Condo Multifamily Team at CondoMultifamilyTeam@ballardspahr.com.

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