Ask a listing agent whether a DC rowhouse or small apartment building is subject to the Tenant Opportunity to Purchase Act this year, and you'll usually get a fast, confident answer. Ask the title company handling the closing the same question, and the answer takes longer. That gap is the story.
Ballard Spahr reports that the District rewrote TOPA through the Rebalancing Expectations for Neighbors, Tenants, and Landlords Act, which took effect December 31, 2025 after Congress let its review period lapse without objection. The new law created real exemptions for small buildings and newer construction, categories of property that used to trigger months of tenant notice and negotiation before a sale could close. For DC buyers and sellers, the plain reading of the headlines is simple: fewer buildings are subject to TOPA now. The part that doesn't make the headlines is that qualifying for an exemption and proving it to a title company are two different jobs, and the second one is where 2026 closings are actually getting stuck.
What Changed on December 31, 2025
Holland & Knight reports that Council Chairman Phil Mendelson introduced the Rental Act at Mayor Muriel Bowser's request, and that it passed the DC Council in September 2025 and was signed by Bowser that November. It became law at the end of the year after its congressional review window closed. It touches eviction procedure and rental licensing too, but for anyone buying or selling occupied property in the District, the TOPA changes are what matter at the closing table.
Three categories now interact in ways that didn't exist before:
| Exemption | What qualifies | What's still required |
|---|---|---|
| New Construction Exemption | Arnold & Porter describes the exemption as covering any multifamily building with a certificate of occupancy issued within the last 15 years, applied retroactively. | Check any tenant notice requirements before relying on the exemption. |
| Small Building (2-4 Unit) Exemption | Buildings with two to four units, as long as the building is not majority owned by a business corporation | Ownership structure must be verified, not assumed, before relying on the exemption |
| Pre-existing Single-Family Exemption | DHCD says single-family homes, including those with an accessory dwelling unit, have been exempt since 2018. | Owner must still give tenants notice within three calendar days of receiving an offer to sell |
The retroactive piece of the New Construction Exemption is easy to miss. A building that received its certificate of occupancy ten years before the law's effective date is now exempt for another five years, not exempt starting from scratch.
The Wording Problem Only Title Companies Caught
Here is the part that didn't get much attention outside real estate law circles. After the Council passed the bill in September 2025, the language covering the small-building exemption drew concern specifically from the title insurance industry, not from tenant groups or landlords. Title companies flagged that the wording created ambiguity about which two-to-four-unit sales would actually clear as exempt, the kind of ambiguity that shows up as a title defect months later rather than a problem anyone catches during negotiation.
That concern was serious enough that the Council scheduled a third reading and passed amendments before sending the bill to the mayor. Bowser signed the revised version on November 13, 2025.
The exemption you're counting on today exists because a title company raised its hand first.
That history matters for anyone buying in 2026. If the industry responsible for insuring these transactions needed a second draft of the law to feel confident issuing policies, a buyer's agent or a seller relying on a generic checklist should not assume the exemption applies just because the unit count looks right on paper.
Why the 2-4 Unit Exemption Needs a Second Look
Two-to-four-unit buildings aren't a small corner of DC's TOPA history. From 2015 to 2020, these buildings generated between 245 and 329 TOPA notices of sale annually, consistently more than the 140 to 275 notices filed each year for buildings with five or more units. This is the segment of the market the new law was built to unstick, which is also why the ownership test attached to the exemption deserves more scrutiny than the unit count does.
The exemption applies only if the building is not majority owned by a business corporation. This is a title and entity-structure question, not a question you can answer by counting doors.
A buyer under contract on a rowhouse converted into three rental units should ask, before removing contingencies, exactly how the current ownership entity is structured and whether that structure has been confirmed against the exemption's criteria. That confirmation is a paperwork exercise, and it's one worth doing before the financing contingency deadline, not during it.
What Still Isn't Finished
According to Nixon Peabody, the Rental Act also created a "Qualified Purchaser" registration system through the Department of Housing and Community Development, intended to give developers and owners incentives like deed and recordation tax exemptions in exchange for registering. As of March 2026, the specific criteria for qualifying were still being finalized. Anyone active in DC multifamily transactions right now should confirm current status directly with DHCD rather than assume the incentive is available as described.
The law also directs the mayor to stand up a public, searchable database tracking TOPA filings. That kind of transparency will eventually make due diligence faster. It isn't the kind of thing a buyer should assume is fully populated and reliable in every case today.
Building the Closing Timeline
Where TOPA still applies, it can still add time to a sale. Where an exemption applies, the paperwork burden shifts from tenant notice to ownership verification. Either way, the sequence that protects a closing date looks the same:
- Confirm the building's unit count and current ownership entity before writing an offer, not after.
- Pull the certificate of occupancy date from DC's permit records to check whether the New Construction Exemption's 15-year window applies.
- Ask directly whether a Notice of Transfer or a formal Offer of Sale has already been filed with the Department of Housing and Community Development.
- Build contract timelines around the exemption that actually applies to the specific property, not the one that seems obvious from the outside.
- Get written confirmation of whether the current owner has already issued any required tenant notices.
None of this replaces legal review on an occupied property with real tenants in place. It does mean a buyer's agent should be asking these questions in the first week under contract, not discovering the answer from a title company three weeks before closing.
A Few Questions Worth Asking Before You Write an Offer
Does TOPA apply to a single-family home in DC? Generally no, and hasn't since 2018, including homes with an accessory dwelling unit. The owner still must notify tenants within three days of receiving an offer to sell.
What if a rowhouse has a small English basement rental unit? That likely falls under the two-to-four-unit exemption analysis, which turns on the ownership entity, not just the unit count. Confirm the structure before assuming.
Can the seller's TOPA exemption be challenged after closing? Title companies now scrutinize this more closely precisely because of the wording concerns raised in 2025. A clean closing depends on documentation, not on the exemption existing in theory.
Is the law itself still being contested? Housing advocates raised concerns about the exemptions during the legislative process, and public data on how the new exemptions perform in practice is still limited. The rules in effect today are the ones to plan around, but this is an area worth checking again before any transaction closes.
Buying or selling occupied property in DC in 2026 means treating TOPA exemption status as a fact to verify, not a fact to assume. If you're weighing a rowhouse, a small multifamily building, or a newer condo conversion anywhere from Capitol Hill to NoMa, Daryl Gayhardt and the team at Gayhardt Partners can walk through the ownership and certificate of occupancy details with you before you write an offer, not after you're already counting on a closing date. Let's Connect.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
