If you own a small rental building in the District and you've heard that new construction is now exempt from the Tenant Opportunity to Purchase Act, you've heard half the story. The other half is a countdown clock that may have already burned through most of its time, a notice deadline that passed back in March, and a regulator who has publicly said the rules explaining how all of this actually works won't be finished for up to two years. None of that makes the exemption worthless. It does mean a seller who assumes "exempt" means "simple" is going to be surprised at the closing table.
The Fifteen Years Already Started Before the Law Passed
The Rebalancing Expectations for Neighbors, Tenants, and Landlords Act of 2025, known around DC real estate circles as the RENTAL Act, took effect on December 31, 2025 after Congress let its 30-day review period lapse without action. Mayor Muriel Bowser proposed it in February 2025 with the real estate industry's backing, aiming to ease the rent delinquencies that had strained landlords and to make the District more attractive to investors. The version that eventually passed the Council by a 10-3 vote had already been reshaped once: Bowser's original proposal exempted new buildings from TOPA for 25 years, but the Council's Housing Committee, chaired by Robert White, cut that down to 15. Councilmember Brianne Nadeau had pushed for something closer to 3 years. Fifteen was the compromise, and it's the number that matters now.
Here's the part that catches sellers off guard. The exemption isn't a flat 15-year grace period that starts running from whenever the law took effect. It's tied to each building's certificate of occupancy date, and it applies retroactively. A building that received its CO ten years before the RENTAL Act became law is exempt for five more years, not a fresh fifteen. A building that's brand new gets the full window. Everything in between is doing math against a clock that was already ticking before December 31, 2025 arrived.
The exemption doesn't start the day you list. It started the day your building opened its doors.
That distinction matters because DC's full TOPA process, when it applies, is not fast. Under the pre-existing rules, tenants have 45 days after an Offer of Sale to organize and file a Statement of Interest, or 30 days if a tenant association already exists, followed by 120 days to negotiate, and then another 120 to 240 days to secure financing depending on the lender. Stack those together and a non-exempt sale can run past a year before it closes. That's the outcome a seller is trying to avoid by leaning on the exemption. Getting the math on the CO date wrong doesn't just cost paperwork. It can cost the better part of a year.
Being Exempt Still Comes With Paperwork
Qualifying for the exemption doesn't mean the building disappears from TOPA's radar. Owners of newly exempt properties were required to send written notice to every existing tenant explaining the exemption by March 31, 2026, ninety days after the law's effective date. That deadline has already passed. Going forward, every lease signed in an exempt building has to disclose the exemption to prospective tenants before they sign. And when an exempt building actually sells, the owner still has to send a Notice of Transfer, a different and simpler document than the full Offer of Sale, but a filing requirement all the same.
One detail worth knowing if you're a seller trying to figure out how exposed you are: Holland & Knight's summary of the Act notes that failing to send the original exemption notice doesn't invalidate the exemption itself. The requirement exists, but there's no clear penalty attached to missing it. That's not an invitation to skip it. It's a sign of how much of this law is still operating on good-faith compliance rather than settled enforcement, which brings up the bigger issue.
The Agency Writing the Rules Says It Needs Two Years
DC's Department of Housing and Community Development, the agency that administers TOPA through its Rental Conversion and Sale Division, is required to write regulations interpreting the RENTAL Act's more ambiguous provisions. Ballard Spahr's attorneys met with DHCD in early January 2026 to offer input on those regulations and were told the process of promulgating and adopting them could take at least two years. In the meantime, DHCD has said it will provide ongoing guidance rather than finalized rules.
That gap shows up in small but real ways. The Act creates a new category of certified Tenant Support Providers, government-funded counselors who help tenants understand their TOPA rights, and every non-exempt Offer of Sale now has to list the certified providers available at the time of the offer. DHCD's own FAQ, published in late January 2026, stated plainly that there were no certified providers yet. The agency didn't hold its first mandatory in-person certification training for these providers until September 15, 2026, less than two weeks before this was written. For most of 2026, sellers going through the standard TOPA process were technically required to disclose a list of certified providers that didn't exist.
The Qualified Purchaser program is also still being put in place. Under the RENTAL Act, developers and entities can register with DHCD to become Qualified Purchasers, which entitles them to deed and recordation tax exemptions when they acquire a property through assigned TOPA rights. For the first four years, anyone already designated a Pre-Approved Developer under existing DC regulations gets automatic certification. But the specific criteria for new applicants are still being refined, and DHCD is still building the public database that's supposed to track who holds the designation.
What Changes for an Actual DC Closing Right Now
None of this is abstract if you're the one selling. A few things are worth knowing before you list a DC rental property or small multifamily building this fall:
- If your building isn't exempt, tenants in buildings with five or more units can't assign their purchase rights to a third party for 45 days after receiving a valid Offer of Sale, unless their tenant association has already registered with DHCD. In buildings with two to four units, that cooling-off period is 22 days. If your buyer is an investor who's counting on picking up assigned rights quickly, this window is now built into the timeline whether anyone planned for it or not.
- Single-family homes have their own, older exemption. Since July 2018, single-family dwellings have been exempt from TOPA entirely, unless occupied by certain elderly or disabled tenants who signed their lease before specific 2018 dates. That exemption has nothing to do with the RENTAL Act and isn't affected by the 15-year multifamily rule. The two get confused constantly, partly because both get described casually as "TOPA-exempt," when they're governed by entirely different statutes with different histories.
- If you're selling a condo, the resale package remains its own separate bottleneck regardless of TOPA status. Condo associations have up to 10 business days to produce the resale package once requested, and buyers get a 3-business-day window after receiving it to cancel the contract for any reason. Sellers who wait for an offer before ordering the package add unnecessary delay to a closing that could otherwise move faster.
Why the District Rewrote This Law At All
It's worth understanding the pressure that produced this reform, because it explains why the exemption was drawn as narrowly as it was. Landlord advocates, including the National Apartment Association's DC affiliate AOBA, had spent a year campaigning around the argument that TOPA rarely results in tenants actually buying their buildings and more often functions as leverage, with third parties paying tenant associations to assign their rights before a sale can close. Tenant advocates pushed back hard. DC Fiscal Policy Institute's analysis of the bill noted that TOPA has helped create or preserve more than 16,000 units of affordable housing over the law's 40-year history, and argued the RENTAL Act's exemptions would leave tens of thousands of renters without protections they currently hold, with the impact falling hardest in Wards 7 and 8. Both positions are on the record, and the version that passed sits between the two: a real exemption, but a narrower and more retroactive one than landlords originally sought, with reporting and disclosure requirements that keep DHCD in the loop either way.
If you're weighing a sale of a DC rental property or a small multifamily building this year, the certificate of occupancy date is the first number to pull, not the listing price. It tells you whether the 15-year exemption actually protects this specific closing, or whether you're closer to the end of that window than the headlines about the RENTAL Act suggest.
If you're sorting out where your building's TOPA timeline actually stands before you list, Team Nurit can walk through the certificate of occupancy math, the notice history, and what a realistic closing calendar looks like for your specific property.
