I often receive inquiries from people who have contracted to buy a home in DC with tenants living in it, only to find that their closing date keeps getting pushed back. When we trace the cause, it usually leads to the acronym TOPA.

TOPA stands for Tenant Opportunity to Purchase Act, which is a law in DC that requires landlords to notify tenants before selling a rented property and, in some cases, gives tenants the first opportunity to purchase the home.

For those who have bought homes in other states, this process can be unfamiliar. Those accustomed to transactions in Maryland or Virginia often find themselves confused in DC.

First, let's look at single-family homes. As of July 3, 2018, the amended law generally exempts single-family homes from TOPA.

However, there are exceptions. Tenants who are 62 years or older or have disabilities, and who signed a written lease by March 31, 2018, and moved in by April 15, still retain their purchasing opportunity.

So, even for single-family homes, the process cannot be skipped. Many people overlook this aspect.

The seller must notify the tenant in writing within three days of receiving a purchase offer. On the same day, a copy must also be sent to the Office of Tenant Advocacy (OTA) and the Department of Housing and Community Development (DHCD) in a traceable manner.

The tenant has 20 days from the date of notification to assert their status as a senior or disabled person in writing. If they do not respond within the deadline, they are considered to have waived their TOPA rights.

If a protected tenant responds, the situation becomes more complicated. The seller must resend a formal Offer of Sale, and the tenant can express their intent to purchase within another 20 days.

Just adding up the numbers, we have a three-day notification, a 20-day response, and another 20 days for expressing intent. If negotiations or paperwork adjustments are included, it's easy to predict that the process will take more than a month longer than a typical transaction.

If the tenant is not protected, there are two paths. If the tenant signs a waiver stating they do not have TOPA rights, the process can proceed immediately; otherwise, they must wait for 20 days.

This is where practical differences arise. Sellers with good relationships with their tenants can quickly obtain the waiver, while others have no choice but to wait.

One more thing to keep in mind: when a protected tenant transfers their rights, the compensation they can receive is limited to the right to live in the home under the existing lease for 12 months after the sale.

This is important for buyers. It means that if you buy the home with the intention of moving in, you could be blocked from doing so for a year.

Now, let's compare this to 2-4 unit buildings. The RENTAL Act, effective December 31, 2025, significantly changes the regulations for small buildings.

According to various law firm interpretations, 2-4 unit buildings that are not majority-owned by a corporation are exempt from TOPA purchasing rights under certain conditions. However, the obligation to notify tenants of the sale remains.

The specific wording of the exemption conditions varies slightly among interpretations. The DHCD's implementation rules are still being finalized, so it's essential to verify whether individual buildings are affected.

The new law also revises the definition of a tenant. Month-to-month tenants are included, and not having a written lease does not exclude them from rights.

If you have verbally rented your home to relatives or friends, you need to be especially cautious. Just because there is no paperwork does not mean they are not tenants.

The regulations for single-family homes have not changed since the RENTAL Act, according to the title industry. Therefore, you can separate single-family homes based on the 2018 standards and small multi-family homes based on the new 2025 law.

So, what should buyers do? Before making an offer, it's important to ask the listing agent when the TOPA notice was issued and whether there has been a response from the tenant.

It's also wise to schedule the closing date with some buffer time, considering the TOPA deadlines. Title companies often will not proceed with closing if the DHCD process is not resolved.

Clearly state in the contract whether the property will be occupied by the tenant or if it will be vacated. Leaving this ambiguous can lead to more complications after closing.

If you are purchasing for investment purposes and plan to generate rental income, you should also consider the existing lease terms and whether rent control applies. Just passing TOPA is not the end of the process.

Personally, I recommend that when viewing homes with tenants in DC, you prioritize checking the paperwork over negotiating the price. The cost of a two-month delay in closing can often outweigh a few thousand dollars in price reduction.

Given the complexity of the conditions and the ongoing interpretation, it's essential to consult with a DC real estate attorney or title company during actual transactions. The most accurate information and forms can be obtained directly from the DHCD and OTA websites.

A home with tenants is not necessarily a bad property. However, if the price is the same, a vacant home and a rented home have different timelines, and knowing the difference can lead to very different outcomes.