What changed with DC TOPA in 2026?

The RENTAL Act of 2025 took effect December 31, 2025. Key investor changes include TOPA exemptions for many 2–4 unit buildings, a 15-year TOPA exemption for new construction from certificate of occupancy, cooling-off periods on TOPA assignments, and new Notice of Transfer requirements even on exempt sales.

Are 2-unit rowhouses in DC still subject to TOPA?

Many 2–4 unit buildings owned by natural persons are exempt from full TOPA Offer of Sale requirements under the RENTAL Act — but Notice of Transfer to tenants is still required. Buildings owned by business corporations may still face TOPA. Verify entity structure and DHCD guidance with counsel.

What is the 15-year TOPA exemption for new construction?

Sales within 15 years of permanent certificate of occupancy may be exempt from TOPA Offer of Sale if landlords disclosed exemption in leases and provided written notice to existing tenants by March 31, 2026. Notice of Transfer still applies on sale.

How does TOPA reform affect DC fix and flip loans?

Shorter TOPA friction on exempt 2–4 units and new construction improves flip and BRRRR velocity — but DHCD regulations may take up to two years to finalize. Budget legal review on every occupied acquisition until rules are settled.

Blog

DC RENTAL Act and TOPA Reform — Investor Guide (2026)

Published July 16, 2026

By Jason Taken · Principal, Jaken Finance Group

DC TOPA after the RENTAL Act — 2–4 unit exemptions, 15-year new construction rule, Notice of Transfer, and how investors underwrite flip and BRRRR timelines in 2026.

DC TOPA reform landed January 1, 2026 when the RENTAL Act of 2025 rewrote the Tenant Opportunity to Purchase Act. Official background: DC Office of Tenant Advocate — TOPA reform · Full walkthrough below.

Full compliance hub: TOPA, DOB & DC investor compliance guide · DC fix-and-flip permits

RENTAL Act timeline

Date	Event
Sept 17, 2025	DC Council passes RENTAL Act (2nd reading)
Nov 13, 2025	Mayor signs
Dec 31, 2025	Effective after congressional review
Mar 31, 2026	Deadline for written TOPA exemption notice to existing tenants (15-year new-build rule)
2026–2028	DHCD regulations expected — interim guidance applies

What changed for investors

1. Two-to-four unit exemption (major)

Many 2–4 unit buildings — a huge share of DC flip and BRRRR stock — may be exempt from full TOPA Offer of Sale when owned by natural persons, not business corporations.

Investor action:

Confirm entity on title before modeling “TOPA-free” exit
LLC-held rowhouses may not qualify for this exemption
Notice of Transfer to tenants still required on sale

2. Fifteen-year new construction exemption

Buildings within 15 years of permanent certificate of occupancy may be exempt from TOPA Offer of Sale for any sale in that window (not just first sale).

Catch: DHCD and DOB have signaled CO alone may not prove new construction vs. substantial renovation — permit history matters. Do not assume exemption from marketing copy.

Landlord duties:

Disclose exemption in new leases
Provide written notice to existing tenants by March 31, 2026 (if applicable)

3. Cooling-off on TOPA assignment

Tenants/associations face cooling-off periods before assigning TOPA rights to third parties — 22 days on 2–4 units, 45 days on 5+ units — reducing quick assignment to investor buyers.

4. Qualified Purchaser program

Developers may register as Qualified Purchasers for certain incentives (deed/recordation tax relief). Criteria still evolving — monitor DHCD.

What did NOT go away

Requirement	Still applies?
DOB violations	Yes — permits guide
HPRB / HPO historic review	Yes — Capitol Hill
Rent control / RAD	Yes — exemptions guide
Recordation tax 2%+	Yes
English basement CO	Yes
Notice of Transfer	Yes — even on TOPA-exempt sales

Underwriting matrix (2026)

Asset	TOPA Offer of Sale	Typical flip term
Vacant 2-unit, natural person seller	Often simplified	8–12 months
Occupied 2–4 unit, exempt	Notice of Transfer only	10–14 months
Occupied 5+ unit	Full TOPA risk remains	12–18 months
New build under 15 yr CO	Exempt if documented	6–12 months rehab
LLC-owned 2-unit	Assume TOPA until counsel clears	12–18 months

Programs: fix and flip loans Washington DC · DSCR loans Washington DC

BRRRR and DSCR impact

Good news: Faster sale and refi paths on exempt 2–4 units improve seasoning for DSCR refi.

Caution: Lenders still want RAD rent-control classification correct (exemptions guide). TOPA reform does not cap rent growth on controlled units.

Collar-county hedge

Sponsors still hold in Arlington, Bethesda, Silver Spring to avoid DC friction entirely — DMV cross-border investing.

Worked example — Petworth two-unit (post-RENTAL Act)

Buy: $720,000 occupied two-unit — natural person seller, exempt from Offer of Sale.

Cost line	Pre-reform model	2026 model
TOPA counsel	$5,000–$8,000	$2,000–$4,000 (Notice of Transfer)
Timeline add	90–120 days	30–45 days
Hard money term	18 months	12–14 months
Interest carry @ 11%	Higher	~$8K–$15K saved

Spread improvement is real but not automatic — verify exemption with title and counsel.

Risks in 2026

Regulatory ambiguity — DHCD rules may take two years; litigation over “new construction” claims
LLC ownership — exemption lost if title structure wrong
Missed March 31, 2026 tenant notices on new-build exempt stock
Rent freeze ballot — separate from TOPA; see investor hedging in rent control guide
Overpaying for “TOPA-free” marketing without legal memo

Pre-qualify · Hard money lenders Washington DC · (833) 264-7776

Not legal advice — consult DC counsel on TOPA, Notice of Transfer, and exemption eligibility.