In case you missed it, the Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Act of 2025 is LIVE (effective December 31, 2025)!
This legislation made the most significant modifications to the Tenant Opportunity to Purchase Act (TOPA) in years, with expanding exemptions, new notice requirements, restrictions on tenant communications and reshaping compliance mechanics that will have a direct impact on acquisitions, dispositions, and lease-up strategy across the District.
Over the coming weeks, Iâm excited to break down key components of the Act in a short series, hashtagTOPA_TUESDAY hashtagRENTALActEdition, focusing not only on TOPA exemptions in the RENTAL Act, but also on procedural shifts, implementation requirements, and maybe even a little bit of transaction-level implications, we’ll see. đ
Now, I want to start with this provision because it carries an impending compliance deadline:
New Construction Exemption (15-year Exemption)
Under the RENTAL Act, the sale of a newly constructed building is now exempt if the sale occurs within 15 years after issuance of a permanent Certificate of Occupancy.
This exemption is retroactive, which means new buildings that received a Certificate of Occupancy before the law became effective on December 31, 2025 may still be able to utilize this exemption for the remaining portion of the 15-year window following issuance of the Certificate of Occupancy.
Compliance Alert
The law requires owners who intend to utilize this exemption to do the following:
– Provide written notice to existing tenants that the building qualifies for the new construction exemption (deadline: March 31, 2026, 90 days from the lawâs effective date),
– Include written notice of the exemption in new leases going forward, and
– Issue a Notice of Transfer to tenants prior to the sale, as required by law.
If you are evaluating a sale, recapitalization, or lease-up strategy for a newer asset, or are unsure whether this exemption applies, now is the time to confirm eligibility and ensure proper compliance.
Does this peak your interest? Let’s talk about it! Feel free to reach out to me if you’d like to walk through it.
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