Do You Want to Buy That Home You Are Renting?

by Michele Lerner


Washington, DC is widely considered a tenant-friendly city, with local laws and regulations designed to protect the interests of renters. Among the many rights that tenants can use to their advantage is the Right of First Refusal, which essentially gives the renter the first crack at making an offer on their place if the landlord decides to put it on the market. Established by the Tenant Opportunity to Purchase Act (TOPA), the rules for the right of first refusal vary slightly by property type. However, no matter if the property is a house, condo or co-op, the landlord must provide the inhabitants of the property with an offer of sale. The tenants then have 30 days to respond to the offer.

For one DC resident (who prefers to remain anonymous) the rules worked to her advantage. Seven months into a one-year lease on her Kalorama condo, the owners called to let her know they would be putting the condo on the market. After a moment of panic at the unexpected prospect of becoming a homeowner, she contacted an attorney and a lender and discovered that she would be able to finance the purchase with monthly payments just $5 above what she was paying in rent. While condo fees and various repairs and maintenance on the property were not factored in, no real estate agent fees had to be paid on either side.

The rules for an offer of sale require that within seven days of the tenant requesting information, the owner must produce: a floorplan of the home (if one is available); an itemized list of monthly operating expenses for the home; utility consumption rates and capital expenditures for the previous two calendar years; and the most recent rent roll including a list of tenants and vacant units in the building. (Of course, some of these rules wouldn’t apply to a single-family home.)

The tenant and landlord have a minimum of 60 days to ratify the contract, and then the tenant has another 60 days to arrange financing. From the time the initial offer of sale is made, the tenant has a total of 180 days to reach settlement. If the tenant does not respond to the initial offer of sale within 30 days and another offer is accepted, they have 15 days (this is the right of refusal) to match the third-party sale contract.

Also, if the owner sells the property or signs a contract for a sales price that is more than 10 percent lower than the originally offered price, or if the deal includes some other terms of sale that indicate the owner has not been bargaining in good faith, then the tenant must be given a new offer of sale. Lastly, if 180 days pass without a contract or settlement, the entire process must start again.

The forms for the offer of sale and the right of first refusal, along with instructions, can be found at the DC Department of Housing and Community Development website.

Similar Posts

See other articles related to: right of first refusal, renting in dc, dclofts, dc condos

This article originally published at https://dc.urbanturf.com/articles/blog/do_you_want_to_buy_that_home_you_are_renting/1587


  1. hoos30 said at 12:00 pm on Thursday December 10, 2009:

    Talk about good intentions gone bad. TOPA is one of the dumbest laws man has ever put to paper. 180 days???  Can you imagine any other business where the local government can hold up a transaction for 180 days or more without providing any compensation to the owner?

    “Uh, excuse me Ms. Sculptor, I know you have a signed contract to sell your latest work of art, but Johnny down the street here would really like to buy it instead. He may or may not be able to afford it, but I’m sure it wouldn’t hurt you to hang around for six months and find out.”

  1. jj said at 2:30 pm on Thursday December 10, 2009:

    i’ve seen this not work twice. the first one, the owner marked up the price of the one bedroom 760 sq foot condo to $1.8 million, just so he could get through the right of first refusal and get the tenant out. he then rerented at 2k more than the last tenant was paying. in the second instance, the seller threatened to sue the tenant if they didn’t vacate. the tenant, not knowing they must be offered the option to purchase, vacated and the unit sold for a price the then-tenant could have afforded had they been given the option.

    most renters get that eventually the unit they’re renting will be put up for sale, but by that time, they’ve realized the “issues” with the unit, building or both.

  1. Felicity said at 3:44 pm on Friday December 18, 2009:

    Very interesting article!

  1. mona said at 2:01 pm on Sunday February 14, 2010:

    If I ever decided to sell one of my rentals in particular I would love to have my tenants purchase it. It would come with automatic rent from the basement apt. I actually look forward to presenting them with an option of purchasing it without realtors involved. Could be really nice experience

Comments are closed.

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Looking to Give People A Reason to Stay Past 6pm
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Hitting Its Growth Spurt
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »


Profiles of 14 neighborhoods in suburban Maryland

Small-Town Living in the State Capital
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
DC’s Northern Neighborhood on the Cusp
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Getting a Vibrancy of Its Own
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Not To Be Confused With Takoma Park
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

New Development Could Shake Up Pastoral Peace
A Little Bit of Country Just Inside the District’s Borders
Not to Be Confused With Bloomingdale
Fort Totten
Five Years Could Make a Big Difference
H Street
A Place To Party, and To Settle Down
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
Evolving from a Brand to a Neighborhood
Ripe for Investment Right About Now
The Difference 5 Years Makes
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 neighborhoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »

Upcoming Seminars ▾