D.C. Code tit. 42 § 42-3404.05

Contract negotiation.

In Force
Verified 10/26/2026 · Next check 11/2/2026
effective 10/12/2026District of ColumbiaCash for Keys

Operative Text

D.C. Code tit. 42 § 42-3404.05
(a) Bargaining in good faith. -- The tenant and owner shall bargain in good faith. The following constitute prima facie evidence of bargaining without good faith:

(1) The failure of an owner to offer the tenant a price or term at least as favorable as that offered to a third party, within the periods specified in §§ 42-3404.10(a)(4) and 42-3404.11(4) , respectively, or within 90 days of delivering an offer of sale to an elderly tenant or a tenant with a disability pursuant to § 42-3404.09(c) , without a reasonable justification for so doing;

(2) The failure of an owner to make a contract with the tenant which substantially conforms with the price and terms of a third party contract within the time periods specified in §§ 42-3404.10(a)(4) and 42-3404.11(4) , respectively, or within 90 days of delivering an offer of sale to an elderly tenant or a tenant with a disability pursuant to § 42-3404.09(c) , without a reasonable justification for so doing; or

(3) The intentional failure of a tenant or an owner to comply with the provisions of this subchapter.

(a-1) Reduced price. -- If the owner sells or contracts to sell the accommodation to a third party for a price more than 10% less than the price offered to the tenant or for other terms which would constitute bargaining without good faith, the owner shall comply anew with all requirements of §§ 42-3404.09(c) , 42-3404.10(a) , and 42-3404.11 , as applicable.

(a-2) Financial assurances. -- The owner may not require the tenant to prove financial ability to perform as a prerequisite to entering into a contract. The owner may not require the tenant to pay the purchase price in installments unless the owner provides deferred purchase money financing on terms reasonably acceptable to the tenant. The owner may require the tenant to prove that the tenant, either alone or in conjunction with a third party, has comparable financial ability to the third-party contractor before the owner will be required to grant deferred purchase money financing to the tenant on the same terms and conditions agreed between the owner and the third-party contractor. If the tenant can prove comparable financial ability alone, the owner may not require the tenant to secure a third-party guarantor. This proof cannot be required as a prerequisite to contracting. It may be required only as a prerequisite to the owner granting deferred purchase money financing at settlement.

(a-3) Transfers of interest in a partnership or corporation and master leases. -- In the event of a transfer of interest in a partnership or corporation or in the event of a master lease or agreement that is considered a sale within the meaning of § 42-3404.02 , but which does not involve a transfer of record title to the real property, the owner shall be bargaining in good faith if the owner offers the tenant the opportunity to acquire record title to the real property or offers the tenant the opportunity to match the type of transfer or agreement entered into with the third party. With respect to either type of offer, all provisions of this subchapter apply.

(b) Deposit. -- The owner shall not require the tenant to pay a deposit of more than 5% of the contract sales price in order to make a contract. The deposit is refundable in the event of a good faith failure of the tenant to perform under the contract.
Source: Legislative text reproduced verbatim
Plain English

D.C. Code § 42-3401.01 et seq. § 42-3404.05 establishes a mutual duty of good faith bargaining between property owners and tenants during the sale process, particularly in the context of tenants' rights of first offer or purchase. Owners must generally offer tenants terms at least as favorable as those offered to outside buyers, and if a subsequent sale to a third party occurs at a price more than 10% below what was offered to the tenant, the owner must restart the required notice and offer process. The provision also limits deposit requirements to no more than 5% of the contract sales price and restricts owners from demanding proof of financial ability as a condition of entering into a contract.

Written by anthropic/claude-sonnet-4.6 · Reviewed on October 13, 2026

Plain English — not legal advice.

For Property Managers

Under D.C. Code § 42-3401.01 et seq. § 42-3404.05, compliant property owners generally ensure that any offer extended to a tenant matches or exceeds the price and terms offered to third-party buyers within the timeframes set by related code sections. Owners document their good-faith efforts throughout negotiations, avoid requiring tenants to demonstrate financial ability before signing a contract, and cap any required deposit at 5% of the contract sales price. When a sale to a third party occurs at a price more than 10% below what was offered to the tenant, owners typically restart the full statutory notice and offer process to remain in compliance.

General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.

For Tenants

D.C. Code § 42-3401.01 et seq. § 42-3404.05 gives tenants the right to expect good-faith bargaining from an owner during a potential sale, including receiving terms no less favorable than those offered to outside buyers. If an owner demands a deposit, it cannot exceed 5% of the contract price, and that deposit is refundable if the tenant fails to perform in good faith. Tenants who believe an owner has not bargained in good faith—for example, by offering worse terms than a third party received—may wish to consult a tenant-rights organization or legal aid provider familiar with D.C. housing law to understand available remedies and complaint processes.

General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.

Generated October 13, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.

Effective Timeline

Current
Oct 12, 2026
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References Out

Rules and statutes cited by this regulation

References In

Rules and statutes that cite this regulation

D.C. Code § 42-3404.02
D.C. Code § 42-3404.02
D.C. Code § 42-3404.02b
D.C. Code § 42-3404.02c
D.C. Code § 42-3404.02d
D.C. Code § 42-3404.03
D.C. Code § 42-3404.03
D.C. Code § 42-3404.03a
D.C. Code § 42-3404.06
D.C. Code § 42-3404.06
D.C. Code § 42-3404.09
D.C. Code § 42-3404.10
D.C. Code § 42-3404.10
D.C. Code § 42-3404.11
D.C. Code § 42-3404.11
D.C. Code § 42-3405.03
D.C. Code § 42-3405.03
D.C. Code § 42-3405.03a
D.C. Code § 42-3405.03a
D.C. Code § 42-3405.12
D.C. Code § 42-3402.10
D.C. Code § 42-3402.10
D.C. Code § 42-3404.02
D.C. Code § 42-3404.02d
D.C. Code § 42-3404.03
D.C. Code § 42-3404.03
D.C. Code § 42-3404.03b
D.C. Code § 42-3404.09
D.C. Code § 42-3404.09
D.C. Code § 42-3404.09
D.C. Code § 42-3404.10
D.C. Code § 42-3404.11
D.C. Code § 42-3404.11
D.C. Code § 42-3404.11
D.C. Code § 42-3404.11
D.C. Code § 42-3404.16
D.C. Code § 42-3404.32
D.C. Code § 42-3404.33
D.C. Code § 42-3404.36
D.C. Code § 42-3405.03
D.C. Code § 42-3405.03
D.C. Code § 42-3405.03
D.C. Code § 42-3405.04
D.C. Code § 42-3405.06
D.C. Code § 42-3405.07
D.C. Code § 42-3405.12
D.C. Code § 42-3402.03
D.C. Code § 42-3402.08
D.C. Code § 42-3402.08
D.C. Code § 42-3405.12
D.C. Code § 42-3405.12
D.C. Code § 42-3401.03
D.C. Code § 42-3402.04
D.C. Code § 42-3402.06
D.C. Code § 42-3401.03
D.C. Code § 42-3404.02
D.C. Code § 42-3401.03
D.C. Code § 42-3402.04
D.C. Code § 42-3402.08
D.C. Code § 42-3403.02
D.C. Code § 42-3404.01
D.C. Code § 42-3404.01
D.C. Code § 42-3404.01
D.C. Code § 42-3404.10
D.C. Code § 42-3404.11
D.C. Code § 42-3404.31
D.C. Code § 42-3405.01
D.C. Code § 42-3401.03
D.C. Code § 42-3401.03
D.C. Code § 42-3402.01
D.C. Code § 42-3402.02
D.C. Code § 42-3402.08
D.C. Code § 42-3403.07
D.C. Code § 42-3404.01a
D.C. Code § 42-3404.02
D.C. Code § 42-3404.02c
D.C. Code § 42-3404.10
D.C. Code § 42-3404.13
D.C. Code § 42-3405.03
D.C. Code § 42-3405.03a
D.C. Code § 42-3401.01
D.C. Code § 42-3401.01
D.C. Code § 42-3402.01
D.C. Code § 42-3404.01
D.C. Code § 42-3404.01
D.C. Code § 42-3404.02
D.C. Code § 42-3404.03
D.C. Code § 42-3404.08
D.C. Code § 42-3404.10
D.C. Code § 42-3404.11
D.C. Code § 42-3404.11
D.C. Code § 42-3404.11
D.C. Code § 42-3404.31
D.C. Code § 42-3404.33
D.C. Code § 42-3404.33

Related Rules

§ 151.31
TENANT BUYOUT NOTIFICATION PROGRAM
§ 151.33
TENANT ANTI-HARASSMENT
§ 47a-20f
Offer of incentive to tenant in foreclosed property to vacate.

Source Information

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