The DC Real Estate Contract: How a Washington, DC Home Purchase Contract Works

Most DC resale contracts are written on forms published by the Greater Capital Area Association of REALTORS® (GCAAR): a regional sales contract plus a stack of DC-specific addenda and disclosures. The forms are copyrighted, so this post does not reproduce them. It explains how a DC real estate contract fits together, the statutes underneath it, and where deals go sideways before settlement.

If you also work across the river, the Virginia real estate contract guide covers the same ground there.

The form set, and why the version matters

GCAAR says its forms, "comprising contracts, addenda and disclosures, cover both Montgomery County, MD and the District of Columbia," (GCAAR contract forms).

GCAAR also says it "updates its forms at least three times each year in February, July, and October," so confirm both sides are on the current release. And treat the contract as a package: financing, inspections, condo or co-op terms and DC-specific disclosures sit in addenda and separate documents, which is often where the answer to a settlement-day question lives.

Contingencies are where the form set does most of its work. Which ones apply, how long each runs, and what notice exercises or removes one are chosen by the parties. Read those blanks as carefully as the price. A financing or appraisal deadline that nobody calendared is a deadline that passes. (See what contingent means.)

The seller disclosure statement, and when a buyer can walk

DC requires a seller disclosure for most small residential sales. Under D.C. Code § 42-1301, the requirement applies to real estate "consisting of not less than one nor more than 4 residential dwelling units," and "only where the purchaser expresses, in writing, an intent to reside in the property." Listed exemptions include court-ordered transfers, foreclosure sales, sales by a nonoccupant fiduciary, transfers within families or between co-tenants, and never-occupied new construction.

The timing rule is in § 42-1302. For a sale, the statement is due "before or at the time the prospective transferee executes a purchase agreement." If it arrives after the buyer signs, the buyer gets a way out:

"...the prospective transferee may terminate any of the foregoing by delivering written notice of termination to the transferor not later than 5 calendar days after receipt of the disclosure statement by the prospective transferee, and any deposits made by the transferee to the transferor shall be promptly returned to the transferee."

— D.C. Code § 42-1302(c)

What people miss: that termination right can end before the 5 days are up. Under § 42-1302(d), it is waived if not used before the earliest of settlement, the buyer's occupancy, or a written mortgage application, but only where the lender disclosed in writing that applying ends the right. If a disclosure arrives late, resolve it before the loan application.

Condominiums: the resale certificate and a 3-business-day window

Under D.C. Code § 42-1904.11, the seller has to get the condominium instruments and a resale certificate from the association and deliver them "on or prior to the 10th business day following the date of execution of the contract of sale by the purchaser." The certificate covers planned capital expenditures, reserves, the association's financials, pending suits or judgments, and insurance.

Then the buyer gets a review period:

"...the purchaser shall have the right for a period of 3-business days following the purchaser's receipt of the condominium instruments and certificate ... to cancel the contract by giving notice in writing and returning the condominium instruments and certificate to the seller..."

— D.C. Code § 42-1904.11(a-1)(2)

A few details decide real files:

• Late documents keep the buyer's exit open. If the package is not delivered by the 10th business day, the buyer can cancel in writing at any point before receiving it (but not after conveyance).
• Delivering early does not shorten the window. If the documents are handed over before the buyer signs, the 3 business days start when the contract is signed.
• A cancelling buyer gets the deposit back "without delay or deduction."
• The association sets the pace. The statute gives the association 10 days from a written request to provide the certificate. Sellers should order it the moment the contract is ratified.

Cooperatives are a different transaction: the buyer takes an interest in a cooperative housing association rather than a deed, and DC taxes it under its own rules (§ 42-1103(a)(2)). Requirements vary by building, so ask for the co-op's process before writing the offer.

Tenant-occupied property: TOPA comes before the contract closes

DC's Tenant Opportunity to Purchase Act starts from a broad rule:

"Before an owner of a housing accommodation may sell the housing accommodation or issue a notice to vacate for purposes of demolition or discontinuance of housing use, the owner shall give the tenant an opportunity to purchase the housing accommodation at a price and terms that represent a bona fide offer of sale."

— D.C. Code § 42-3404.02(a)

How it plays out depends on the property:

• Single-family homes, and a single rented condo or co-op unit, are generally outside the opportunity-to-purchase process. § 42-3404.09 says the subchapter does not apply to them "except as provided in this section." One exception applies to every owner: within 3 calendar days of receiving or soliciting a written offer, an owner who intends to sell must give the tenant written notice that an offer was received or solicited. A narrower exception keeps full purchase rights for certain elderly tenants and tenants with disabilities who signed a lease by March 31, 2018 and moved in by April 15, 2018. For those tenants, the statute sets its own response, negotiation and financing periods.
• Buildings with 2 to 4 rental units are covered. The DC Department of Housing and Community Development (DHCD) publishes separate offer-of-sale forms for them, with and without a third-party contract (DHCD rental conversion and sale forms). In other words, a signed contract with a buyer can exist while the tenant's rights are still running.
• The offer of sale has required contents. Under § 42-3404.03, those include a statement of whether a third-party contract exists, and the owner must provide a copy within 7 days of the tenant's request.

DHCD's Rental Conversion and Sale Division administers TOPA (DHCD). For a buyer, a tenant-occupied property can have a settlement date that depends on steps outside your control. Whether TOPA applies, and whether it was satisfied, are legal questions for a DC real estate attorney; the title side needs the paperwork early. (Glossary: tenancy.)

Lead-based paint in pre-1978 homes

If the home was built before 1978, the federal lead disclosure rule applies. It covers "target housing," defined as "any housing constructed prior to 1978," with limited exceptions (40 CFR § 745.103). Before the buyer is bound, the seller must provide an EPA-approved lead hazard pamphlet and disclose any known lead-based paint or hazards (40 CFR § 745.107). The buyer also gets an inspection opportunity:

"...the seller shall permit the purchaser a 10-day period (unless the parties mutually agree, in writing, upon a different period of time) to conduct a risk assessment or inspection for the presence of lead-based paint and/or lead-based paint hazards."

— 40 CFR § 745.110(a)

Buyers can change or waive that period in writing. Make it a deliberate choice, not a box checked without reading.

Deposits

The contract sets the deposit amount, who holds it and when it is due. The statutes above require its return after a late-disclosure termination (§ 42-1302(c)) or a condo cancellation (§ 42-1904.11(a-1)(3)). Otherwise it turns on the contract's terms and on whether each notice was timely and in the required form. A deposit dispute is a question for an attorney, not the settlement agent.

Taxes: who owes them by statute, and who pays by contract

DC charges a recordation tax and a transfer tax when the deed is recorded. By statute, the transfer tax is "imposed on the transferor" (D.C. Code § 47-903), and the parties to a recorded deed are "jointly and severally liable" for the recordation tax (§ 42-1103(c)). How the contract divides them is negotiated, so check it on every offer. Our DC closing costs guide walks through the buyer and seller side, and the DC closing cost calculator will put a number on it.

A qualifying first-time District homebuyer can get a reduced recordation tax rate, and the statute says "the entire benefit of the reduced recordation tax rate shall be allocated to the grantees" (§ 42-1103(e)). Eligibility has income, residency and property requirements, and DC's Office of Tax and Revenue publishes the current limits each fiscal year (OTR, ROD 11). See the DC first-time homebuyer tax benefit for how to claim it at settlement.

Line up title early

Liens, estate issues and TOPA paperwork surface only when someone starts looking, and they are cheaper to fix in week one. Once the contract is ratified, get a title quote and open title. For premium ranges, see title insurance cost in DC.

Will Rapuano handles title and settlement across DC, Maryland and Virginia with Pruitt Title. If you are writing or listing a DC contract, especially a condo or a tenant-occupied property, get in touch and send the ratified contract as soon as you have it.

This page explains how DC purchase contracts customarily work and the statutes behind them. It is general information, not legal advice about your transaction. For legal questions about a contract, talk to a DC-licensed attorney.