Understanding Maryland’s Tenant Right of First Refusal (ROFR): What Realtors, Landlords, and Tenants Need to Know
- Phoenix S. Ayotte, Esq.
- Jun 19
- 6 min read
Heard of TOPA ("Tenant Opportunity to Purchase Act") in District of Columbia? Well, Maryland has followed suit and set up its own tenant protections. Here's what you need to know:
In Maryland’s evolving real estate landscape, new regulation is reshaping the way rental property sales are handled: the Tenant Right of First Refusal (ROFR). Often referred to within the industry as “Maryland TOPA” due to its conceptual similarity to D.C.’s Tenant Opportunity to Purchase Act (TOPA), this law grants qualifying tenants the first opportunity to purchase their rental home before it is sold to a third party. Enacted under the 2024 Renters’ Rights and Stabilization Act (HB 693), this regulation introduces strict compliance requirements that impact landlords, tenants, and real estate professionals alike.
Whether you're a tenant hoping to become a homeowner, a landlord preparing to sell a rental property, or a real estate professional managing listings, understanding Maryland TOPA is critical to ensuring a compliant and successful transaction. This blog provides a breakdown of how the ROFR process works, who it applies to, and how early legal involvement can protect all parties from costly missteps and failed deals.
What Is Maryland’s Tenant Right of First Refusal (ROFR)?
Maryland’s ROFR law requires owners of residential rental properties with 1–3 units to offer their tenants** the first chance to buy before listing or accepting an outside offer. The process can arise in two different ways:
Exclusive Negotiation Period: If the landlord wants to list the property, they must first offer it to the tenant at a reasonable market price they would be willing to accept. The tenant has 30 days to respond—either to accept, decline, or submit a counteroffer. During this period, the landlord is prohibited from listing the property or entertaining outside offers.
Third-Party Offer ROFR: If a landlord has received and intends to accept an offer from a third party, they must provide the tenant the opportunity to match that offer. Again, the tenant has 30 days to respond before the seller can proceed.
All notices must be formally issued and recorded through the Maryland Department of Housing and Community Development (DHCD) online portal, and legal documentation must be kept to demonstrate compliance.
Key Responsibilities for Realtors & Landlords
Submit notices through Maryland’s OTLA (Office of Tenant and Landlord Affairs) portal.
Wait 30 days (maximum) for the tenant's response before listing or closing.
Avoid pricing pitfalls—if a tenant accepts the owner’s proposed price, it’s binding, even if a higher offer emerges later.
Why Legal Help Matters: A real estate attorney can ensure proper notice delivery, verify tenant eligibility, and prevent disputes that could derail a sale.
It’s also important to note that OTLA cannot provide legal advice or intervene in disputes. They function primarily to enforce compliance, publish the Tenant Bill of Rights, and provide referrals.
**Who Qualifies as a Tenant Under ROFR?
Not every occupant qualifies for ROFR. Maryland law narrowly defines eligible tenants as individuals who:
Are named on the lease
Have occupied the property for at least six months
Are currently living in the property (not voluntarily moved out)
Have not been legally evicted
Special Cases Realtors Should Know
Month-to-month tenants qualify if they meet the 6-month rule.
Tenants in the midst of eviction proceedings are still entitled to ROFR rights until a court has issued an eviction order.
Roommates not on the lease do not qualify.
In situations where tenancy is ambiguous, such as oral agreements, the guidance suggests erring on the side of caution by offering the ROFR. A tenant need not physically reside in the unit if they remain an active leaseholder.
Realtor Tip: Before listing, verify tenant status with the landlord. Missing an eligible tenant can void a sale.
When Does ROFR NOT Apply? (Exemptions)
Certain types of property transfers are exempt from the ROFR requirement, including:
Sales to family members or wholly-owned businesses
Eminent domain acquisitions
Court-ordered, bank-owned, or tax sales
Transfers to nonprofit or governmental entities
Sales by estate fiduciaries
Sales involving multifamily properties with four or more units (note: individual condos are treated as single units and are not exempt)
Realtors and landlords must conduct a careful legal analysis to determine whether an exemption applies. Mistakenly assuming an exemption could void a future sale or invite state enforcement.
Legal Risk: Misclassifying an exempt sale can lead to fines. An attorney can review contracts to confirm eligibility.
Timeline and Practical Deadlines
The timeline is a critical component. Once a tenant receives a ROFR or Exclusive Negotiation notice (sent via first-class mail, though other forms of communication are encouraged for clarity), the clock starts:
Tenant Response: 30 days to respond with acceptance, counter, or declination.
Landlord Response: 5 days to reply to a tenant’s counteroffer.
Tenant Reply: 5 more days to finalize the negotiations.
If no agreement is reached, the landlord may proceed to sell—but beware the 10% Rule.
Step-by-Step ROFR Process for Realtors
1. BEFORE LISTING A PROPERTY
Check for tenants: Confirm lease terms and occupancy duration.
Issue Notice: Use the OTLA portal to generate an Exclusive Negotiation Period notice with a proposed price.
Wait 30 Days: Tenants can accept, decline, or counter.
2. If a Third-Party Offer Is Received
Submit a “Right of First Refusal” notice via OTLA.
Tenants have 30 days to match the offer.
10% Rule**: If the owner later accepts an offer more than 10% below the tenant’s counter, they must re-offer the lower price.
Realtor Best Practice:
Encourage landlords to price realistically—if a tenant accepts, the owner can’t back out for a higher bid.
Document all communications to avoid disputes.
The portal is designed to simplify these submissions. Landlords or their authorized agents (including realtors or property managers) can create accounts, complete forms, and upload proof of notice.
The 10% Rule: Protecting Tenants Against Inflated Prices
The law discourages landlords from artificially inflating prices to discourage tenant participation. If negotiations fail and the property is later offered to a third party for more than 10% below the initial offer to the tenant, the landlord must re-offer the new lower price to the tenant.
This rule enforces price fairness and ensures tenants are not strategically priced out of ownership opportunities.
How ROFR Affects Existing Leases & Sales
Leases Remain Valid: Tenants keep all rights (repairs, privacy) during negotiations.
New Owners Assume Leases: If the property sells, tenants stay until their lease ends.
60-Day Non-Renewal Notice: Landlords must give 60 days’ notice if they won’t renew a lease.
Owners cannot force tenants to waive inspection rights, and they cannot restrict financing sources, though proof of pre-approval may be required.
Legal Tip for Realtors: Ensure buyers understand they may inherit tenants. A lawyer can review lease terms before closing.
Tenant Rights & Limitations Under ROFR
Tenants cannot waive their ROFR rights.
ROFR cannot be transferred or assigned to another party (unlike in D.C.).
Tenants may purchase with a friend or family member so long as they’re included on the deed.
A family member may gift the property to the tenant, but again, the tenant must be included on the title.
Request inspections (cannot be waived).
This means lease agreements cannot include waiver language for ROFR, and landlords must proceed carefully with notices, offers, and deadlines. Once a tenant declines in writing, the landlord may proceed with a sale even before the 30-day window closes.
Realtor Consideration: If a tenant wants to buy, connect them with lenders familiar with ROFR transactions to speed up financing.
Overlap With Landlord-Tenant Laws
While the ROFR process is unfolding, all regular lease rights remain intact. Landlords:
Must maintain the property,
Cannot deny entry rights or basic services,
Must give 60 days’ notice for non-renewal of a lease
Must complete repairs required under state or local law, even if the tenant is negotiating a purchase.
If a property is sold to a third party and the tenant does not or cannot buy, their lease continues until its natural expiration.
Portal and Forms
Maryland’s DHCD has developed an online portal to facilitate the ROFR process. Still, realtors and owners must complete a series of forms, create self-certifications, and ensure accuracy when inputting tenant and property data. Even a seemingly small error—such as forgetting to select from the address autofill—can delay compliance.
Helpful links:
Additional resources:
If you are unsure how to complete this process, consult with your lawyer or title counsel before making a listing go live.
We would like to acknowledge the Maryland Office of Tenant and Landlord Affairs (OTLA), and in particular Emily Button, Partnerships and Outreach Manager, whose presentation and materials provided valuable context in preparing this blog.
Need Expert Guidance?
If you’re in Virginia, Maryland, or Washington, D.C. (DMV) and need legal support to navigate Maryland’s Tenant Right of First Refusal (ROFR), Phoenix S. Ayotte, Esq. of Future Counsel is here to help! We assist realtors, landlords, and tenants with notices, negotiations, compliance filings, and contract reviews to keep your transaction on track. Whether you're preparing to list, responding to a tenant offer, or simply unsure where to start, we’ll guide you through every step with clarity and care.
