How do I navigate the Tenant Opportunity to Purchase Act (if in Portland city limits) so I don't

TLDR

• Portland’s TOPA requires advance tenant notice and right of first refusal before listing.
• Document every step with city forms, service proofs, and tracking dates to avoid penalties.
• Start 60 days early, plan showing rules, and budget legal review and mailing costs.
• Customize timing by neighborhood and your tenant’s plans to keep closings on track.

 

What does the Tenant Opportunity to Purchase Act really mean in Portland?

If your property sits within Portland city limits and is tenant occupied, the Tenant Opportunity to Purchase Act (TOPA) changes how you list and sell. In plain terms, you must notify your tenant in writing before marketing the property and offer them an opportunity to purchase on materially similar terms to what a third party could offer. The City expects a clear process, accurate forms, and proof that you honored the timelines. Noncompliance can expose you to claims that stall your sale and trigger damages.

Why this matters now. Portland’s for-sale market has been steady, with the median sale price near $511,000 and days on market around the high 20s per recent MLS data. With buyers still asking for concessions and occasional 2-1 buydowns, many owners are choosing to sell with tenants in place. That can work well, but only if your TOPA steps and documentation are impeccable.

Here is how I define it as Lisa Mehlhoff:

• A notice and right-of-first-refusal process you must complete before active marketing.
• A timeline driven by city rules, not just your purchase contract deadlines.
• A paper trail that proves compliance (mailing method, delivery dates, tenant responses).

 

How does TOPA work step by step inside Portland city limits?

Think of TOPA as a pre-listing compliance checklist. First, deliver a written Notice of Intent to Sell to each household at least 60 days before you market the home or accept an offer. The notice must include basic sale terms you intend to seek, how the tenant can indicate interest, and the deadline to respond. Use a reliable service method that creates proof of delivery (certified mail and posting, plus email if the tenant has agreed to electronic communications).

Second, offer a bona fide right of first refusal. If your tenant indicates interest within the response window, you must allow them a defined period to submit an offer on materially similar terms. In practice, I recommend mirroring the core business points you would accept from a third party (price range, closing window, any seller credits), while reserving your right to run verification of funds. Keep any counteroffers in writing and preserve all date stamps.

Third, file and retain your documentation. Maintain copies of all notices, delivery receipts, tenant responses, and any declinations. If your tenant declines or does not respond within the specified period, you can proceed to listing and open marketing. If they want to move forward, you negotiate in good faith on similar terms. For current city guidance, forms, and program updates, review the City of Portland Rental Services pages and relevant permitting resources at Portland Housing Bureau Rental Services and Bureau of Development Services.

What if my tenant wants to buy?

When the tenant signals interest, I prepare a simple term sheet that mirrors the seller’s expected price range and typical contingencies. We then set milestones for offer delivery, inspection period, proof of funds or preapproval, and time to open escrow. I recommend that sellers accept an escrow deposit consistent with market norms and require lender preapproval within a set number of days. If the tenant cannot meet milestones, document the failure to perform and proceed to list.

Where does neighborhood context change the game plan?

Neighborhoods shape both your pricing and your TOPA pacing. In SW Portland, areas like Multnomah Village, Hillsdale, and Bridlemile typically attract families and long-term tenants who value school calendars. In North and NE, places like Mississippi and Alberta are classic 15-minute neighborhoods with strong local demand. Near the urban core, Downtown and the Lloyd District may see longer days to pending, so your TOPA window and marketing ramp can be timed to maximize exposure.

• Multnomah Village

- Details - Single family homes and small plexes, popular with professionals and first-time buyers. - MLS pricing for SW Portland has remained resilient, with steady demand for updated homes. - Watchouts - Coordinate showings respectfully in smaller homes with work-from-home tenants. - If you plan to have the tenant vacate at closing, cross-check relocation assistance rules through the Housing Bureau. - Typical timeline - Notice at least 60 days pre-list, collect responses within the first 20 to 30 days, then launch marketing once the window closes.

• North Mississippi and Alberta

- Details - Strong walkability, popular retail corridors, consistent buyer traffic in most seasons. - Competitive interest means tenants may have investors advising them on value. - Watchouts - If a tenant indicates interest, nail down preapproval and proof of funds early. - Coordinate repairs access in tight spaces to keep your listing momentum. - Entry-level path - Offer clear terms with modest seller credits that reflect current concession norms in MLS data (often 1 to 2 percent).

In contrast, if you own in Sellwood-Moreland or West Portland, timing your notice before summer can sync closings with school breaks. If you are selling near Downtown or the Lloyd District, expect a bit more days on market, so use the TOPA window to schedule pre-list inspections and contractor bids. For owners relocating to Washington, the rules differ across the river, so if you are eyeing East Vancouver Washington real estate, or comparing Battle Ground and Brush Prairie WA homes for sale, plan your Portland compliance well before you shop in those markets.

What are the pros and cons of selling with tenants under TOPA?

Pros:

• Your renter could be your buyer, reducing showings and vacancy costs.
• A fully documented process shields you from claims and keeps closing predictable.
• If the tenant declines early, you can streamline marketing and pre-list repairs.

 

Cons:

• Timeline extensions add carrying costs if the tenant explores financing.
• Errors in notice or documentation can delay your sale and invite disputes.
• Showings and inspections require more coordination to protect tenant rights.

 

How do I avoid legal risk, control costs, and still hit my target closing?

Start at least 60 days ahead. Use city-aligned forms and mail with a trackable method. I budget roughly 75 to 150 dollars for printing, certified mail, and professional delivery, depending on unit count. Add a half hour of attorney review of your notice packet if you want extra assurance (expect 300 to 600 dollars with a local landlord attorney). If you plan to have the tenant vacate as part of your sale, evaluate whether Portland’s relocation assistance rules apply to your situation. Review current guidance at the City’s Rental Services portal at Portland Housing Bureau Rental Services.

Set a showing protocol. I outline notice windows, pet and storage considerations, and photography rules in writing. I also schedule pre-list inspections during the TOPA response period so I can price with confidence. In markets where MLS shows average days on market of roughly one month, a two-week head start on disclosures and contractor bids saves money and helps defend your price.

One of my clients in Hillsdale owned a duplex where the upstairs tenant expressed interest after the notice. We set a 10 day window for preapproval and a 25 day financing period. The tenant could not meet the verification timeline, so we documented the missed milestone and launched the listing. We sold near list price within three weeks to a conventional buyer.

Another client in Sellwood had a long-term renter who wanted to buy but needed a small credit to cover closing costs. We matched the credit level I was already seeing in our MLS data and closed on schedule. That avoided vacancy and photography costs and put more net dollars in the seller’s pocket.

If you are moving equity from your Portland sale into SW Portland Oregon homes for sale, or shopping Cedars East Vancouver WA real estate, align your closing dates and financing early. Our team routinely coordinates cross-border timelines so you are never out of sync with Washington offer terms.

FAQs

1) Do I have to let my tenant tour the property with their own agent during TOPA? Yes, once a tenant has indicated interest, treat them like any buyer prospect within reasonable house rules. Provide access for inspections and appraisal on a schedule that respects quiet hours and lawful entry notice. Put all access agreements in writing. If they do not meet agreed milestones or stop communicating, document the lapse and move forward with your public listing.

2) Can I list on the MLS while the TOPA window is still open? You should not publicly market or accept a third-party offer until you have delivered the notice and honored the response period. Listing prematurely can undermine the tenant’s right of first refusal and create legal risk. Complete the notice, track the response deadline, and keep proof of delivery. After the window closes or the tenant declines in writing, proceed.

3) What happens if I skip the notice or use the wrong form? You risk legal claims that can include damages and attorney fees, plus practical delays when buyers discover the compliance gap. The City expects good faith adherence to timelines and documentation. If you discover an error, correct it immediately, re-serve updated notice, and reset dates. Keep every proof of service and communication for your records.

4) Can I offer a voluntary buyout so the tenant moves before listing? Yes, but you must follow Portland’s rules for buyouts and relocation assistance disclosures. Use City-provided disclosure forms and never pressure a tenant. Some situations require payment of relocation assistance, so verify current thresholds and exemptions with the Housing Bureau. Put the agreement in writing and keep a signed copy and proof of payment.

5) Does TOPA apply to single family homes, condos, duplexes, and ADUs? Generally, if the dwelling is within Portland city limits and tenant occupied, you should assume notice and right-of-first-refusal obligations apply. Special situations can exist for owner-occupied units or small owner-move-in scenarios. When in doubt, confirm applicability with the City’s rental services staff or a local attorney and keep written guidance in your file.

6) How does this interact with financing timelines once the tenant offers to buy? Set clear milestones upfront. I recommend a firm deadline for lender preapproval, then a defined period for inspection, appraisal, and loan commitment. If the tenant’s lender cannot meet standard timeframes, you can negotiate extensions or proceed to list after a documented failure to perform. Keep all dates, emails, and signed counters organized for audit readiness.

7) Are there city resources I can use to verify forms and rules? Yes. Start with the official City resources at Portland Housing Bureau Rental Services for rental regulations and disclosures, and the Bureau of Development Services for permitting-related guidance. For broader housing trends and planning changes like the Residential Infill Project – Part 2, review the Bureau of Planning and Sustainability. For national trends, consult NAR Research and FHFA HPI.

Conclusion

The bottom line TOPA does not have to derail your sale. When you start 60 days early, serve correct notices, preserve proof of delivery, and honor a good faith right of first refusal, you dramatically reduce risk. Use the tenant response window to complete pre-list inspections, set showing protocols, and align your pricing with current MLS data. If your tenant declines or cannot perform, you move smoothly into a well prepared public listing. If they buy, you save on vacancy and marketing costs. As your Portland Oregon real estate agent, I will tailor the plan by neighborhood and your goals, whether you are upsizing locally or comparing Battle Ground and Brush Prairie WA homes for sale.

Lisa Mehlhof Homes | License #220603251 Call or text 503-490-4888 https://lisamehlhoffhomes-portlandrealtor.com/