DC Rent Control Exemptions
In Real Estate by Richard Bianco
I ask most new clients if they are registered for rent control or if they have “perfected an exemption.” Often, the response is, ‘I’m exempt, I only have 1 unit.”
If you read carefully, you’ll realize that is not the question that I asked. “Have you PERFECTED an exemption from rent control?” In DC you may be eligible for an exemption from rent control if you ( not your corporation) own less than four (4) rental units. The so-called “small landlord” rent control exemption is very common, but there are other reasons that a housing provider might be eligible for an exemption.
- Small Landlords (natural person owing an interest in 4 or fewer units); or
- Federally or District-subsidized rental units; or
- Rental units built after 1975; or
- Rental units that were vacant when the Rental Housing Act took effect in 1985; or
- Housing accommodations under a building improvement plan with DCHD.
BUT you are not actually exempt from rent control until you follow all of the steps to make the exemption effective.
-
STEP 1: If your rental property is anything other than a single-family home, you need a certificate of occupancy;
-
STEP 2: File a Business Tax Registration from the Office of Tax and Revenue (OTR);
-
STEP 3: Get a Basic Business License from the Department of Consumer and Regulatory Affairs (DCRA)
-
STEP 4: File a Claim of Exemption form with the Office of the Rent Administrator.
Assuming you can successfully navigate that process, your Rent Control Exemption is still not perfected. To complete the process, you must give the tenant written notice of the exemption at the beginning of the lease or simultaneous with the filing of the Claim of Exemption.
It is important to understand that you are not exempt until you follow all of the steps outlined above. The consequences for raising the rent without a perfected exemption can be severe. If challenged, the tenant is entitled to have the rent rolled back to the last legal level; any rent you collected or demanded above the legal level must be returned to the tenant; you might have to pay treble damages (three times the amount you overcharged); and you are liable for the tenant’s attorney’s fees (not to mention your own). As you can see a $200 rent increase can very quickly turn into a $10,000 problem for a landlord.
If you are a landlord and have questions about rent control or an exemption, please feel free to contact me or use my online scheduler to book an appointment for an initial consultation.
I ask most new clients if they are registered for rent control or if they have “perfected an exemption.” Often, the response is, ‘I’m exempt, I only have 1 unit.”
If you read carefully, you’ll realize that is not the question that I asked. “Have you PERFECTED an exemption from rent control?” In DC you may be eligible for an exemption from rent control if you ( not your corporation) own less than four (4) rental units. The so-called “small landlord” rent control exemption is very common, but there are other reasons that a housing provider might be eligible for an exemption.
- Small Landlords (natural person owing an interest in 4 or fewer units); or
- Federally or District-subsidized rental units; or
- Rental units built after 1975; or
- Rental units that were vacant when the Rental Housing Act took effect in 1985; or
- Housing accommodations under a building improvement plan with DCHD.
BUT you are not actually exempt from rent control until you follow all of the steps to make the exemption effective.
-
STEP 1: If your rental property is anything other than a single-family home, you need a certificate of occupancy;
-
STEP 2: File a Business Tax Registration from the Office of Tax and Revenue (OTR);
-
STEP 3: Get a Basic Business License from the Department of Consumer and Regulatory Affairs (DCRA)
-
STEP 4: File a Claim of Exemption form with the Office of the Rent Administrator.
Assuming you can successfully navigate that process, your Rent Control Exemption is still not perfected. To complete the process, you must give the tenant written notice of the exemption at the beginning of the lease or simultaneous with the filing of the Claim of Exemption.
It is important to understand that you are not exempt until you follow all of the steps outlined above. The consequences for raising the rent without a perfected exemption can be severe. If challenged, the tenant is entitled to have the rent rolled back to the last legal level; any rent you collected or demanded above the legal level must be returned to the tenant; you might have to pay treble damages (three times the amount you overcharged); and you are liable for the tenant’s attorney’s fees (not to mention your own). As you can see a $200 rent increase can very quickly turn into a $10,000 problem for a landlord.
If you are a landlord and have questions about rent control or an exemption, please feel free to contact me or use my online scheduler to book an appointment for an initial consultation.