DC’s New Coronavirus Law Requires Rent Payment Plans
The DC Council’s third emergency Coronavirus law requires landlords to give payment plans for missed rent payments during the public health emergency and for a year thereafter. While the law is fairly clear about who it applies to it contains few details about the required contents of a payment plan. Notwithstanding the gaping holes in this legislation, here are the details that we have now.
1. Covered landlords MUST offer payment plans to eligible tenants.
All commercial landlords and any residential landlord owing five or more rental units must enter into a payment plan with an eligible tenant for rent that comes due during the public health emergency or for a year thereafter. To be eligible a tenant must notify the landlord, in writing, of an inability to pay rent directly or indirectly related to the public health emergency. While the landlord is permitted to request supporting documentation from the tenant to demonstrate the financial hardship, it is unclear what “directly or indirectly related” to the public health emergency means. Per the Rental Housing Act’s mandate, be assured that the provision will be interpreted heavily in favor of the tenant.
2. What landlords are required to do
The law creates several responsibilities and prohibitions for landlords with respect to payment plans. First, each covered landlord with eligible tenant(s) must develop a payment plan, notify tenants of its availability, and tell them how to apply. Second, landlords must permit all eligible tenants to participate in the plan for all rent that comes due during the covered period. (public health emergency plus one year.) Further, any fee or penalty arising out of the plan, must be waived. Finally, landlords may not report the plan or any payment subject to the plan to a credit reporting bureau as “delinquent.”
3. Terms of the payment plan
So far, the law only addresses three (3) required or permissive terms of a payment plan. First, it must be in writing. Second, the plan may allow landlords to apply the security deposit to satisfy the amounts owed. Third, the plan may not require lump sum payment in excess of the monthly amount in the plan. There are no further details on the minimum requirements. Can the landlord require a missed payment to simply be paid the following month? Can a landlord reduce the rent by half for a period of time? It is completely unclear. However, a tenant can submit a petition to the Rent Administrator alleging noncompliance with the largely undefined law. At this time, the Office of the Rent Administrator will not give any guidance on landlord obligations outside of the language of the statute. For now, we know very little about the requirements of a payment plan. During the last two (2) months, the law has been fluid and subject to constant clarification. The best we can hope for is the Council or Agency giving landlords specific guidelines for compliance. In the meantime, landlords should consult with a lawyer about next steps. If you are a landlord in need of consultation on this, or any other issue, you can contact me or book an appointment to speak with me using my online scheduling tool.