LEGAL QUESTION: Applicability of Rent Control regulations on a Property which was Exempt prior to 2006

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Please send any legal questions relating to real estate, rentals, buildings, renovations or other legal items to princeofpetworth (at) gmail (dot) com, include ‘legal question’ in the title and each week one question will be featured. I was curious about the following questions:


When I purchased by historic row home in 1994 (near Eastern Market on Capitol Hill),
the English Basement 1-BR rental already had a legal Certificate of Occupancy as
initiated by previous owners. The first month after I purchased my home, I applied to
have the C of O transferred to my name, passed the required Safety Inspection, etc. So
I’ve had a legal C of O on the rental unit since that time.

I have always been told that my unit was exempt from DC Rent Control regulations.
I was unaware of the new 2006 Rent Control Act that required all rental units to get a
Business License and register as Exempt from Rent Control until my tax lawyer this year
advised me to do so, because “even though the law has been on the books for awhile,
he said….DC is just now starting to enforce the law.” I have never been informed by
the District of Columbia that I need to get a Business License and register to get an
Exemption from Rent Control. However, I voluntarily spent a day at DCRA in July this
year doing just that.

My current tenant has rented this basement rental from me for 13 years, since
September 1997. He signed a one year lease and has been on month-to-month ever
since then. Because I knew the tenant as a friend and business associate prior to him
becoming my tenant, I voluntarily kept the rent considerably below market rate all these
years…..starting at $625/month in 1997 and only $1,000/month through August of this
year. (The current market rate for my well-maintained garden-apartment unit in this nice
location is now $1,850-$2,000/month.) Due to increased expenses, higher mortgage
due to built in capital improvements to the house over the years, property tax increases,
etc., I made the hard decision to raise the rent to $1,250/month effective August 1, 2010
and gave the tenant advanced notice that it would again raise to $1,500/month effective
August 1, 2011.

More questions and answers after the jump.

Even though the rent at $1,250 is about 30% or more below market rate, my tenant
still cannot afford to stay in the apartment and has given me 30 days notice than he
intends to vacate the unit by October 31, 2010. Concurrently, since he is 61 years old,
he secured free legal counsel from the Legal Counsel for the Elderly, and is requesting
reimbursement for all rental increases imposed since 2007 when his rent was still only
$675/month — stating that since I was not properly registered with DCRA at the time of
those rental increases, that they are subject to DC Rent Control regulation and some other
claims that would only apply if under Rent Control. I’ve been notified by the DC Office
of Administrative Courts to appear at a Mediation scheduled for Nov. 12 to discuss this.

Question 1: I know that “ignorance of the law is not a defense,” however….should
not the District of Columbia also take some responsibility to notify its citizens who
may be subject to new provisions of law that may affect them — especially since I had
a legal C of O registered with the DC Government and have filed a Schedule C for
my rental income with my Federal and DC tax returns annually, I should be on a list
somewhere in DCRA of people to be notify, wouldn’t you think? Should a landlord be
held liable if DC posts a law in the ether and expects them to be clairvoyant about it?

Question 2: Even though I did not know to register for a Rent Control Exemption

in 2006, the fact remains that my rental unit has never been deemed a Rent Control
property, and would never be considered such when an application for an exemption
was filed at any point. It is not like this claim is coming from a tenant that moved in
after the 2006 law was in affect. We are talking about a tenant who has been in my
unit since 1997 when it was universally accepted that my 1-bedroom English basement
apartment was not subject to Rent Control. Should I be liable NOW, for this tenant’s
claims that would only apply if the unit was considered to be under Rent Control?

Question 3: Asked another way, how can a property that never was subject to rent
control, and never would be whenever an application was made to DC for an exemption
due to current criteria that explicitly states that buildings with 4 units or less are Exempt
from Rent Control… can the landlord ever be subject to claims under the Rent
Control Act of 2006 — especially when the original lease for this tenant was signed in

Question 4: Reading the Guide for Landlords & Tenants provided by DC prepared after
the Rent Control Law of 2006 was enacted, it does say that all rental units must registered
as being Rent Controlled or Exempt from Rent Control. What is DOES NOT say is that
if a registration has not been made by the landlord/owner, the property is automatically
considered to be under Rent Control and the provisions of Rent Control apply. So how
can anyone reading this make that assumption? I can see the DC Government fining
someone for not registering as required, but CANNOT see how a landlord can be subject
to liability for claims of Rent Control violations when the unit has never been considered
rent control and would never be designated as one if and when an application was made
to the DC Govt. What are my rights here? (My voluntary application for a DC Business
License and Exemption from Rent Control was in July. I passed the Safety Inspection in
August, and the License was issued on September 4, 2010. However, the rental increase
from $1,000 to $1,250 per month was effective on August 1 after having given the tenant
2 months notice prior to the increase.)

Question 5: I read somewhere online that if a Tenant claims status as “Elderly” with
special consideration given to him because of that designation, the Tenant must apply
for that designation to the Rent Administrator and also inform his Landlord of that in
writing. My tenant is using a pro bono attorney from the Legal Counsel for the Elderly.
The attorney did write me to inform me that my tenant sought their services and she is
representing him, but is that the same thing?

I appreciate any advice (or legal ammunition) you could provide to me.


Given the complexity of your questions and the fact that your tenant is represented by counsel, I would advise you to consult with an attorney prior to the mediation scheduled for November. With that said, we are happy to explain how the rent stabilization exemption process works and to discuss the defenses that are typically used by landlords when they unknowingly violate the rent stabilization requirements.

As you now know, landlords in DC are required to obtain a business license and register their rental units with the DC Department of Housing and Community Development – Rental Accommodations Division (“RAD”). The registration form that a landlord files with RAD contains a section whereby the landlord can claim an exemption from the DC rent stabilization requirements if certain criteria are met. For example, individuals who own 4 or fewer rental units are exempt from the rent stabilization requirements provided that they claim their exemption.

Many people think that a landlord is automatically subject to the rent stabilization requirements if the landlord does not claim its exemption. The penalties for violating the rent stabilization requirements are found in DC Code § 42-3509.01(a), which states that “[a]ny person who knowingly (1) demands or receives any rent for a rental unit in excess of the maximum allowable rent applicable to that rental unit under the provisions of subchapter II of this chapter … shall be held liable by the Rent Administrator or Rental Housing Commission, as applicable, for the amount by which the rent exceeds the applicable rent charged or for treble that amount (in the event of bad faith) and/or for a roll back of the rent to the amount the Rent Administrator or Rental Housing Commission determines.” This is why the attorney who wrote to you is asking for a refund of the rental increases. Additionally, she is only asking for the increases imposed since 2007 because the statute of limitations requires that tenants file a challenge to any type of rent adjustment within three years after the adjustment takes effect.

While you might technically be subject to the rental stabilization requirements for the time period before you properly claimed your exemption, the tenant cannot simply demand a rollback of the rent and expect to get it. In Boer v. District of Columbia Rental Housing Com., 564 A.2d 54, 57 (D.C. 1989), the DC Court of Appeals addressed a landlord’s failure to properly claim an exemption from the rental stabilization requirements and found that the statute establishes penalties only for “knowing” violations. The Court held that “a landlord who could prove that he or she was reasonably unaware of the requirement of filing a claim of exemption would necessarily demonstrate that the violation was not a ‘knowing’ one.” (NOTE: If you look up the Boer case you will see that the Court refers to DC Code § 45-1591(a) when discussing the potential penalties; this statute has since been recodified as DC Code § 42- 3509.01(a))

To prove that you did not knowingly violate the statute, you should argue that (1) you are not a regular landlord (this is a single English basement apartment), (2) you charged a reasonable rent (take documentation of comparables to demonstrate that the rent is still well below market rates), and (3) as soon as you were alerted to the fact that you had to register the rental unit and claim the exemption, you did so.

Regarding your last question about elderly tenant status, a tenant is defined as elderly if the tenant is at least 62 years of age and demonstrates the claim to the satisfaction of the DC Rent Administrator. If a rental accommodation is not exempt from the rent stabilization requirements, the rent charged to elderly tenants can only be increased by the change in CPI-W (it is CPI-W plus two percent for non-elderly tenants). In order to qualify for this special treatment, the elderly tenant must file a form with the DC Rent Administrator and provide a copy to his/her landlord. However, if the rental accommodation is exempt from the rent stabilization requirements, a landlord can raise the rent for elderly tenants without restriction.

This response was prepared by Mark G. Griffin and Patrick D. Blake of Griffin & Murphy, LLP. The material contained in this response has been prepared for informational purposes only and should not be relied upon as legal advice or as a substitute for a consultation with a qualified attorney. Nothing in this response should be considered as either creating an attorney-client relationship between the reader and Griffin & Murphy, LLP or as rendering of legal advice for any specific matter.

11 Comment

  • This seems to fall into the “no good deed goes unpunished” category.

  • wow … your tenant sounds like a “great” guy

  • Dear new landlords, even if you have CofO and Business license (which is suppose to indicate that your unit is registered with rent control office), your application process might not be over yet. Do verify with the rent control office that your name, not the old owner’s name, is listed on their book with the exemption /rent control number.
    Same happened to me. Received my Business license, but a year later I came across an information that made me call the rent control office, and they told me that the previous owner’s name is listed as having the exemption, not me, so I had to go change that.

  • I’d be interested to see the cost breakdown here.

    Tenant wants X.

    Lawyers to fight this guy will cost Y.

    Once you get the tenant out, you can raise the rent to not just $1500/month, but all the way to market rate of $1850 to $2000 a month which would net you Z.

    Settle and let the old man move to cheaper rent in Shaw or some other place?

  • I really appreciate the response with legal citations provided by Griffin and Murphy LLC as well as the reader responses. I had an additional question as well, but didn’t want to overload G&M’s email inbox the first time!

    Evidently, my Exemption from Rent Control was effective on July 19, the same day I applied for it in person from DCHD and was given the stamped/dated paperwork back. However, the Business License – also applied and paid for on July 19 – still had to pass a safety inspection (which it did in August), and I received the actual approved Business License in the mail in September with an “issue date” of Sept 4. However, the license states that the period of coverage is from July 1, 2010 through June 30, 2012. (They allowed me to put July 1 as a start date even though my date of application was July 19.)

    Question 1: Was my (new) Exemption really effective on July 19th?

    Question 2 (Different issue/same tenant): Even though there is a provision in my tenant’s original 1997 lease that states he cannot take on a roommate or sublet without my written consent to do so, and I reiterated that fact to both my tenant, copying his pro bono lawyer in mid-July, my tenant evidently took on a (roommate to help offset his rent) on August 1 while I was out of town on vacation, and even upon request to both he and his lawyer, will not give me the name of the person or how much this illegal roommate is paying him rent. My tenant responded and left a voice message on my cell phone stating that yes, he has taken in a roommate to help offset expenses, and said I could file a Notice of Eviction if I wanted to, but “we all know” that that process takes 3 to 4 months in DC and he would be gone by that time anyway.”

    Should I go ahead and file a Notice of Eviction on my tenant now even though he is vacating in 2 weeks and says the illegal roommate is leaving at that time also?

    I would think renting to a roommate or co-tenant without my permission would be considered a fraudulent offense (fraudulently renting space that’s not his to rent)? Where do I file for remedy? Should I file with Small Claims court for reimbursement of the $750/month for the 3 months he has taken rent from the other person?

    Am I allowed to also ask for damaages beyond this amount to cover lawyer fees, etc?

    What are the statue of limitations for me to file this?

    What are the statue of limitations for “Squatters Rights” in DC in case the illegal roommate decides to say he wants to stay? (Even though my roommate indicated to me about the illegal roommate, I wasn’t for sure he actually had one until recently because I never saw anyone coming in or out, etc. I thought my tenant was saying it just to aggravate me here at the end of his tenancy. But I now have proof, talked to the illegal roommate, etc….but he has been there 2 1/2 months now.)

    Do I need to file this prior to the tenant vacating on October 31 (about 3 weeks away), or will they still accept my claim after he has moved out?

    Thanks! JJ

  • Couldn’t you just have given the guy 30 days notice to move out because you wanted to “renovate” the unit?
    Seems like he is just fighting back because you were trying to jack his rent by over 50%. I’d be upset if I were a good tenant, paying on time and being asked to leave my home of 13 years or pay a whole lot more…

    • Response to 3rd Street Design: I can see how you would intially respond the way you do without the full picture of what is going on. His rent early this year (prior to me giving him notice of increase) was 50% below market rate for a unit about a block from Eastern Market – inset garden/brick walk front, landscaped brick patio access in back, top of the line upgrades ($1,100 Bosch dishwasher, full size washer/dryer, remodeled marble bath with Jacuzzi tub, refurbished kitchen, new electric furnace and A/C, tenant pays electric only – I pay gas, water/sewer, and have given him free extension to my Direct TV service also not stipulated in lease, allowed custom paint colors and chose his own carpeting when upgraded, allowed pets in the past, accommodated late rent payment with two postdated checks almost every month for the past 5 years, on and on). Not only does this tenant not comprehend that he was getting an upgraded unit at 50 % below market even though I demonstrated I’ve saved him almost $35,000 over the past 13 years by not charging full market rate like I could have charged for an Exempt unit….not only is this recognized or appreciated, the one or two minimal rent increases in the past he has not spoken to me for weeks and called me “gouging and self-serving” as well as bad-mouthed me to friends and neighbors. I finally reached a limit and thought….given, this is a cancer survivor on limited income I have voluntarily been accommodating for a decade or more, but why should I continue to be so magnanimous to someone who doesn’t recognize nor appreciates it and goes further to bad-mouth me to others? I had reached a tolerance threshold that was a point of no return after years of this attidude and decided I needed to raise the rent to help cover property improvements, increased taxes, etc. Being Exempt, I could have raised it to $1850 or more without question, but – AGAIN – I tempered my increase to only $1,250/mo. Granted, that is a 25% increase, but still $6-800/mo below market rate. It took me awhile to make that decision, but decided to look after myself for once. …So it wasn’t a matter of the landlord just “jacking up the rent” because he can. As a landlord of a unit Exempt from Rent Control, I’ve voluntarily accommodated an unappreciative tenant 13 years too long.

      • Good luck – and hope you get it empty and on the market soon. I have friends moving back to DC desperately looking for a nice place under $1,500.00.

  • Whoever came up with such a stupid requirement – that you have to apply for an exemption to a regulation that doesn’t even apply to you? If 4 units is the cut-off for rent control it should just be the cut-off – period.

  • DC tenant/landlord law needs to be revisited. Just reading the FAQ above, the ability to sue someone by paying just $10, and the ability to delay evection just by filling yet another form, and so on is just a joke. People need to take responsibility and this type of lawsuit should not take months, but few weeks. In the above situation, the landlord should be able to evict the tenant immediately (within days) when he found out that the tenant had taken a roommate without the landlord’s permission. It is simple; the tenant did something against the lease.

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