“$100,000 in penalties recovered from a Columbia Heights landlord for illegally converting a rent-controlled apartment building into a short-term rental hotel”

Photo by PoPville flickr user Miki J.

Ed. Note: Back in May we spoke about “Are there legal issues with the way they are using this building as a hotel and long-term rental space?”

From a press release:

“AG RACINE DEMANDS LANDLORDS EXPLAIN SHORT-TERM RENTALS AT 33 RESIDENTIAL APARTMENT BUILDINGS

OAG Takes Action to Protect Long-Term Renters and Affordable Housing Supply

Attorney General Karl A. Racine today sent letters to 19 building owners and managers of 33 residential apartment buildings in the District seeking answers about short-term rentals being offered alongside long-term leases. The purpose of the Office of the Attorney General’s (OAG) requests for information is to determine if the landlords misled their long-standing residents about the short-term rental operations and if they violated District consumer protection or rent control laws. In a separate action related to short-term rentals, OAG recovered $100,000 in penalties from a Columbia Heights landlord for illegally converting a rent-controlled apartment building into a short-term rental hotel.

“Under the law, landlords are required to tell tenants if there are short-term rentals in their buildings,” said Attorney General Racine. “We’ve heard complaints that some landlords misled their long-term residents about these rentals. Today’s letters put building owners and managers on notice that short-term rentals must comply with the District’s consumer protection and rent control laws.”

The practice of permitting short-term rentals (less than 90 days) within apartment buildings without adequate disclosures to long-term residents is misleading. Under the District’s Consumer Protection Procedures Act, OAG can take action against any business that sells a good or service to a consumer in a misleading or deceptive manner. Additionally, the District’s Rental Housing Act prohibits the conversion of apartments into any type of temporary or transient accommodation.

Protecting Long-Term Residents

Landlords across the city appear to be operating businesses that offer blocks of apartments for short-term rentals at their residential buildings. These short-term rentals are usually listed on vacation rental websites for stays as short as one night. The rentals are also concentrated in neighborhoods like Logan Circle, Dupont Circle, Capitol Hill, and Chinatown, decreasing the supply of housing available for rent in areas where demand is the greatest and few affordable options exist. Long-term residents have complained short-term rentals attract disruptive visitors and create security concerns. They also complain that some landlords kept them in the dark about the operations.

In today’s letters to 19 owners and managers of 33 residential apartment buildings, AG Racine seeks answers about their short-term rental businesses and what, if any, disclosures are provided to long-term residents about the operations. Specifically, AG Racine is asking landlords to explain the circumstances under which they offer short-term rentals, the number of units they rent on a short-term basis, copies of any contracts they have signed with business partners to provide these rentals, and copies of notices or disclosures the landlords have provided to their long-term residents. The letters are directed to building owners and managers who appear to be operating or permitting short-term rental businesses in their buildings and does not address individual owners or renters who rent out their properties on “sharing economy” platforms.

A sample letter is available here

Preserving Existing Affordable Housing

A recent OAG investigation revealed that Jarek Mika, the prior owner of a 21-unit apartment building located at 3504 13th St NW in the Columbia Heights neighborhood, had converted the entire rent-controlled building into short-term transient rentals in violation of the Rental Housing Act. Mr. Mika had also offered the apartments for amounts significantly higher than permitted under the rent control laws. In OAG’s settlement, Mr. Mika was required to pay $100,000 in penalties and costs to the District and stop offering illegal short-term rentals at any property in the District.

A copy of the settlement is available here

How to Report Scams, Fraud, and Deceptive Business Practices
OAG’s Office of Consumer Protection works on your behalf to stop deceptive and unethical business practices. The Office investigates complaints from District consumers, helps to resolve disputes, and, when necessary, takes legal action against businesses that take advantage of District residents. Consumers can contact OAG with consumer complaints at (202) 442-9892 or [email protected].”