The Biz Law Advisor

Wednesday
May082019

Think You Are Able To Still Take That Rent Increase? Think Again…

Two pieces of legislation went into effect recently. These new laws significantly impact DC residential Landlords’ rights.

The first substantive change to the Rental Housing Act relates to how rent increases may be taken only on the amount a Tenant actually pays to the Housing Provider, rather than on the permissible rent on file with the Department of Housing and Community Development (“DHCD”). Previously, in order to make the rental unit more marketable, Housing Providers in a Lease could provide rent concessions to Tenants. Housing Providers would continue to preserve their right to the higher rent by making a filing with DHCD to increase their rent annually in accordance with DC law. However, the new law now removes Landlord’s ability to preserve the higher rent increases. It requires Landlords to base increases on the amount a Tenant actually pays rather than on the permissible rent on file with DHCD. As a result, rent concessions have become the base figure upon which increases are based.

As of the date of this posting, the new notice of rent increase forms have not been published by DHCD; however, the Act does contemplate that Landlords will certify on the notice of rent increase form the amount of rent actually paid.

The second substantive change to the Rental Housing Act impacts vacancy exemptions. If the rental unit became vacant, Landlords were previously permitted (one time per every twelve months) to either increase the permissible rent by 10% or up to 30%, based on a comparable unit in the same housing accommodation.

Under the Vacancy Increase Reform Amendment Act of 2018, the amount of rent increase a Housing Provider may take based on vacancy depends on the duration of the departing Tenant’s occupancy. If the previous Tenant occupied for ten years or less, then that vacancy increase is limited to 10%. If the previous Tenant occupied for ten years or more, then the rent increase may be 20%.

This Vacancy Increase Reform Act is subject to District of Columbia appropriations, and at this point the reduction in estimated tax revenue to the District is not sufficient to allow for the actual implementation of this Act. When the District determines it is acceptable to the reduction in tax revenue paid by Landlords, the Act will be implemented.

 

 

 

The material on this website is not offered as legal advice on any matter and should not be used as a substitute for seeking professional legal advice.