Source: http://www.gdllaw.com/council-of-the-district-of-columbia-considering-amendments-to-rent-control-laws-certificate-of-assurance-with-respect-to-properties-exempt-from-rent-control/?utm_source=rss&utm_medium=rss&utm_campaign=council-of-the-district-of-columbia-considering-amendments-to-rent-control-laws-certificate-of-assurance-with-respect-to-properties-exempt-from-rent-control
Timestamp: 2020-07-03 12:51:39
Document Index: 427292498

Matched Legal Cases: ['§\u200242', '§ 42', '§ 42', '§ 42', '§\u200242', '§\u200242', '§\u200242', '§\u200242', '§\u200242']

By: Richard W. Luchs
The Council of the District of Columbia is considering amendments to a pending rent control Bill which, if passed, would subject to rent control: (a) housing accommodations constructed after December 31, 1975 but before 2005 or (b) rental units added to an existing housing accommodation after January 1, 1980 but before 2005. These housing accommodations are currently exempt from rent control under the “new construction” exemption. Another proposed amendment would limit the “new construction” exemption to 15 years, and thereafter the housing accommodation and added rental units would become subject to rent control.
If this legislation is enacted, the owners of such housing accommodation and rental units will have no protection from the economic effects of rent control. However, you should consider taking action now to attempt to avoid this severe economic change. The current rent control law provides that housing providers who have exemptions for new construction may request a Certificate of Assurance from the Rent Administrator pursuant to D.C. Code Section 42-3502.21. The Certificate of Assurance provides:
“. . . that in the event that any rental unit in any housing accommodation then existing or thereafter constructed on the property covered by the certificate is ever made subject to §§ 42-3502.05(f) through 42-3502.19, or any future District of Columbia law limiting the amount of rent which a housing provider can lawfully demand or receive from a tenant, the owner of the property shall have the right to recover annually from the District of Columbia for so long as the property is used as a housing accommodation, in accordance with subsection (c) of this section, the difference between the annual fair market rental amount and the annual amount of rent that the owner of the property actually receives from the tenants in the housing accommodation.”
We have attached the entire text of D.C. Code § 42-3502.21 to this Memorandum.
You may qualify for a Certificate of Assurance if:
1. Your housing accommodation was constructed or added rental units were constructed pursuant to a building permit issued after July 17, 1985; and
2. You currently have an exemption from rent control on file with the Rent Administrator for that housing accommodation or added rental units.
The statute provides that the application for a Certificate of Assurance is to be applied for when the building permit is issued. However, the statute also provides that the Certificate of Assurance is to be issued by the Mayor “within 30 days of written request of the owner” of the housing accommodation or rental unit exempt pursuant to the “new construction” exemption.
Please note that any request for a Certificate of Assurance must be accompanied by a building permit demonstrating that the housing accommodation or rental unit qualifies for the protections afforded under D.C. Code Section 42-3502.21.
We are available to assist you in requesting Certificates of Assurance to protect you from the negative impact of any legislation which would subject your exempt units to rent control. For further information or questions related to this article, contact the author at: rwl@GDLlaw.com or (202) 452 – 1400.
RWL: tll
Attachment: D.C. Code § 42-3502.21
§ 42-3502.21. Certificate of assurance. (a) Upon the issuance of any building permit for a housing accommodation to which § 42-3502.05(a)(2) or (4) applies after July 17, 1985, the Mayor shall at the request of the recipient of the building permit issue to the recipient thereof concurrently with the building permit a certificate of assurance containing the terms set forth in this section. Within 30 days of written request of the owner of any housing accommodation to which § 42-3502.05(a)(2) or (4) applies, the Mayor shall issue to the owner a certificate of assurance containing the terms set forth in this section. (b) The certificate of assurance shall provide that in the event that any rental unit in any housing accommodation then existing or thereafter constructed on the property covered by the certificate is ever made subject to §§ 42-3502.05(f) through 42-3502.19, or any future District of Columbia law limiting the amount of rent which a housing provider can lawfully demand or receive from a tenant, the owner of the property shall have the right to recover annually from the District of Columbia for so long as the property is used as a housing accommodation, in accordance with subsection (c) of this section, the difference between the annual fair market rental amount and the annual amount of rent that the owner of the property actually receives from the tenants in the housing accommodation. The certificate of assurance shall be executed by the Mayor and the recipient and shall obligate the recipient to use the recipient’s best efforts to construct a housing accommodation as expeditiously as possible on the property which is the subject thereof if there does not then exist a housing accommodation on the property. Each certificate of assurance shall provide that it shall become null and void in the event that a housing accommodation is not constructed on the property within 5 years of the issuance thereof and shall contain the definitions set forth in § 42-3501.03(1) and (3). The certificate of assurance shall be an irrevocable agreement in recordable form and constitute a covenant running with the land. The Mayor shall review the proposed form of the certificate of assurance with Council’s Committee on Consumer and Regulatory Affairs prior to its first use to ensure that the form will be legal, valid and enforceable, contain the terms provided for herein, and otherwise further its intended purpose of stimulating the addition of rental units to the District’s housing stock. (c) The certificate of assurance shall provide that for so long as the property is used as a housing accommodation and is subject to §§ 42-3502.05(f) through 42-3502.19, or any future District of Columbia law limiting the amount of rent which a housing provider can lawfully demand or receive from a tenant, the annual difference between the annual fair market rental amount and the annual amount of rent that the owner of the property actually receives from the tenants in the housing accommodation shall be recoverable by the owner of the property by (1) taking a credit against any present or future District of Columbia real estate taxes payable by the owner of the property whether on the housing accommodation or other property located in the District of Columbia, or (2) seeking specific performances of the certificate of assurance against the District of Columbia, or damages for the breach thereof, in the Superior Court of the District of Columbia. If the Mayor considers the credit to be in excess of the amount the owner of the property is entitled to take as a credit hereunder, the Mayor shall notify the owner in writing of the amount of excess credit. If the Mayor and the owner of the property are unable to agree on the amount of the credit, the Mayor shall have the right to sue the owner in the Superior Court of the District of Columbia to recover any excess credit together with interest thereon at the rate of 18% per year from the date that the Mayor filed to recover such excess credit. Notwithstanding any other provision of District of Columbia law, the Mayor shall have no resort to any other remedy for nonpayment of real estate taxes (to the extent such nonpayment arises from a credit claimed hereunder) until a final judgment is rendered in favor of the Mayor in Superior Court of the District of Columbia.