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Jan. 20 Housing Is Risky Business

By David Nakamura
Washington Post Staff Writer
Thursday, November 20, 2008

When Barack Obama clinched the Democratic presidential nomination in June, Margaret Knox Baum, a supporter from Boulder, Colo., logged on to Craigslist and booked three rooms in a Capitol Hill townhouse for inauguration week.

Friends thought she was jumping the gun, but Baum wanted to beat the rush. She signed a five-page contract, sent in a $940 deposit and rounded up 14 others to go with her to Washington.

Five days after Obama won the general election, Baum received an e-mail from Reid Management, the Washington company that owns the townhouse. To her dismay, it said her contract would be canceled "due to circumstances beyond our control."

"This puts us in a spot," said Baum, a freelance journalist. "We've already booked airfare. And we can't pay $3,000 a night for an apartment."

Baum, 54, got caught up in an inauguration-driven property frenzy in which thousands of people in the Washington area have come out of the woodwork to make a quick buck by offering their houses for rent in January.

But the arrangements -- with deals being brokered largely between amateurs, often online and with little personal contact -- are fraught with peril on both sides, including fights over money and property damage in addition to issues regarding insurance, liability and fraud, experts said.

Baum got her deposit back, but she has not received an explanation about why her contract was canceled. She said she suspects that the management company realized it could make more money.

"There's potentially all kinds of problems here," said Kevin McParland, a lawyer who specializes in landlord-tenant cases in the District and Maryland. "The owner could have problems with people trashing the place. The renter could have problems if they come and the place is not available when they get here."

Similar markets have developed in other places that have been home to major events, including Park City, Utah, which hosted events during the 2002 Winter Olympics. Myles Rademan, a Park City spokesman, said that some reservations were canceled after the 2001 terrorist attacks, leaving some property owners scrambling. But, he said, the complaints were not widespread, perhaps because planners had spent years preparing residents.

"We warned people, saying, 'Don't price gouge. The world is coming here. We're welcoming the world,' " Rademan said. "We hope that places like the Chamber of Commerce in D.C. are going through a campaign to just ask people to be nice."

The D.C. Chamber is developing housing advice that will be posted on its Web site. Deposits are recommended, officials said, as is a review of what is covered by insurance.

The District and its suburban jurisdictions have regulations that govern property rentals, including licensing, certification of occupancy and inspections. But the laws are difficult to broadly enforce for an event such as the inauguration, D.C. officials said, and they are considering relaxing the restrictions on a one-time basis. They have declared that property owners will not be taxed on their earnings for that week.

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