In a ruling that could affect condominium conversions across the city, a D.C. Superior Court judge has placed an indefinite hold on the planned conversion of a Northwest apartment building, ruling that owners of the Embassy apartments took too long to exercise the conversion approval the building received 20 years ago.
There was no specific deadline in the approval, but Judge Gerald I. Fisher said that the ownership group, 1613 Harvard Limited Partnership, did not file necessary papers or notify recent tenants that the building was to be converted and that it continued to accept more favorable tax breaks given to rental apartments in the interim.
"Although no time was specified, by any reasonable measure, a quarter of a century is too long," Fisher wrote in his ruling. "Having failed to exercise its right to convert for 19 years since it acquired the property and for almost 25 years since the property was approved for conversion, Harvard is equitably barred from doing so now."
The District's Department of Consumer and Regulatory Affairs hailed the ruling as a victory. The department, in a rare move, had taken the buildings' owners to court, saying the rights of newer tenants were violated when the owners did not inform residents of the conversion plans. "This decision offers great promise to tenants who are victimized by landlords' illegal actions," said Patrick J. Canavan, director of the Department of Consumer and Regulatory Affairs. "If landlords don't follow the law, we will take action."
The dispute is part of a wider struggle between developers and tenants who contend that the unfettered spread of condominiums has resulted in fewer places for low- and moderate-income residents to live. The District's tenant laws are considered by developers and apartment owners to be too onerous. The laws allow savvy tenants to hold projects hostage with unreasonable demands, owners complain.
Tenants' rights groups, meanwhile, have argued that the current safeguards are inadequate. It is not clear how the ruling will affect hundreds of "shelf condominiums" in which owners have received the right to convert apartment buildings to condos but, for a variety of reasons, have not done so.
The chief lawyer for the defendants in this case, Richard W. Luchs, said the ruling is "confusing" because it seems to apply some standards in current law that were not applicable when the initial approval was granted. Luchs said, contrary to the ruling, that his client met its legal requirements. "We're going to appeal it," he said.
In a countersuit against the District and the tenants, the Embassy's owners said they have been unfairly prevented from completing the conversion to condominiums. That lawsuit is pending.
Under D.C. law, tenants must approve the conversion of an apartment building to condominiums, an agreement that often allows tenants to get cash, discounts on for-sale units and other perks in exchange. In 1985, when the current Embassy owner bought the building, at 16th and Harvard Streets NW, tenants were paid $12,000 per unit in exchange for not buying their units or challenging the conversion plans. But newer tenants in the building said that they were unaware of that arrangement and that, in order to convert, the owners must start the process again.
Tenants were told nearly a year ago that they needed to vacate to make way for condos. But instead of going along, residents complained to the city government, which issued a cease-and-desist order against Embassy owners this March and filed suit in April.
"We were vindicated through the administrative process, and now we've been vindicated in a court of law," said Corine Hegland, a writer, whose rent was $1,000 a month when she moved in 1998 and who now pays $1,268. Finding a similar place, a two-bedroom, she said, would probably cost about $1,000 more in the same neighborhood.
What Hegland and other tenants have argued is that if the 80-unit building, built in 1925, is to be renovated and sold as condominiums, the owners have to negotiate with existing tenants and come to some mutually beneficial solution.
Ultimately, the bargaining boils down to money, and how much both sides will accept to resolve the dispute. Kenneth Loewinger, who represents the tenants, said, "Maybe now the playing field will be a little more level."