Just when you thought -- hoped? -- that there was nothing new to discuss about D.C. rent control, one more very confusing event has occurred. Three judges on the D.C. Court of Appeals have issued a ruling whose effect is to deny most condominium owners the small-landlord exemption the city council intended them to have.
Whether the judges erred in not following the legislative intent of the city's rent control law, or whether the law was poorly written, the effect is the same: it is unfair to many condominium owners since they will be subject to rent control just as if they were large landlords.
The small-landlord exemption, which excuses owners of fewer than five units from rent control, was never a bone of contention in the city's tempestuous renewal of rent control last spring. When voters then overturned portions of that new law in a referendum, the small-landlord exemption was not an issue either.
The court was asked to rule in a case in which a husband and wife who own six condominiums sought to exempt themselves from the law by splitting the units up, so that in theory each owned only three. The tenants argued that this was a subterfuge and that rent controls should continue to apply.
The court surprised both sides in the case by saying it didn't matter how many units the landlord had. It interpreted a part of the rent control law to mean that any building in which five or more units are being rented is under rent control, even if five individuals were renting only one unit apiece. Tenants could then get lowered rents and also sue the owners to recoup the amount of money they would not have had to pay if their units had been rent controlled.
It is unfair that homeowners, who might rent out a room or two, would still be exempt from rent control, while a person who owns only one condominium unit would be under rent control, just because more than four other units he does not own are rented in the same building. It could get even more confusing. A condominium building might slip in and out of rent control continuously, depending on how many units were rented out at any particular time.
The full nine-member court of appeals has been asked to consider the case, but such hearings are quite rare, and so it may be up to the city council to make the language in its law fit the legislative intent of exempting small landlords from rent control. We hope that the city council has not gotten gun-shy because of the referendum vote last November. The council should act, if the full appeals court rejects further consideration or supports the three-judge ruling, to correct the law and continue to exempt the owners of four or fewer condominium units from rent control.