If you lease a house or apartment in the District of Columbia, can your landlord raise your rent?
Under the new D.C. Rent Control Law, which went into effect this week, the answer is yes, but . . .
There is a complex set of formulas, the net result of which allows the landlord some measure of rent increases.
Oversimplified, the new law allows three three basic types of rent increases, including:
Automatic rent adjustments. Under this formula, landlords are permitted to raise rents, with the percentage of the increase tied to the utilities furnished by the landlord.
If the rent covers the cost of no fuel or utilities, for example, a 2 percent increase is authorized. If, on the other hand, the rent includes heat, hot water, general-purpose electricity, cooking fuel and air conditioning, the landlord is authorized a 10 percent increase.
Adjustments based on hardship petition. The basic premise of this portion of the Rent Control Act is that landlords are entitled to a "reasonable return" on their investment. The D.C. Council decided that a reasonable rate is 8 percent. If a landlord can demostrate that he is not receiving this 8 percent return, he may request an increase greater than the one to which he would be entitled under the automatic rent adjustment.
This is called a "hardship petition" and the rent control administrator is required to make a final edcision on the petition within 90 days after it has been requested. If the landlord can substantiate that the apartment building is not generating an 8 percent rate of return, the rent administrator is authorzied to raised the rates.
A complex formula specifically spells out how the landlord's rate of return is be calculated. The landlord is required to list income and operating expenses, but the act is quite specific about "operational expenses." For example, contributions to lobbying efforts to defeat rent control cannot be included in determining a hardship petition.
If 70 percent of the tenants sign an agreement to raise ceilings for each unit, the rental increase will automatically go into effect for the entire building. However, the landlord cannot coerce any tenant into signing this voluntary agreement.
The fact that the new law provides for rental increases does not mean that they will be automatically granted. No landlord can obtain permission to raise rents if there are violation of the housing code. Additionally, the housing accommodation must be registered with the Rent Control Office. The notice of the proposed increase must by given to each tenant 30 days before the effective date of the increase.
The landlord is also permitted to adjust the rents to provide for the cost of any capital improvements to the building. However, the rent increases may be allowed only if the improvement protects or enhances the health, safety or security of the tenant or the habitability of the apartment.
It may also be allowed if the improvement provides a saving in the use of energy, or is designed to comply with environmental protection regulations. The amortized cost must not raise rents more than of 10 percent aboce the rent charged before the completion of the improvement.