Tenants at the Promenade apartments in Bethesda have started receiving notices that their rents are being increased by around 50 percent and that they must sign one-year leases or move.
The action is a new sign that the converter of the project, American Invsco, is having problems with the conversion and needs money to maintain the building.
When Invsco first started to convert the project to cooperative apartments, it gave tenants notices that they must vacate. Not only allowing but insisting on one-year leases now is perceived by tenants as an indication that Invsco believes it will not be able to complete the conversion any time soon.
Rents are being raised dramatically at the same time. For example, one tenant who has lived at the Promenade for five years reports that he was notified that his rent of $450 a month for a one-bedroom apartment was being raised to $650 a month. He will move rather than pay, he said.
The Promenade conversion has become controversial, with the tenants there waging an intense battle to prevent the building from successfully turning into a cooperative. Invsco, meanwhile, is facing serious financial difficulties and has started selling off some of its holdings.
There apparently is no state or local law preventing Invsco from making large rent increases or requiring one-year leases. That is a reversal of previous policy, however, under which the managemnet refused to give long-term leases and insisted on month-to-month agreements.
Nikki McCausland, the head of the Montgomery County landlord-tenant investigations division, said Invsco is within its rights as long as a proper notification was made to tenants. A landlord in Montgomery County can raise rents by any amount once every 12 months but must give tenants 60 days notice, she said.
The Promenade management contacted the landlord-tenant division before making the notifications, saying the increases were needed to bring in enough money to maintain the property, McCausland said.
"It's up to them. . . . It's a business decision to give an increase this large," McCausland said. "They thought rents were below what the market would bear."
The landlord-tenant office has received two or three calls from the Promenade about the increases, and McCausland said she planned to examine the notifications to make sure they were done properly. From what she could determine over the phone, they apparently were, she added.