Q: I recently heard that the District of Columbia Court of Appeals has issued a startling decision that may affect all landlords who own condominium units. Apparently, there is some question as to whether landlords such as I, who own only one condominium unit are exempt from the provisions of D.C. rent control. Are you familiar with this decision?
A: On Nov. 29, the D.C. Court of Appeals -- the highest court in the District of Columbia -- issued an opinion which, if permitted to stand, will have very wide ramifications for all landlords who own residential condominium units in the District of Columbia.
In a case entitled Myer Feldman v. District of Columbia Rental Housing Commission, the high court ruled that the owner of a rental condominium unit is not exempt from rent control if the building in which the rental unit is situated contains more than four units. Indeed, the appeals court stated that, even if the landlord owns just one condominium unit anywhere in the city, that landlord would not be exempt from rent control if that condominium contained more than four units.
The court of appeals looked to the definition of the rent control exemption. According to D.C. law, the four-unit exemption applies to any rental unit in any housing accommodation of four or fewer units, including any aggregate of four units whether within the same structure or not.
A number of other requirements have to be met to gain exemption under this section of D.C. law.
The court looked to the definition of "housing accommodation" and found that the condominium itself (i.e., the entire building) was the housing accommodation -- and not the individual unit. According to the court, "An individual unit in the condominium cannot fit the statutory definition of a housing accommodation because it is not a 'structure or building,' but only part of a building."
The court concluded that "the four-unit rent control exemption . . . refers to the total number of any units in the building, not to the number of units owned by any one individual."
Ironically, the court went on to state that, even if Feldman, the petitioner in this case, owns just one unit, that unit would not be exempt from rent control.
The decision was handed down by a three-judge panel, but interested parties in the case have asked the full court for a rehearing. Unless the decision is reversed, however, or the law is changed by the D.C. City Council, the Feldman case is "the law of the land." This means that any landlord who owns a residential condominium unit in a building containing more than four other condominium units may suddenly find himself covered under rent control.
According to the lawyers for Feldman, "Under the court's interpretation, thousands of rented condominium units are subject to rent control simply because of the fortuitous circumstances that they are located in a building containing more than four rented units."
This means, as a practical matter, that those landlords are covered by the city's rent control law and should file the necessary registration forms with the city rent administrator immediately. In addition, tenants in their units are entitled to the protections of the city's rent control law.
As of this writing, it is not clear whether the rent administrator will extend the registration filing deadline, which currently is Jan. 22. Until such time, however, and to make sure that such landlords are registered adequately, filing the registration form may prevent aggravation that could result if the court's decision remains on the books.
Landlords also should alert their City Council representatives to the consequences of this legislation. A few years ago, a similar decision affected cooperative apartments, and the City Council responded quickly to correct the inequity.
In my opinion, no worthwhile purpose will be served by requiring owners of one to four condominium units to be covered under rent control, while at the same time exempting landlords who own fewer than four single-family houses.