D.C.’s rent-control loophole to go to court

A loophole that allows landlords in Washington, D.C., to get around the city’s rent-control policy is going to court.

A legal case between a local, named Matthew Pfaff, and Woodley Park’s South Cathedral Mansions apartment building will be one of the first in local civil court to directly address the issue of rent concessions, according to Washington City Paper, who further reported:

“The practice goes like this: A landlord of a rent-controlled building offers an applicant a discount on monthly rent as an incentive for that person to move in. That landlord registers a higher rent amount with the city, even though the tenant usually has no idea there’s a second value in play. (Or if they do, they don’t know what it means.) When the lease comes up for renewal, the landlord raises the rent based on that higher number ... The tenant must decide whether to move out or try and negotiate down.”

Generally, the maximum standard annual rent increase is 0.3 percent for tenants living in a rent-control unit who have registered for elderly or disability status. For all other rent-control tenants, the maximum increase is 3.1 percent. With rent concessions, the increase could be much higher, up to hundreds of dollars or more.

For Pfaff, he was originally offered a rent of $2,500 per month, but when he received the lease agreement, it showed that the rent escalated to $3,822 per month. Pfaff then rejected the proposed rent.

The reasoning behind Pfaff’s increase in rent is that the management company that originally owned the building changed hands from Oculus Realty to a joint venture between Commonwealth Residential and CAS Riegler.

Pfaff told Washington City Paper, “In a market where the terms of agreements are not being represented accurately or honestly, I don’t think anyone wins.”

The defendant companies have not released any statements on the litigation.

In September, a scheduling conference in the case has been scheduled.

• Controversial 'Rent Concessions' Go to Court in D.C. [Washington City Paper]