Category: Real Estate

Washington DC is the jurisdiction at the center of the National Capital Region. If you're considering purchasing rental property the area, there is a hidden premium to purchasing a property in DC that many landlords don't know about until it's too late. According to the  Washington City Paper a potential DC landlord needs to be aware that: "D.C.’s housing code is designed to protect residents. It takes up about 70 pages and covers everything from heating and lighting requirements to weatherproofing to repair and maintenance protocol. Of course, city employees aren’t the only ones in town who know the code in and out. Certain tenants have become experts as well. " Take it from a DC Landlord who said, "Trust me, if you don't have to rent your house/apt out... don't! The rules do little to protect the landlord. I had 'squatters'/house-sitters who decided to cook drugs in my apt. The only reason they probably left was because the DEA was hot on their ass. In the meantime, I had to go to lots of expense to go thru the court system and when I got my house back - it was torn up. I try to screen but the article and previous posters are right. There are career renters who know the rules and will do anything to screw you. Good luck!" Another DC Landlord says, "The tenant laws in DC are absolutely ridiculous. They MUST be changed. I live in a condo building and a few people have purchased units with the sole intention of renting them out. While we have had a few really good, respectable tenants, we have had one tenant who is just the pits. She deals drugs from her unit, works as a prostitute (using her unit as her 'office'), has been in trouble with the law, and is really bothering the people who live in this building. When the unit owner tried to evict her, he discovered that the process could take more than a year, despite the police reports and other evidence against this low life. He has spent thousands of dollars in legal bills and has admitted that he has now lost more money than he has made off the unit. If you own a property in DC, DON'T rent it out. It's just not worth it in the long-run." The Lease Never Ends Tenants in DC cannot be evicted because the lease ends. They just can't. Tenants can only be evicted if the landlord occupies the property themselves or sells to someone who intends to occupy the property themselves. Only investors buy occupied units and investors don't buy in DC because of the difficulties of tenant management.  If you are going to claim to occupy your DC rental, you'd better not own a larger and better home elsewhere because you might have difficulty establishing that you actually intend to occupy the property. The City's Office of Tenant Advocacy is there to advise tenants of their "rights".

In DC tenants have significant "rights" that that they don't have in most jurisdictions in the US. For example, tenants may only be evicted for 1 of 10 specific reasons, one of these reasons is NOT because the lease has ended. In DC tenants have a right to "perpetual tenancy" which means that if you rent someone an apartment in DC and they comply with the lease, and pay the rent, that lease is good until they move or die, no matter what it says about the end date. To raise the rent you must adhere to specific guidelines and directives required by the city.

Emilie Fairbanks, an attorney practicing landlord tenant law, writes, "Tenants can demand a jury trial no matter how little they owe or what the lease violation is. Your case will be certified to the Civil Division, a process I will explain fully later, but for now you just need to know it is often very long. Perhaps up to a year. During this time, the lease violation may very well continue and in nonpayment of rent cases you won't be getting any rent, some, hopefully all of the monthly rent going forward from the first court date, will be paid into the court escrow. " If you decide to sue your tenant for non-payment of rent, be advised that tenants have the right to a jury trial for even the smallest amounts of rent. It will take 6 months to a year to get your day in court and during that time, the landlord will likely not be receiving any income. At best the tenants will be paying into a court escrow account. At worst they will be paying nothing. The motto of the Office of Tenant Advocacy is "Putting People First".  In case you didn't know, tenants are people, but landlords are not. The Legal Division provides the following services:

• Legal Rights - Advises tenants of the powers they possess over the landlord and how to manage the landlord
• Representation - The tenant can qualify for a free lawyer . . . the landlord does not.
• Tenant Petition Filing - Petitions are useful roadblocks to eviction/resolution. Petitions are also a great way to harass a landlord into surrendering. The city will help tenants complete and file tenant petitions. The city will help tenants draft other court documents. The landlord must hire an attorney to navigate the system.
• Resolution - This means that the city will help explain to the landlord the facts of life and why surrender is the landlord's best possible option.
• Tenant Hotline - There is no landlord hotline to provide an “Ask the Director” forum or to respond to inquiries about rental housing law.

Maintenance

At some point every rental unit anywhere will require maintenance. When that happens you'll likely find that maintenance services in Washington DC generally cost 20% to 100% more than neighboring jurisdictions. Excessive licensing requirements and burdensome regulation discourage small businesses from working in Washington. In addition, many tradesmen based in Virginia and Maryland won't travel into the city to work. Many handymen have told me that they won't work in DC because they can't leave tools unattended for even a moment without risking theft of those tools. Locking down tools and trucks each time you turn your back makes a job take longer and makes the price go up.  DC has fewer tradesmen who have higher overhead.  Naturally the prices are higher.

Virginia and Maryland are very different.

Nesbitt Realty manages properties in Virginia and we have managed property in Maryland. We do not manage property in DC specifically because of the strong "tenants rights" laws in DC.  Those laws make managing property burdensome to the point that it makes no sense for our business. In Virginia, we operate largely in Arlington County, the City of Alexandria and Fairfax County. We find that the laws in Arlington and Alexandria are tenant-friendly but manageable. The laws of Fairfax County are probably closer to what is found in most jurisdictions in the US. If you're thinking of buying an investment property / rental property in the National Capital Region, you'll find a micro-economy that is recession-proof with a steady supply of renters. So owning a rental in this area can be a smart move.  If you've settled on buying in this area, Virginia is probably your best choice, followed by Maryland.  If you are a landlord, the District of Columbia is a risky financial endeavor filled with pitfalls awaiting the unwary. For more information or to set up an appointment call Nesbitt Realty at (703)765-0300.