June 29

Eviction Reform Act of 2018

For the first time in a long time Washington, DC will soon have new eviction procedures. The Eviction Reform Emergency Amendment Act of 2018 passed DC Council on June 26, 2018 and will become effective after it is signed by the mayor. The text of the current version of the law can be read here: Eviction Reform Emergency Amendment Act of 2018. For better or for worse, all Washington, DC landlords will need to become familiar with this new law to ensure compliance. This version of the law is not final and the final version may be different. However, it seems likely some version of this will soon become law. We wanted you to be aware of these changes as soon as possible.

This new legislation coincides with the US Marshals changing their policies on evictions. Pursuant to their new policy, landlords and tenants will receive a specific eviction date at the time of filing their Writ of Restitution, or soon thereafter, as opposed to the current policy of being notified of the eviction date on the day prior. When the Marshals arrive at the property, the landlord will change the locks and the eviction will be over. Legal possession will be returned to the landlord right there and then. The tenant’s right of redemption will be terminated. No eviction crew will be needed. However, the obvious elephant in the room is: what happens to the tenant’s stuff? As explained below, if the tenant elects, in writing, the landlord will have the obligation and cost to pack, move, and store all items for one month. Left unresolved by the current draft is the huge question: what are the landlord’s obligations if the tenant does not so elect? Perhaps the final version will say that the items may be deemed abandoned in that instance, but only time will tell.

The goal of the new policy and this new law is to have more tenants voluntarily vacating and fewer actual evictions with belongings placed on the street.

The current time-frame seems to be that the US Marshals are aiming to change their policies on July 9, 2018. The new law will seemingly be finalized, signed, and effective by that time, too. One major short-term question is whether these new laws and policies will apply to Writs that have already been filed. That has yet to be determined.

The biggest changes to the DC L&T eviction process stemming from the current version of the Emergency Legislation are as follows:

Landlords have a new burden to provide electronic and mailed notice to the tenant of the pending eviction, not less than 14 days prior to the date of eviction.
In the Landlord’s notice to tenant, the tenant must be notified of three important new legal rights and the tenant must be given the opportunity to respond in writing to “opt-in” and receive such rights. Currently left unanswered by the legislation is the tenant’s deadline for opting in.
The tenant’s new rights, which they must affirmatively elect to receive are:
1. On the day of the eviction, the Landlord must photograph all of the tenant’s belongings.
2. Within 1 week of the eviction, the Landlord must pack all breakable items in sealed boxes and all non-breakable items in sealed bags or boxes, deliver the items to a storage licensed facility within 10 miles of the rental unit, and notify the tenant of the location of the facility.
3. The Landlord must pay for 30-days of storage.

Obviously, this proposed law raises tons of new issues. Landlords will need to create a new form letter to comply with the notice requirements. Landlords will need to create policies to ensure they are able to prove valid service of the notice. Perhaps landlords should start taking pictures of the notices posted to the door, even though service is only required electronically and by mail. Certainly, landlords will want to become more vigilant about collecting and maintaining email addresses for all tenants. Landlords may want to try to negotiate a bulk rate with storage facilities, and find one with a keyless entry system for ease of providing the tenant with access. Landlords will also need to decide whether they should have their own staff do the packing and moving or whether it is better to hire licensed and bonded movers in order to limit liability. Regarding the photography of the tenant’s items, it is up to the landlord as to how much inventorying it decides is beneficial.

It should be noted that these new rules do not apply to commercial evictions, which may become easier and faster than they are now. No eviction crew will be needed and any items that remain in the property at the time of the eviction are all deemed abandoned. Seemingly a survey won’t be needed. The landlord may want to notify any UCC lien-holders of possession of those items at that time.

Along with the new policy and new law, DC Superior Court will also have new Writ form. Landlords will also have to provide two contact phone numbers.

Again, the current version is not yet final law. The final law may differ from this. However, the sooner landlords consider these issues and plan for the inevitable change the better. We urge you to read the text of the current version, and the final version, to ensure compliance with all terms. This is merely a summary of the law. Do not hesitate to contact us to discuss in further detail.

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October 21

DC Landlord Partnership Fund

The District of Columbia has established a new DC Landlord Partnership Fund that is intended to cover costs, such as property damage or unpaid rent, owed to landlords of tenants whose rent is subsidized by certain programs. The program is intended to get landlords to relax screening criteria if they knew they can recover losses through the city. It will be interesting to hear from landlords who make claims against the fund. The press release can be read here.

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January 13

New DC Landlord Late Fee Law

There is a new law in Washington, DC that affects how much residential landlords can charge their tenants in late fees. The Rental Housing Late Fee Fairness Amendment Act of 2016 is now in effect. The text of the law can be read here: Rental Housing Late Fee Fairness Amendment Act of 2016.

Some highlights of the law include:

• Late fees are limited to 5% of the full amount of rent due “by a tenant.” The phrase “by a tenant” seems to preclude a landlord from charging 5% of the total rent when a portion of the rent is paid by a subsidy. It is unclear what amount a landlord can charge as a late fee in the event of a partial payment.
• The written lease agreement must inform the tenant of the maximum amount of the late fee that may be charged pursuant to the agreement. This could be a very important issue, because no existing leases could possibly contain this language. Landlords should provide each tenant an addendum to satisfy this provision.
• There must be a 5-day grace period before the late fee is applied.
• A landlord cannot charge interest on a late fee.
• A landlord cannot apply future rent payments to late fees. This is a large departure from the accounting that most landlords use, whereby a new payment is applied to the prior balance, including previously-incurred late fees. This could become an accounting burden and accounting software should be updated to comply with this provision.
• A landlord cannot impose more than one late fee for one late payment. This is also a large departure from the accounting that most landlords currently employ, whereby a late fee is charged each month until the tenant reaches a zero balance.
• A landlord cannot evict a tenant on the basis of nonpayment of late fees. This, too, is a big change. Although judges routinely limit late fees for eviction purposes, late fees have always been included in the Trans Lux, or redemption, amount. As of January 8, 2017, the Superior Court of DC, Landlord and Tenant Branch, is rejecting any and all late fees. This is very important, as landlords need to ensure they are not evicting tenants based upon nonpayment of late fees.
• A landlord cannot collect late fees based upon a subsidy’s late payment.

One important aspect of the law is that a landlord’s failure to comply can come with severe penalties. Any housing provider who knowingly or willfully violates this law is liable for the amount the late fees charged exceed the permissible late fees, or treble that amount in the event of bad faith. Landlords can also be fined between $100 and $5,000 for each violation.

The law does allow landlords to issue invoices for unpaid late fees. If the tenant does not pay the late fees, the landlord may deduct from the tenant’s security deposit at the conclusion of the tenancy.

Landlords should certainly reconsider accounting principles in light of these changes, as ledgers that combine all charges may lead to problems down the road. Please contact us if there are any questions about this new law, or to discuss DC Landlord and Tenant and eviction law in general.

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December 7

Residential Lease Clarification Amendment Act of 2016

DC has enacted a new residential Landlord and Tenant Law. The Residential Lease Clarification Amendment Act of 2016 provides helpful insight on a number of relevant topics. Specifically, the law: (1) limits mandatory fees a landlord can charge; (2) defines “ordinary wear and tear” for security deposit purposes; (3) defines what constitutes reasonable notice and purpose for a landlord to access a tenant’s unit; (4) provides a duty for a landlord to mitigate damages after a tenant breaches the lease; (5) specifies timeframes for a tenant to provide notice to vacate and for a landlord to provide notice of a rent increase; (6) explains what consent is needed from a landlord in order for a tenant to sublease; and (7) provides penalties for noncompliance. You can read the new law here. Please contact Battino & Sokolow to discuss these matters in detail to ensure proper compliance.

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