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Rental Trends: Understanding The Rent Increase Laws in Washington, D.C.

by ARLnow.com Sponsor — June 29, 2016 at 2:30 pm 0

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This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.

How much can rent increase in Washington, D.C.?

This is a common question we receive from DC landlords. It’s important to understand your rights and responsibilities and the rent increase laws in DC.

The following does not constitute legal advice, however it should provide a good overview. Please consult with your attorney or the DC Department of Consumer and Regulatory Affairs for advice on your specific situation.

Raising the Rent in DC

Rental increases in DC are typically governed by the terms of the lease and whether the unit is rent controlled. If not registered as exempt, most rentals are rent controlled. Notable exemptions include properties built after 1975 and those owned by a person with four or fewer rental properties. Landlords cannot raise the rent if there is an agreement – usually a written lease – between the landlord and tenant with a specified rental amount.

Rentals Exempt from Rent Control

As long as they follow the terms of the lease, landlords who rent units that are exempt from rent control may typically raise the rent by any reasonable amount, and at any time, as long as such rent increases are not done for any illegal purposes, like seeking vengeance on a tenant for taking lawful action against the landlord. Landlords must give 30 days written notice. While the size of the increase may not be limited by the laws, landlords should carefully consider the market. Increasing the rent too much is a sure way to lose tenants, and vacant apartments don’t earn any rental income.

Rent Controlled Units

If the unit is subject to rent control, landlords may raise the rent if the following criteria are met:

  • The previous rent increase was at least 12 months ago (unless the unit is vacant);
  • The unit has been registered with the Rental Accommodations and Conversion Division (RACD);
  • The rental unit is in compliance with housing regulations;
  • A 30-day written notice is provided stipulating any increase in rent.

Landlords may only raise the rent by the amount specified by the DCRA each year, which is based on the Consumer Price Index. Increases on rent-controlled apartments cannot exceed 10 percent. For tenants who are elderly or disabled, allowable increases are more limited and cannot exceed 5 percent.

If a unit becomes vacant, the law does allow property owners to raise the rent on rent-controlled units, even if the last increase was less than one year ago. The owner may then increase the rent by 10 percent or up to 30 percent to match the rent of a comparable unit. But then no other increases are allowed for a full year.

There are a few other circumstances, such as hardship or renovations to the unit, where owners of rent-controlled units may be allowed to raise the rent or raise it by more than the standard allowable percentage. Landlords who are not making at least a 12 percent rate of return on their rental unit can send in a request to the city’s rent administrator to increase the rent by more than the approved amount. It requires filing a “Hardship Petition,” which outlines equity in the property, expenses, rental collections, and other key information. Information on other allowable increases can be found in the district’s rent control fact sheet.

It’s always a wise idea to gather all the necessary information and do the preliminary homework before raising the rent on a unit in order to avoid penalties. For DC rental units, landlords can refer to this rent control fact sheet or contact the Department of Consumer and Regulatory Affairs at (202) 442-4610 for more information.

If you have any questions, or prefer to have a property management company handle this for you, don’t hesitate to contact us.

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