If you've been to DC landlord and tenant court lately you may have noticed some changes. I talked about the changes a year ago in some detail in Changes Coming in 2016 but here I will focus on one big change and how is is working. The biggest change is the new fully functioning "upstairs" courtroom. This courtroom is now reserved for motions, status hearings, and a few other types of hearings. Trials and initial returns are still held downstairs in the courtroom across from the clerk's office. The idea is to make things run more smoothly and get people out of landlord tenant court faster. Does it work? Sometimes. If you have an initial hearing you could still be there several hours. Your tenant could go to the Resource Center or to talk to a law student. If you have a trial you should still expect to spend ALL DAY there. If you have a motion in the upstairs courtroom you may or may not do better. Motions still take time. Often the hearings drag on. Sometimes you will be out more quickly, sometimes not. If you and the opposing party are both there and both sign in on the sheet in the upstairs courtroom you stand a better chance of getting out quickly. But there are no guarantees. The less pressure you put on yourself to be done, the better your negotiating position. If you really have to leave the other side may use that to pressure you. So be ready for the long haul.
DC landlords often contact me when they have a tenant who isn't paying rent. Sometimes the tenant hasn't paid rent in months or even years. Sometimes the tenant is making occasional partial payments. Often a landlord has heard rumors or read news stories about how hard it is to evict someone in DC. They don't want to spend more money and time on a process they could lose. Let's clear up some misconceptions by addressing some of my most frequently asked questions.
1) Will a nonpayment case take forever? Is it even worth it?
Nonpayment cases in DC take time. There is no getting around that. Some of them take a long time. DC Courts are sometimes inefficient and aren't running on the kind of budgets they need to serve our city. BUT let's look at the alternatives. If you don't sue for nonpayment the tenant continues not to pay you. It's just human nature. If you went to work and weren't paid and didn't bring it up week after week, year after year your employer might not notice or it might just fall to the bottom of the list. After all, if your money doesn't matter to you who else will care? There are steps you can take to minimize your risk in a nonpayment case, such as inspecting the property before you file and making sure everything is in working order, having a proper rental licence for the property, and maintaining or cleaning up your records of what is due.
2) But I don't have a rental licence. Should I avoid filing?
If you don't have a licence you still have the right to sue for nonpayment of rent. Talk to a lawyer who can help you decide the best course of action to get the licence or just file the suit.
3) I don't have a lease with the tenant.
That's ok. If you have established the amount of rent through emails or texts or the tenant paid the rent for a period of time and then stopped you will have the ability to prove the rent amount due. You don't have a basis for late fees. The important issue here is did this person EVER pay you? If not they might not be a tenant and you may have easier ways to evict them. Talk to an attorney about your options.
4) I don't have the time to go to court/I live far away from DC.
An attorney can go to landlord & tenant court for you on nine out of ten hearings. A property manager can handle rent collection for you going forward if that isn't what you want to do. Don't let a bad tenant take advantage of you because you are living far away.
One of the hardest things to deal with as a DC landlord trying to navigate the court system is the lingo. A judge or an attorney for the tenant might suggest a hearing that you aren't familiar with and it seems daunting. One of those is an accounting hearing. Here is the short and sweet on accounting hearings. Sometimes the landlord and the tenant don't disagree about things like if the house is in good condition or what the monthly rent should be, just if the rent was paid. In those cases a trial isn't always required. In an accounting the landlord brings the ledger and any other payment records showing what the tenant paid or didn't pay and the tenant brings receipts, cancelled checks, money order stubs, anything that can show what was paid. The landlord and the tenant sit down and compare their records and try to come up with an amount they agree is due. This process can be helpful but you have to bring all your records to court.
If you go to court for non-payment of rent in the District of Columbia, you are entitled to request a protective order. That means, you can tell the judge you want your tenant to pay the rent into the court registry until the case is resolved. Protective orders don't deal with back rent, only the rent from the day of the first court date forward, so if you sue a tenant for five months of back rent and come to court on March 1st, the protective order can start March 1st. The back rent is resolved at trial. The tenant can also request they pay the rent into the registry. The tenant can also request the amount of rent be reduced because of housing code violations, so be prepared to show the property is in good shape. A protective order allows you to come back to court if the tenant doesn't pay and ask for sanctions, such as striking the tenant's jury demand or answer, or in some cases entering judgment in your favor. That's the law.
Now let's look at the reality. If you have a protective order and your tenant is paying into the registry you can't access that money. You are still required to pay expenses for the property and do repairs although you won't be getting any rent. You may get that money when the case is over, but if you need that money to pay your mortgage and utilities it might not help you at that point. While there are ways to try to get money out of the registry before a case ends, they aren't easy. If the tenant is willing you could agree the rent will be paid to you directly until the case is resolved. Many tenants won't agree to that, but sometimes creative solutions can be found. Landlord and Tenant cases in DC can drag on for months or even a year, so having the protective order put in place correctly and enforced is extremely important for your financial health and future.
If you are starting a nonpayment case or in the middle of a case that you can't resolve, contact me.
Mayor Bowser is moving from her NE DC duplex to a house in NW but says she doesn't plan to sell her duplex. Many of my clients face similar situations when they need to leave DC for work or get married and buy a larger home and have to decide what to do with a DC property. What are her options?
1) Sell: Mayor Bowser has apparently decided not to sell her property at this time but selling is often a good option if you don't intend the return to the property. It can also be a way to make money for your new property without becoming a landlord. So why not just sell? There are tax consequences of selling that might be problematic, always check with an accountant. Perhaps the value isn't enough for you to sell right now and you want to bet on the property gaining value. Talk to to a real estate agent to evaluate if that's a realistic hope. If you might want to return to DC you might also decide to keep the property.
2) Rent: Do you want to be a landlord? DC is tough. Be prepared. I know what you're thinking. But you're a landlord-tenant attorney! Shouldn't you be recommending this option? Sorry, being a DC landlord is not for the faint of heart. You must get a rental license, rent control registration or exemption, pass an inspection, have a DC specific lease, have a plan for getting repairs done, screen applicants carefully, and know the risks. A DC tenant can hold you up in court for months without paying rent. Being a DC landlord is not passive income. It's risky. You can loose money. It can also be a great way to make a profit from your property while you are away, if you're willing to do it right.
3) Family: Sometimes a property can be occupied by other family while you are away. But be careful. Determining if a family member is a tenant or just a guest can be very complex and if there is damage to the property figuring out who pay is difficult. If the expenses become too high and you want to sell or you want to move back in and your family member doesn't want to move or you aren't sure if they are a tenant, consult an attorney before taking any action. Hint: did they pay you any rent, ever? They are a tenant.
4) Register the Property as Vacant and Pay the Tax: DC does not want vacant properties. If you plan to leave your property unoccupied you must register it and pay a vacancy property tax rate. If you think you can keep your homestead deduction instead, consider that your neighbors can call DC to turn you in, most people hate vacant properties on their block. If, like Mayor Bowser, you are moving elsewhere in DC you will also need that homestead deduction for your new place.
5) Renovate: One exception to that pesky vacancy tax is if your property is undergoing permitted renovation. If you only plan to be gone for a short period, like year, perhaps now is the time to do that HGTV style makeover you've always wanted to do. But managing a renovation from out of town can be complex so be certain you hire someone who will act as your project manager and oversee your interests while you are away.
It can be a hard to decide what to do with your old property when you are also trying to move. Contact me if you need help with crafting a lease, registering your property, or just considering the risks and rewards of renting.