If you are considering renting out a room, basement, or entire unit, there are several laws you need to know about to avoid fines and even jail time.
If you are considering renting out a room, basement, or entire unit for some additional income, there are several laws you must know about to avoid a sticky situation down the road, including a tenant that refuses to leave when you are trying to sell, fines, and even jail time! DC Landlord/Tenant Laws address the proper procedure regarding receipts, security deposits, inspections, evictions, the sale of rental units, etc.
Receipts
A tenant must be given a copy of everything they sign within 7 days of signing
The owner must provide the tenant with a receipt of all money received describing amounts, dates, and purpose
Security Deposits
The maximum security deposit allowed is one month’s rent
The security deposit must go into an escrow account with a DC financial institution within 30 days
If tenancy is for longer than 12 months, the landlord must pay simple interest on the deposit starting from the date the deposit was made
The security deposit and interest owed must be returned to the tenant within 45 days of the termination of tenancy or provide a notice of intent to retain part or all of deposit (with a written itemization)
The penalty for violating laws concerning security deposit can be as serious as a $300 fine and 90 days jail time.
Inspections
A landlord must notify the tenant of an inspection with a written notice 10 days prior to the inspection
Inspections must be made within 3 days of the termination of tenancy
Evictions
No notice is required to evict a tenant for non-payment of rent (no money exchanged ever.)
30-Day Eviction Notice Required for:
Violation of obligation of tenancy (tenant may cure violation)
Tenant convicted of illegal acts in the unit
Month-to-month tenant is delinquent in rent payments (another 30-day notice is required with any amount tenant pays to landlord)
90-Day Eviction Notice Required for:
Owner wants to recover use of occupancy for self (Owner may not collect rent on the property for 12 months after recovery of posession.)
Sale of property to a third party (property may not be rented out for 12 months after the sale)
120-Day Eviction Notice Required for:
Substantial renovation or rehab which cannot be completed with an occupied unit (DC Rent Administrator must approve, relocation assistance must be provided, and tenant must be allowed to re-rent after completion.)
180-Day Eviction Notice Required for:
Demolition (Permits must be obtained from the city, relocation assitance is required to be paid, no substantial rehab within 12 months after recovery of possession, and the tenant must be given the opportunity to purchase)
Discontinuance of Use (Relocation assistance is required to be paid, tenant must be given the opportunity to purchase the property, no substantial rehab within 12-months after recovery of possession, no housing or commercial use resumed with the exception of rent-increase-free rental after 12 months to be filed with the Rent Administrator.
Sale of Rental Units
Tenants must be given notice before units are sold, and they must be given first right to purchase.
Requirements for the sale of property with one rental unit (room, basement, or entire condo/coop):
Tenants must be given 30 days notice of intent to sell
If tenants express interest in purchasing, they have 60 days to be able to arrange financing and settlement
Tenants have the right to take an additional 30 days for finance extension
If the property is not sold within 180 days, it must be re-offered to the tenant for purchase.
Requirements for the sale of property with 2 to 4 units (multiple rooms, levels, or units rented on property):
Tenants must be given 15 days to determine whether or not to jointly purchase the property
If not jointly purchasing, tenants have 7 days to decide on individual purchase
If tenants decide to purchase jointly, the have 90 days for contract negotiations
If a tenant decides to purchase as an individual, they have 30 days for contract negotiations
After contract negotiation period, tenant(s) have 90 to 120 days (30 day extension) for arrangement of financing/settlement
If the property is not sold within 240 days, tenants must be given another opportunity to purchase and the process begins again.
Conclusion
Renting out a room, basement, or an entire unit (coop/condo) can be a great source of income; however, you must be in compliance with DC Landlord/Tenant Law regarding receipts, security deposits, evictions, sale of rental property, etc. Also, the process of selling property in DC with tenants in place can be a hassle, so think twice about renting out rooms, basements, or entire units if you are planning on selling within the next year. If you are currently renting and plan on selling within the next year, consult a real estate attorney to make sure you remain in compliance with DC Landlord/Tenant law every step of the way.
*This information is deemed reliable but not guranteed. Please consult a lawyer if you have any questions regarding DC Landlord/Tenant Law
