COMCOR 29.60.01 Title Substantial Renovation Exemption

A landlord seeking an exemption for a substantial renovation under Code Section 29-60(12) must file an application (“Substantial Renovation Application”) with the Director that includes the following:

Within five days of filing the application with the Director, a landlord must send by first-class mail and electronic mail, a copy of the application (excluding supporting documentation) to the tenants of all units in the rental housing for which the application has been filed with the Director.

Substantial Renovation Application Processing. Within 30 days of receipt of a Substantial Renovation Application, the Director must review the Substantial Renovation Application and notify the landlord in writing that:

Decisions on Substantial Renovation Application. The Director must review the Substantial Renovation Application within 30 days of notifying the landlord that their application is complete and notify the landlord of either a Preliminary Substantial Renovation Application Approval or disapproval with reason(s) in the case of disapproval.

The landlord must notify all affected tenants of a Preliminary Substantial Renovation Application Approval within ten business days of the receipt of the decision by first-class mail and electronic mail.

Substantial Renovation Application Supplement. If there is a material change in the scope, price, or other matter set forth in the Substantial Renovation Application, the landlord must submit the change(s) to the Director as a Substantial Renovation Application Supplement. Within 30 days after receiving a Substantial Renovation Application Supplement, the Director must issue and notify the landlord of a decision stating the approval or disapproval with reason(s) in the case of disapproval.

Final Reconciliation. Upon completion of the substantial renovations set forth in the Substantial Renovation Application and approved in a Preliminary Substantial Renovation Application Approval and Substantial Renovation Application Supplement, the landlord must submit a final Substantial Renovation Application Reconciliation Package to the Director identifying the actual costs of the completed substantial renovations with supporting documentation identifying the completion date of the substantial renovations. Within 30 days after receiving the Substantial Renovation Application Reconciliation Package, the Director must issue and notify the landlord of a decision confirming the final approval of the Substantial Renovation Application and the effective date of the exemption. Notwithstanding the foregoing, the Director’s review of the Substantial Renovation Application Reconciliation Package must not contradict any prior approval of a Preliminary Substantial Renovation Application Approval or Substantial Renovation Application Supplement provided that it is consistent with the Preliminary Substantial Renovation Application Approval and Substantial Renovation Application Supplement approval.

any costs actually incurred, to be incurred, or estimated to be incurred to make the renovation, in accordance with Section 29.60.01.04;

any interest that must accrue on a loan taken by the landlord to make the renovation, in accordance with Section 29.60.01.05; plus

any service charges incurred or to be incurred by the landlord in connection with any loan or debt taken by the landlord to make the improvement or renovation, in accordance with Section 29.60.01.06.

the interest payable by the landlord at a commercially reasonable fixed or variable rate of interest on a loan of money used to make the renovation, or on that portion of a multi-purpose loan of money used to make the renovation, as documented by the landlord by means of the relevant portion of a bona fide loan commitment or agreement with a lender, or by other evidence of interest as the Director may find probative; or

in the absence of any loan commitment, agreement, or other evidence of interest, the Director may apply the average 52-week Wall Street Journal’s U.S. Prime Rate, as reported by The Wall Street Journal’s bank survey, applied over a seven-year period. The average is calculated as the mid-point between the high and low Prime Rates reported for the 52 weeks immediately prior to application for an exemption for a substantial renovation.

the existing physical condition of the rental housing;

whether the existing physical condition impairs or tends to impair the health, safety, and security of any tenant;

whether deficiencies in the existing physical conditions could instead be corrected by improved maintenance or repair; and

whether the proposed renovations are optional or cosmetic changes.

The substantial renovation exemption must be effective on the date of the Director’s approval of the Substantial Renovation Application Reconciliation Package, unless the Department determines that the landlord seeking the exemption is in violation of Chapters 8, 26, or 29 of the Code. In such case, the exemption must be effective on the date that the Department determines that the landlord is not in violation of Chapters 8, 26, or 29.

Once a decision approving a substantial renovation exemption has been issued, the exemption must be implemented within 12 months of the approval, but no earlier than the expiration of the current lease, if any, for that rental unit.