New COVID Legislation in the DC Metro Area Impacting Landlords, Permitted Activities, and Government Operations
The changing landscape of local COVID-19 legislation imposes additional requirements and restrictions on landlords of certain residential and commercial properties in the DC region. Business operations and government procedures are similarly impacted. Ballard attorneys can assist in navigating compliance related to these emergency actions. Some of the key changes are summarized below.
District of Columbia
On May 5, 2020, the DC Council passed the Coronavirus Omnibus Emergency Amendment Act of 2020 (the Omnibus Act), which, upon signature by Mayor Muriel Bowser, will amend and supplement the three prior emergency legislative measures enacted in DC in response to the COVID pandemic. DC’s emergency COVID legislation, including the Omnibus Act, includes a number of new provisions applicable to landlords and tenants:
- Payment Plans for Commercial Retail Tenants and Residential Tenants. During the public health emergency and for one year thereafter, landlords (and their agents) must provide rent payment plan programs for residential and commercial retail tenants if the tenant (i) notifies the landlord of an inability to pay rent due to the pandemic, (ii) is not receiving rent assistance under the District’s prior COVID-19 emergency legislation, and (iii) is not a franchise unless the franchise is owned by a District resident. Note that eligibility does not extend to all commercial tenants, but is limited to “commercial retail tenants.” Although the Omnibus Act does not define “commercial retail tenants,” it is likely that office tenants are not included.
Landlords are required to notify tenants of the availability, terms, and application process for the rent payment program—which applications must be available online and by phone. The Omnibus Act does not specify the precise terms required for the payment plan, but identifies several payment plan requirements. A payment plan shall permit prepayment and not require a lump sum payment in excess of that set forth in the written payment plan. If agreed in writing in the payment plan, any security deposit or other funds held by a landlord may be applied to satisfy tenant obligations under the payment plan. In connection with the payment plan, a landlord must waive any fee or penalty arising out of the payment plan and must not provide delinquent or derogatory reports to credit bureaus. A landlord must approve a payment plan application if the tenant agrees in writing to make payments in accordance with the payment plan and demonstrates evidence of financial hardship resulting directly or indirectly from the pandemic that is in addition to any delinquency in existence prior to the start of the public health emergency and that would now cause the tenant to be unable to qualify to rent the premises under the criteria in place when the tenant was approved for tenancy. A landlord must retain any payment plan applications it receives for at least three years. Upon request, a landlord must provide its payment plan application for residential tenants to the Rent Administrator and Office of the Tenant Advocate and its payment plan application for commercial tenants to the Department of Consumer and Regulatory Affairs (DCRA). Residential tenants may file complaints with the Rent Administrator and commercial tenants may file complaints with DCRA.
- Rent Freezes. Prior emergency legislation precluded rent increases for commercial property during the public health emergency, but the Omnibus Act amends this to limit the freeze to commercial retail properties. As noted above, the Omnibus Act does not define “commercial retail properties,” but the amendment suggests that the rent freeze may not apply to office tenants. Residential tenant rents are frozen through the public health emergency and for 30 days thereafter.
- No Eviction Filings. Although previous emergency DC legislation halted the processing of eviction matters, the Omnibus Act, when signed, will halt the filing of eviction complaints against residential and commercial tenants.
- Mortgage Relief for Landlord and Rent Relief for Tenant. Emergency legislation enacted in April has required mortgage deferrals to be made available to certain landlord borrowers and for the landlord/borrower to pass the deferral benefits to tenants demonstrating financial hardship related to the public health emergency. See Ballard Spahr Alert April 21, 2020. On May 4, 2020, Mayor Bowser signed the COVID-19 Supplemental Corrections Emergency Amendment Act of 2020, which amends the mortgage relief program so that it applies to “mortgage lenders,” rather than mortgage servicers, and includes reporting requirements and further relief program details.
- Residential Amenity Fees. If a landlord stops providing an amenity that the tenant pays for separately from rent, then the landlord must refund to the tenant pro rata any fee charged for the amenity during the public health emergency.
In Maryland, on May 6, 2020, Governor Larry Hogan renewed the state of emergency but expanded the activities allowed by residents. The Order Amending and Restating the Order of March 30, 2020 allows political subdivisions to open outdoor public spaces such as parks, sports fields and courts, beaches, dog parks, and playgrounds, subject to social distancing guidance from the U.S. Centers for Disease Control and Prevention (CDC) and the Maryland Department of Health. It also allows certain “Permitted Outdoor Activities,” including walking, biking, golfing, tennis, fishing, hunting, boating, horseback riding, and visiting cemeteries, so long as no more than 10 people are in any group together and they are related or live together (see MD Outdoor Activities Information). However, these activities and the operation of all businesses, including construction sites, remain subject to closure by local health officers if they become “unsafe,” pursuant to the Governor’s April 5 Order. In addition, the Secretary of the Maryland Department of Health issued a Directive and Order allowing non-emergency and elective health care procedures and the State Superintendent of Schools announced that all schools will remain closed for the remainder of the school year.
The Maryland Courts will remain closed until June 5, 2020, except for emergency proceedings and those which can be held remotely, and all statutes of limitation are tolled by the number of days the courts are closed to the public (the following is a link to the Administrative Order). In addition, certain eviction proceedings have been stayed (the following is a link to the Governor’s April 3 Order).
On April 22, 2020, the General Assembly's Reconvened or “Veto” Session was held. The General Assembly considered Governor Ralph Northam’s recommendations to numerous pieces of legislation, including the Governor’s amendments to Virginia’s two-year (biennial) budget. One item that the Northern Virginia Building Industry Association lobbied successfully for was a budget amendment authorizing public bodies to meet electronically to “discuss or transact the business statutorily required or necessary to continue operations” during this emergency. This will facilitate the ability of Virginia’s local governing bodies, Planning Commissions, and various other committees to hold public hearings and conduct business, even as COVID-19 limits their ability to meet in-person (the following is a link to the budget amendment that was passed).
Some local governments, such as Arlington County and Fairfax County, were already holding electronic public hearings, while other local governments had not yet adopted parameters for holding them. In response to the Budget amendment’s passage, the Loudoun County Board of Supervisors recently passed new criteria for meetings of advisory boards, commissions, and committees, many of which had not been convening since Governor Northam ordered the closure of public schools across Virginia. These new criteria allow advisory bodies to request approval from the County Administrator to enable electronic meetings. The criteria includes adhering to state or federal mandates as described by law, taking an action directed by the Board on or after the emergency declaration, or taking an action necessary and appropriate to ensure the continuity of government. More Virginia localities are expected to pass similar criteria to allow their local boards, committees, and commissions to resume their important work during this continuing emergency.
The Arlington County Permit Office is now closed for in-person customer service. Meetings and customer interactions will take place virtually to the fullest extent possible. Virtual inspections will continue. Online payment has been implemented for all permit and application types. In-person and mailed payments are suspended. For additional information, please click here.
In Fairfax County, Planning and Development is now accepting online payments for applications and permits that cannot be paid online through the County’s FIDO platform. This new payment option, available through the County’s online payment system, Velocity, provides an easy way to pay for applications and permits, without having to mail or drop off paper checks at the Herrity Building Drop Box. Applications and permits eligible for this online payment option include, but are not limited to, rezonings and related development applications, special exceptions, special permits, proffer interpretations, 2232 development applications, and telecommunication applications including Administrative Review-Eligible Projects, non-residential use permits, home occupation permits, temporary special permits, and appeals. For additional information, please click here.
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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.