Rent Board Amends the Rules and Regulations re O&M Petitions

After a public hearing on December 10, 2019, the Rent Board Commissioners approved a proposed amendment to Rules and Regulations Section 6.10 regarding Operating and Maintenance Expense petitions (an “O&M" petition).

The amendment to Rules and Regulations Section 6.10 was in response to the recent Board of Supervisors’ amendment to Rent Ordinance Section 37.8(e)(4), which prohibits landlords from imposing O&M rent increases on tenants due to increases in debt service and/or property tax that resulted from a change in ownership. However, for O&M petitions filed on or after December 11, 2017, where the landlord purchased the property on or before April 3, 2018, increased debt service and/or property taxes must still be considered if the landlord can demonstrate that it had “reasonably relied” on its ability to pass through those costs to the tenants at the time of the purchase. The Rent Board Commissioners’ amendment to Rules and Regulations Section 6.10 is intended to clarify the standard for determining whether the landlord met its burden of proving it had “reasonably relied” on the ability to pass through increased debt service and/or property tax costs to the tenants at the time of the purchase.

The full text of amended Rules and Regulations Section 6.10 is available here.