If the COVID-19 pandemic was not already difficult enough on the D.C. real estate development community, recent proposed legislation by the D.C. Council might make developing condominiums in the city more challenging.
On September 17, 2020, the D.C. Council’s Committee on Housing and Neighborhood Revitalization held a public hearing on two bills that will impact the processing and adjudication of structural warranty claims for the District’s condominium buildings: The Condominium Warranty Claims Clarification Amendment Act of 2020 (Bill 23-0623) (Claims Clarification Act) and the Condominium Warranty Amendment Act of 2020 (Bill 23-0601) (Warranty Amendment Act).
The Claims Clarification Act, which was generally supported by members of the development community, proposes a formal process to resolve condominium warranty claims. Specifically, when a homeowner and declarant are unable to negotiate a resolution to a structural warranty claim, such claim may be submitted to and adjudicated by the D.C. Department of Housing and Community Development (DHCD). Once DHCD issues an order on the merits of the claim, the homeowner or the declarant may appeal DHCD’s decision to the Office of Administrative Hearings within 30 days. While most public testimony was in support of the proposed legislation, some individuals noted it may inadvertently encourage premature submission of warranty claims to DHCD that could be resolved by the parties. Additionally, the legislation does not establish a timeframe by which DHCD must make a decision on the claim, which allows the process to drag on and places a cloud over the declarant’s project.
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