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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