District of Columbia Coronavirus Omnibus Emergency Amendment Act of 2020: Tenant-Friendly Legislation and the Introduction of Remote Notarization

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Seyfarth Synopsis: Mayor Muriel Bowser (the “Mayor”) continues to take action to address various concerns brought on by the ongoing COVID-19 pandemic. In addition to the two previous emergency acts recently enacted, DC Act 23-299, also known as the COVID-19 Supplemental Corrections Emergency Amendment Act of 2020 (the “Corrections Act”) was signed into law on May 4, 2020, and DC Act 23-317, also known as the Coronavirus Omnibus Emergency Amendment Act of 2020 (the “Omnibus Act”) was signed into law on May 13, 2020. As with the previous emergency acts enacted as a result of the COVID-19 pandemic, both of the foregoing Acts apply retroactively as of March 11, 2020, when the Public Health Emergency was declared, and will remain in effect for ninety (90) days from the date each became law. As of the date of this article, the Public Health Emergency remains in effect until May 15, 2020, however it is likely to be extended further as the Mayor recently extended the stay-at-home order until June 8, 2020.

The Corrections Act and the Omnibus Act both cover a host of topics pertinent to residential and commercial property owners and tenants alike. However, noticeably absent from the lengthy new Omnibus Act submitted to the Council of the District of Columbia is a provision requiring insurers to cover COVID-19 business interruption insurance claims, which language was pulled from the bill prior to enrollment after prolonged debate.

Tenant Rights - Rental Payment Plan Program (residential and commercial)

  • During a Public Health Emergency and for one (1) year thereafter (the “Covered Period”), certain providers (i.e. a landlord, owner or lessor) of residential or commercial retail property is required to develop a rental payment plan program (the “Program”) for “eligible” residential and commercial tenants. Of note is that this provision only applies to a residential provider if it has five (5) or more residential units currently rented or available for rent in DC.
  • An “eligible tenant” is a tenant that:
    • (a) has notified the landlord of its inability to pay some or all of the rent due as a result of the Public Health Emergency,
    • (b) is not already receiving a rent reduction due to its landlord taking advantage of the mortgage relief provided for in the COVID-19 Response Supplemental Emergency Amendment Act of 2020 (one of the requirements for a provider to take advantage of such mortgage deferment is that the rent being charged to a qualified tenant of such building must be proportionately reduced, as further discussed here, and
    • (c) is not a franchise, unless the franchise is operated in DC and owned by a DC resident.
  • The Program must (a) allow an eligible tenant to enter into a payment plan for rent that comes due during the Covered Period (prior to the cessation of the tenancy), (b) waive any penalty fees arising as a result of the tenant participating in such Program, (c) prohibit the provider from reporting any delinquency that occurs as a result of entering into a payment plan to a credit bureau or reporting the payment plan itself as derogatory information, and (d) provide for notification of “all tenants of the availability, terms and application process for the Program.” The Program must allow a tenant to pay more than the monthly amount provided for in its payment plan but cannot demand a lump sum payment in excess of the amount required under such plan. So long as the tenant agrees in writing, a landlord may utilize a security deposit, the last month’s rent or any other amount being held by the landlord to satisfy the amounts owed under the payment plan.
  • A landlord is to approve a tenant’s application for the Program if the tenant agrees in writing to make the payments under the payment plan and is able to provide evidence of a financial hardship resulting directly or indirectly from the Public Health Emergency, regardless of whether the tenant in question was already delinquent on rental payments or had already established its inability to make future rent payments prior to the commencement of the Public Health Emergency. A landlord is obligated to retain any applications received for the Program for a period of at least three (3) years, even if an application was denied, and must provide the application to the applicable governmental authority upon request (be it the Rent Administrator and Office of the Tenant Advocate for residential tenants or the Department of Consumer and Regulatory Affairs for a commercial tenant). If a tenant’s application for the Program is denied, such tenant may file a complaint with the applicable governmental authority.

Other Tenant Rights (residential and commercial)

  • No Rent Increases - A commercial retail landlord is prohibited from increasing rent during the pendency of, and for thirty (30) days after the end of, a Public Health Emergency.
  • Evictions - During a Public Health Emergency, and for sixty (60) days thereafter, a landlord may not file a complaint seeking to evict a tenant. Evictions had already been suspended as of March 11, 2020 pursuant to an earlier emergency act.
  • Amenity Fees - If a residential tenant is charged for an amenity, in addition to the rent it is paying, and that amenity is not available to the tenant during a Public Health Emergency, then the landlord must refund the tenant a pro rata portion of such fee for any period of time that the amenity is not available. If the fee to utilize such amenity is built into the rent being charged to a tenant, the landlord does not have to decrease the rent even if the amenity is not available for use.
  • Residential Housing Cleaning Requirements - During a Public Health Emergency, the owner of a housing facility must clean the common areas on a regular basis, “including surfaces that are regularly touched, such as doors, railings, seating and the exterior of mailboxes.” This requirement applies to any building that has at least one residential unit that is not occupied by the owner of the building, including apartments, rooms, cooperatives, group homes, nursing homes and assisted living facilities.

Restaurant Delivery

  • An update was made to the types of on-premises retailer’s licenses that qualify for registration to offer for beer, wine and spirits for carry-out or delivery. The Omnibus Act further expanded the rights of such registered retailers to allow them to sell alcohol in closed containers (along with the requisite food item) at one location in addition to the licensed premises. Approval from the Alcoholic Beverage Control Board (the “Board”) is not required for the additional registration so long as the retailer follows a number of guidelines, including separately registering and receiving written authorization from the Alcoholic Beverage Regulation Administration (“ABRA”) for such additional location, confirming the additional location has a valid certificate of occupancy (unless the location is outdoors) and insuring the additional location is in a commercial or mixed-use zone within DC. The additional licensed premises cannot be located on public space unless such space has been issued a public space permit by the District Department of Transportation.
  • Any registered retailer may only offer alcohol for carry-out or delivery at such additional location between the hours of 7:00 a.m. and midnight for up to thirty (30) days unless the Board approves a request to extend such right, which it may do for up to one (1) additional 30-day period. Any further extensions will require a completed application be filed with the Board and public notice posted. Violators of this provision risk the Board fining and suspension, cancellation or revocation of such retailer’s license, and such registration to offer alcoholic beverages for carry-out or delivery at the additional location will be revoked.
  • Various changes were made to the logistical requirements for filing applications for licenses issued by ABRA, including deleting the requirement for a notarized statement and allowing electronic signatures, allowing for electronic mail rather than requiring first-class mail, and extending the public comment and protest period from 45 days to 66 days.
  • The Omnibus Act clarified that if a licensed establishment is closed during the period in which a Public Health Emergency is in effect, such closure does not trigger the 21-day clock in terms of the licensee being required to notify the Board of its closure and to surrender the license issued by ABRA.

Third-Party Food Delivery Commissions

  • In a highly anticipated move, the Omnibus Act added a prohibition on third-party delivery platforms charging restaurants a commission fee in excess of 15% of the purchase price per order during the period in which a Public Health Emergency is ongoing. It is also unlawful for a third-party delivery service to “reduce the compensation rate paid to a delivery service driver or garnish gratuities” in order to comply with the foregoing sentence.
  • The Omnibus Act also added a requirement that during the pendency of a Public Health Emergency, a third-party delivery platform must conspicuously disclose to a customer ordering food from its service any commissions, fees or other monetary payments imposed on the restaurant by such third-party delivery service prior to the customer completing its transaction.
  • Any party providing a third-party food delivery service must register with the Department of Consumer and Regulatory Affairs.
  • Fines for violating the provisions of this section of the Omnibus Act range from $250 to $1,000 per violation and any such violation will also be a civil infraction for purposes of the Department of Consumer and Regulatory Affairs Civil Infractions Act of 1985.
  • The requirements of this section only apply to third-party delivery services that arrange for the sale of food and beverages for same-day delivery or pick-up from restaurants, as opposed to other delivery services that, for example, arrange for the delivery of solely alcoholic beverages from non-restaurants.
  • Further rules may be issued in order to implement the provisions of this section of the Omnibus Act.

Remote Notarizations

  • During a Public Health Emergency, the Mayor may permit notarial acts even without the physical appearance of the person making the statement or executing the signature if both the notary public and the individual communicate with each other via an audio and video communication program. The notary must be able to view the person in real time and compare for verification such person’s information and photo on that party’s government issued identification.
  • There are number of requirements of the notary public for such “virtual” notarization to be valid, including that the notary public has notified the Mayor of the intention to perform such notarial acts using this virtual process and the identity of the audio-video communication the notary plans to use, that the notarization occurs immediately upon electronic receipt of the signed document by the notary public with such document then being immediately turned back to the individual and the notary public maintaining an audio-visual recording of the notarial act for three (3) years. Any notarial act will be deemed to have occurred in DC regardless of the notary public’s physical location as long as the requirements are met.
  • The provision of the Omnibus Act relating to electronic witnessing is limited to certain guardianship matters.

Miscellaneous Provisions

  • Mortgages - The Corrections Act updated the language relating to mortgages that was first covered in the COVID-19 Response Supplemental Emergency Amendment Act of 2020 discussed in Seyfarth’s previous article. A summary of such updates can be found here.
  • Trade Name Renewals - There will be no late fees for trade name renewal applications so long as the same are filed by June 1, 2020.

As we receive any updates or clarifications on any real estate related provision of the Corrections Act or Omnibus Act, this memorandum will be updated. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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