I'm calling to order this hearing.

This is a public hearing of the committee of the whole of the Council of the District of Columbia.

I'm Phil Mendelssohn, Chair of the Council and Chair of the Committee of the Whole.

Today is Tuesday, July 7, 2026.

The time is 3.13 in the afternoon.

We are in room 412 of the Johnny Wilson Building.

The subject of this hearing is Bill 26-493 entitled Strengthening Tenant Receivership and Oversight for Neighborhood Growth.

This legislation was introduced by Councilmember Robert White, co-interduced with Councilmembers Propinto, Matt Freuman, Brianna Doe, and Janice Lewis George.

Introduced on November 19th last fall.

The looking at the long title of the bill, the bill would amend the tenant receivership act to clarify grounds, notice, and procedures for receivership, expand tools available to the court and receiver, establish cost recovery and lien mechanisms, and authorize tenant protections.

The bill also would amend the construction codes to strengthen injunctive relief and amend the business organizations code to permit disillusion and related remedies in case of fraud or abuse.

The looking at the hearing notice to restate this a little differently, the stated purpose of Bill 26-493 is to amend the Tenant Receivership Act to include violations of the Air Quality Amendment Act of 2013 as grounds for the appointment of a receiver, and to clarify what constitutes a serious threat to the health, safety, and or security of the tenants to allow for the electronic mailing of violations and to require more frequent reporting of progress made by the receiver in abating conditions giving rise to the appointment.

Bill 24-493 also amends the construction code approval and amendments to act 1986 to clarify provisions related to injunctive relief for illegal construction activity and amends Title 29 of the code to authorize the Superior Court to dissolve a limited liability company in a proceeding by the Attorney General if certain conditions are met.

So today we are focused on building code and um uh decent tenant uh housing conditions.

The record in this matter will be open for two weeks.

That is, it will close at 5 p.m.

on Tuesday, July 21st.

What does that mean?

As a political body, we will consider comments whenever they come in right up to the final vote.

But we have to follow record on legislation, and for those purposes, anything that is given to us by 5 p.m.

on Tuesday, July 21st will be included in the record.

Before I call witnesses, I'm going to recognize uh colleague, Councilmember Robert White, who's the author of the legislation.

In case you have an opening statement.

Thank you, Chairman.

Um, and uh thank you for scheduling this hearing at such a busy time.

Last fall I introduced the strong homes amendment act, uh, with Attorney General Brian Schwab because of what I hear from tenants uh way too often, families heating their homes with the stove in January, parents putting buckets under a leaking roof, and children sleeping in rooms with mold on the walls.

These are not rare stories in DC these days, and in nearly every one of them, landlords knew these issues existed, had been cited for violations, had been fined, and simply decided that waiting out the government was cheaper than doing repairs.

Now I want to be clear.

Uh this bill is not about every landlord.

This bill is about the small number of landlords that are neglecting properties and mistreating residents.

Um, this bill is about properties like Marbury Plaza, 2M, Benning Park, where residents look at me to say, why council member White, after years of telling you these issues exist, is the building not fixed?

This is unacceptable.

And I tell them I agree it is not acceptable.

This the district already has a tool to hold the worst slum lords accountable.

It's called receivership.

A judge puts a neutral professional in charge of the building.

The rent goes to repairs instead of in the owner's pocket, and the property gets brought back up to code.

The tool works.

Since we've had an independently elected attorney general, the district has won the appointment of a receiver in nine cases.

And in every one, tenants recovered restitution.

The district won penalties to deter the next bad actors, and repairs finally got made after years.

In eight of those buildings, the property has already passed out of the hands of the neglectful owners and into new ownership.

And the ninth looks headed the same way.

The problem is how long the worst actors can stall before a building is brought under receivership.

Owners propose repair plans that never that they never intend to follow.

They miss deadline after deadline and dare the district to hold them in contempt.

They try claiming they never got the notice, and when the court finally runs out of patience, they file for bankruptcy or say that they'll sell the building to start the clock over.

At Marbury Plaza, tenants waited years between the first court order and a receiver taking charge.

No one should have to litigate for years to have heat and hot water.

This bill closes that loophole, those loopholes.

It lets the court move fast when tenant safety is on the line.

It lets the district uh lets the district front the money for emergency repairs and then makes the owner rather than the taxpayer or tenant pay it back.

It guarantees no tenant is pushed out because of a receivership.

It forbids rent increases to fix landlord neglect.

And when an owner hides behind a web of LLCs, it gives the attorney general the ability to go after the entity and person themselves rather than a shell company.

This is aimed uh at, as I said earlier, a small number of housing providers, and those are the housing providers that are the reason that the council has to introduce bills that a lot of organizations don't like.

Uh without those housing providers, the council is less active.

So I look forward uh to getting feedback from residents and housing providers about how we uh sharpen this legislation, and I look forward to hearing today's testimony and working with Chairman Mendelson and my colleagues and the attorney general to move this bill forward.

Thank you, Chairman.

Uh thank you, Councilmember.

Uh so I'm going to call witnesses, not knowing whether they're here or virtual.

When I fill up the table, I'll stop.

Or maybe sooner.

Uh Farrah Fossey, who's community development director of Empower DC.

Andrea Chapman, I believe, is not here.

Sonny Desai, managing attorney, legal counsel for the elderly.

Is virtual, I believe, Eric Jones, Vice President of Commercial Affairs for DC at AOBA.

Virtual, I believe, Denise Hunter L.

Nathan Hunter L.

Bill Slover.

I believe Mr.

Slover is virtual.

Jeffrey Levin.

Here, Mr.

Levin.

Yes.

Um, so is she Shafiq Shafiq Pasha?

Is she here?

Beverly Smith.

Is virtual.

Alaner Hart.

I'm going to stop right there.

Ms.

Foster, you're first.

Hey, good afternoon, Chairperson Mendelssohn, Councilmember White.

My name is Farrah Fosse.

I'm the community development director at Empower DC and award for a resident.

Empowered DC uses community organizing to advance racial, economic, and environmental justice, including housing justice.

We work with renters from across the city, but primarily wards five, seven, and eight.

In our tenant power campaign, tenant leaders came together, come together to share information, strategies, and resources to prevent displacement.

These residents identified unsafe and unhealthy housing conditions as a major cause of displacement and affordable housing loss.

Unscrupulous landlords regularly neglect affordable housing properties, violating DC's laws, particularly the housing code, and creating unsafe and unhealthy housing conditions that push tenants to move.

This causes the loss of affordable housing and subsidies, housing subsidies and rent control, and allows property owners to take actions like demolition, sale, or conversion that they would not be able to take if the residents were still in place.

They know that while DC has strong tenant rights laws, that the housing code enforcement continues to be a weak link in protecting DC renters and affordable housing.

I'm here today to urge you to support the Strong Act to fix the tenant receivership process and to commit to fully funding the tenant receivership abatement fund.

The current tenant receivership process does not work.

While receivers have a mandate to bring dangerous properties up to code, it's an unfunded mandate that is not directly linked to preventing displacement and preserving affordable housing.

Because receivers don't have funds to fix failing properties.

The result is often bankruptcy, which erases tenant rights, and resident displacement.

This risk of displacement means that organizations supporting renters, including Empower DC, are reluctant to refer cases to OAG for receivership.

It means that in turn, once cases are in receivership, it's often too late to protect renters and affordable housing.

The strong act makes important fixes to the receivership process.

And in particular, we support that it requires that a proposed purchaser must show that they can maintain and rehab the property, has a detailed abatement plan and financing plan to fix housing code violations.

We also support that they can use the nuisance abatement fund without guaranteeing that it would be repaid, and can take on loans.

We recommend adding tenant voice to this process.

Though the law is called the Tenant Receivership Act, tenants don't have any formal way to engage in the process.

Our recommendations are to name preventing tenant displacement and preserving affordable housing as specific goals of the act and any decisions and processes through the act.

Exploring TOFA so that a sale would go through the TOPA process.

Explore adding TOPA post bankruptcy, which has been proposed previously, and ask the court to give weight to tenant association goals, recommendations, and objections.

This act can't stand alone though.

It has to be coupled with additional reforms to housing code inspections and enforcement and must include dedicated funding.

The tenant receivership abatement fund, which is controlled by Office of the Attorney General, receives funds only from the attorney general restitution fund and funds recovered from owners under receivership.

The fund is limited to two million dollars.

When there's excess money put into it, that money goes into OAG's litigation support fund.

This is the primary issue with receivership.

It's often too late and the funding is too little.

Once properties go into receivership, they're often mostly vacant, and residents and HUD or DCHA may not be paying rent due to the poor housing conditions.

By definition, the properties are in extreme disrepair.

The tenant receivership abatement fund should be seated and maintained with at least 10 million dollars a year from the general fund.

Given that these properties will go through a sale or a recapitalization, this money will be recouped with interest.

Receivers should be provided with this funding day one when they take over the property.

This would allow OAG to take on more cases as it would allow us to feel more confident in referring cases.

Thank you.

I'll stop there.

Also, in my written legis um written testimony is support for the other legislation that's being introduced by the housing committee, which we really support as a holistic package to address these issues.

Thank you.

Thank you, Ms.

Fossey.

Sunny Desai Desai, who is uh virtual.

Good afternoon, Chairman Mendelssohn and members of the committee.

My name is Sunny Desai.

I am the managing attorney of the Tenant Advocacy and Support Practice at Legal Counsel for the Elderly.

Thank you for the opportunity to testify in support of the Strongholds Amendment Act.

LTE defense Protects and empowers District Residents aged 60 and over.

Through our housing work, we represent older tenants who are trying to remain safely housed while facing eviction threats, unsafe conditions, and barriers to repairs.

We support this bill as it strengthens an important tool for addressing dangerous housing conditions, but more should be done to give the power directly to the tenants.

Take the example of Miss T, a seventy-two-year-old pastor from Ward 7.

She lived in the same apartment for decades and paid her rent faithfully for years.

She lived with housing conditions and including an uneven floor that was increasingly difficult to navigate because of her mobility limitations.

She repeatedly reported the problems, but the landlord relied on temporary fixes and never solved the underlying issue.

It was not the landlord's failure to maintain the property that brought the matter to court, but rather one late payment by Ms.

T.

Only after she was sued for eviction that she gained access to a meaningful process to raise her housing conditions.

With LCE's assistance, she eventually obtained approximately $7,000 in rent abatement, but only after two years of litigation.

Ms.

T ultimately achieved justice, but her case highlights a fundamental problem.

Tenants should not have to wait for an eviction case before they have meaningful tools to hold landlords accountable for unsafe housing conditions.

This is why this bill is an important step forward.

It recognizes chronic neglect before a building reaches crisis conditions, helps ensure property owners, not the tenants or taxpayers bear the cost of disrepair, and protects tenants from displacement and unfair rent increases during receivership.

But more can be can and should be done.

We also encourage the council to continue examining additional tools that place power that place greater power directly in the hands of tenants.

Receivership is an important remedy, but it is ultimately reactive.

By the time a receiver is appointed, tenants have often endured dangerous conditions for months or years.

The district should also pursue policies that allow tenants to secure relief earlier before conditions deteriorate to the point where court intervention becomes necessary.

One reform worthy of consideration is the creation of an affirmative right to rent escrow.

Ms.

T's experience illustrates a gap in district's housing laws.

Tenants often cannot access meaningful rent escrow remedies unless they are already in litigation, typically as defendants in an eviction case.

Tenants should not have to wait until they are threatened with eviction to obtain necessary repairs or enforce their right to habitable housing.

An affirmative rent escrow process would give tenants proactive mechanisms to seek repairs, compel compliance with housing laws, and create a direct financial incentive for housing providers to address dangerous conditions promptly.

In many cases, it could prevent small problems from escalating into a crisis and reduce the need for more significant interventions, including receivership itself.

This bill is an important step to ensure severely neglected housing is repaired and stabilized before more residents suffer harm.

LCE supports the legislation and urges the council to adopt it.

We also urge the council to continue pursuing reforms, including an affirmative right to an escrow, which gives tenants meaningful uh protections that they can take on directly when landlords fail to meet their responsibilities.

Thank you, and I am happy to answer any questions.

Thank you, Mr.

Desai.

I don't have a copy of your statement if you could provide that.

We'll do.

Thank you.

Eric Sowens, who's virtual.

Good afternoon, Mr.

Chairman.

Can you all hear me?

Yes.

Before I get started, I will say my testimony was submitted this morning during the budget hearing, so you may not have it, but it has been submitted.

I have sorry, thank you.

With that, good morning good afternoon, Mr.

Chairman Mendelssohn and members of the committee of the whole.

I'm Eric Drummond, the fourth generation Washington, Karen Warfare resident, who serves as the Vice President of Government Affairs, DC Commercial for the Apartment Alter Building Association, and Metro and Washington Oreo.

For 50 years of the OBS represented commercial office and multifamily residential real estate in the DC area, with members portfolio holding over 156 million square feet of commercial space and more than 480,000 rental units in DC, Maryland, and Resilience.

In DC proper, our members manage more than 25 million square feet of commercial space and nearly 120,000 units.

I'm here today to highlight specified concerns with B 260493, the Strong Homes Amendment Act of 2025.

While we as an organization understand the importance of ensuring safety and reliability in our local housing supply, our members have several concerns that I will quickly highlight for your consideration.

First, the legislative proposals have rebuttal presumption for appointing a receiver, meaning instead of the usual court process where evidence is presented and the government must provide their case by a procurement of 51%.

There is a default presumption that a receiver should be appointed if certain conditions are met.

These conditions include housing issues or inability to meet obligations like utilities or mortgage.

The burden then shift to the opposing side to refute this presumption.

Essentially, the party opposing the appointment must argue why receiver shouldn't be appointed contrary to the initial presumption.

So that can do the lien superiority, which is a bit confused.

In talking to our members, including multiple legal representatives, no one knows exactly how the lien superiority works.

Under the proposed legislation, we interpret costs imposed by the receiver, such as man in the feed or basic calls to be given priority.

Lastly, the law allows the receiver to fill the property at fair market value to a capable owner with the court's approval.

The receiver can also declare bankruptcy for the owner, the defendant, and the receivership.

Now, while we agree that this rarely happens in the district, the reason we're bringing this up is because we don't want there to be loopholes in which we could have a building that's not the described type of problem put in this situation.

One of the examples that Councilmember White just highlighted is a building that was a building that was open in the spring of 2014.

I will repeat, it was open in the spring of 2014 and was one of what was considered a trophy apartment in Washington DC.

I had the honor of being there for the grand opening and acting co-host to be birth to been at the building.

It was subsequently sold in the spring of 2021.

And since then, the building has continued to be a problem.

Very few properties in DC fall that far down within 12 years.

But there's something else there outside of simply a troublesome management company.

These are the type of things that give the good landlords concerns because we don't want to have a situation where ambiguous legislation could allow property owners and managers who are working within the law and working with the government to fall into these categories.

With that, General Mendelson, while we're unsure of the timetable for the legislation, we are willing to work with DOB, your staff, the committee on housing, and others, to flesh out our concerns and recommendations moving forward in hopes of solving these problems.

In closing, I thank you for the opportunity to provide this relevant feedback, and I'm willing to answer any questions you may have.

Thank you, Mr.

Jones.

Uh Denise Hunter L.

Um, good afternoon, Chairman Menace and I gotta excuse me.

I'm a little nervous today, having been going through so much.

My name is Denise Hunter Ill.

Like my husband, Nathan, and I am a World 8 member, resident organizer.

And resident leader of Empowered DC.

I urge the committee to pass the strong act bill.

We are going through so much out here.

And I can't even take it anymore.

It is just too much.

I'm sorry.

Sure.

I urge the council to pass and fully fund the strong act along with other important bills that would help DC better hold Sumlords accountable.

Um we have been, says my husband and I have been directly impacted by the city's ineffective tools to intervene in unsafe housing conditions.

For three years now, we've been living through a cycle of displacement, leaving one home in search of safer housing conditions, only to be confronted with similar or worse conditions in a new place.

We most recently had to leave our home at Capitol Vista, where we dealt with mold, pests, and other housing code violations while being repeatedly ignored by Feria, the management company.

Once again, we were forced to leave our community, including our son and close friends who still live on the property and face these conditions.

The strong homes act would help the city more easily use the receivership process to fix properties in severe disrepair, like the ones my husband and I have lived in and bring much needed relief to tenants.

But we need to make sure any changes to the receivership process protect tenants' rights, expand our ability to participate in the process, and preserve affordable housing.

As residents of these properties, we are closest to the issues and deserve to have a seat at the table, including being able to give recommendations around who properties are sold to.

I support provisions in the Strong Act that require that the proposed purchasers show they can maintain and rehab the property and provide a detailed plan to fix all housing code violations to both residents and government agencies.

Along with the strong act, I stand with Empower DC and ask the council to pass and fully fund the Lean Mean and Clean Acts that better hold landlords accountable before conditions balloon to the emergency level seen at Capitol Vista and other ferria properties around the city.

We also need an improved strategic enforcement plan from the Department of Buildings.

We cannot wait any longer.

In conclusion, DC needs to send a clear message that slumlords cannot keep violating the law.

I ask the council to pass the strong act and other legislation that better protects tenants from bad housing conditions.

I also urge the council to dedicate ten million dollars per year to the tenant receivership fund and provide accessible loans so emergency conditions can be fixed quickly.

Thank you.

Thank you.

Uh Nathan Hondreau.

Good afternoon.

Chairman Mendelssohn and Council members, Mr.

White.

My name is Nathan Honey, and I'm a Ward 8 resident organizer and resident leader of Empowered DC's tenant power campaign.

I'm here today to urge the council to pass and fully fund the Strong Act and other important legislation that would improve the city's ability to target slum lords.

My wife and I have testified before the council year after year about the unsafe housing conditions we've experienced and how the city must improve the two it has to intervene and provide relief for residents.

Our family has been forced to move three times between wards six, seven, and eight in the past three years due to unhabitable living conditions and management companies that continue to violate DC's housing code.

We recently left our home at Capitol Vista Apartments in War 6 due to mold pests, irregular trash pickups, threats of water shutoffs because of because the owner refused to pay the water bill on time.

Our former neighbors report the elevators have now been out for days in excellence.

They've been out for two weeks.

They fixed the elevator and then the elevator turnaround went out again.

And in this property, they have elderly with walkers and canes and wheelchairs that cannot use the stairs.

So they've been forced to have to call for somebody even get out the building to make an appointment.

They've been forced to call the fire department and had the fire department come help a resident out of the building off their floor out of the building so they can get to the appointments.

Now I had myself for days.

Not to mention the management company fire, so repeated violations of our right to organize by interrupting tenant meetings, barring organizers from the building, including my wife and I, and threatening tenants with illegal evictions without just calls.

Though organized and participation in tenant power meetings, I've learned the tenant receivership process can allow someone else to step in and run a property when there are serious conditions.

But I am concerned that this process that the process comes too late.

By the time a receiver comes in, most tenants have already moved like we did, or withheld rent, or conditions are so bad the property is condemned condemned or sold through bankruptcy.

Either way, this means a loss of affordable housing and tenants' rights.

The strong homes act is a step in the right direction to make the receivership process more effective, a more effective way to bring relief to the problems with dangerous conditions like the ones we've lived in and protect tenants.

But before we get to that point of receivership, we need quicker, more targeted action by the Department of Buildings.

If we had early intervention to fix the conditions in our previous homes, we wouldn't have had to keep picking up and moving all over the city in such a safer conditions.

I echo Empower DC and ask that the council pass and fully fund in addition to the Strong Homes Act.

Other bills, the housing committee is introducing around housing because this is like the clean mean and lean acts.

We also need a finalized strategic enforcement plan from the Department of Buildings.

In sum, I asked the council to pass the Strong Home Act and other important bills that would target slum lowers.

I also asked that with this bill 10 million per year be dedicated to the tenant receivership fund and accessible loans so tenants can get relief from severe conditions as soon as possible.

Thank you.

And I am available for questions.

Thank you, Mr.

Hydrael.

Bill Silver, who's online.

Uh, can you hear me?

Yes.

Good morning, Chairman, members of the committee.

My name is Bill Slover, and I have served as a court appointed receiver under the tenant receivership act in multiple cases involving approximately a thousand units in 11 buildings throughout the city.

I appreciate the opportunity to testify today.

I want to begin by saying that I support many of the proposed amendments.

Many address practical issues that the receiver, receivers have encountered over the past several years, and they represent meaningful improvements to the act.

My concern is not with what the bill adds, it is with what it leaves unresolved.

In my experience, the greatest obstacle to success to successful receivership has never been the receiver's authority.

The courts already provide broad authority.

The greatest obstacle has been funding.

This legislation creates stronger remedies, clearer procedures, lien rights, repayment obligations, and expanded authority to use a tenant receivership abatement fund.

Those are all positive changes.

However, none of those improvements matter if the fund itself contains little or no money.

Today there is no mechanism that I'm aware of requiring that the fund be adequately capitalized to support all ongoing receiverships.

Without dedicated funding, the legislation improves the rules governing a system that still lacks the resources necessary to operate effectively.

There's also another practical issue that I've experienced in every receivership I've worked on.

The moment a receiver is appointed, the receiver oftentimes immediately assumes significant legal and operational responsibilities.

Utilities must remain on emergency repairs must begin.

Contractors must be hired, employees and vendors must be paid, and insurance must remain in force.

In practice, they do not.

The orders requiring defendants to provide funding often come weeks or months later, and often those funds never come.

During that period, the receiver is legally responsible for protecting the property and its tenants while having no reliable source of funding.

A receiver operating without capital is left choosing between advancing personal funds to meet the legal obligations or falling behind on the very duties the court has ordered.

This creates an unnecessary period of financial exposure for the receiver and/or delays the work that should begin immediately.

Provide an immediate source of bridge funding that becomes available upon appointment of a receiver, subject to later reimbursement by the owner where appropriate.

Those two changes would address the largest operational weaknesses that remain in the act.

The tenant receivership act is an important law.

My experience has shown me that it can protect tenants, preserve housing, and stabilize distressed properties.

This legislation makes that law stronger.

Without reliable and timely funding, receivers will continue to face the same challenges.

They have been limited the act effectiveness for years.

No receivership should fail due to a lack of funding.

Thank you for your time.

Happy to answer any questions you might have.

Thank you, Mr.

Silver.

Jeffrey Levine.

My name is My name is Jeffrey Levine, and I'm a small landlord in Washington, D.C.

Chairman Mendelson and members of the committee.

Thank you for uh the opportunity to testify.

I support safe housing.

I support the goals of the strong homes amendment act.

But before we give government greater power, we should require greater accountability.

I believe in good government, and good government demands more than good intentions, it demands clear rules, accountability, transparency, transparency, and fairness.

Consider this policy scenario.

A fourth generation Washington family inherits a modest row house with a legal basement apartment.

For years it is rented without issue.

The modest rental income helps the family remain in their home and supports and helps support a disabled brother.

Then a new occupant moves in.

Housing complaints are filed.

The Department of Buildings responds exactly exactly as it should.

Violations are issued.

Licensed contractors complete the repairs.

But when the department returns to verify the work, denied entry.

Denied again.

Again, and denied again.

Eventually, there are more than 60 documented access denial or inspection failure events.

The repairs remain unverified.

The violations remain open.

Not because the work was never completed, but because the Department of Buildings was repeatedly unable to verify that it had been completed.

Eventually, under this scenario, the Department of Buildings recommends receivership, and the Office of the Attorney General asks the court to place the property into receivership.

This is not about landlords versus tenants.

It is about whether government should receive greater authority before it has a clear it has clear procedures for exercising that authority.

First, does the department of buildings have a written policy governing repeated inspections, denied inspections?

If so, will the department please enter that policy into the public record today?

Second, after repeated denied inspections, what is the department of buildings required to do before recommending receivership?

Does that process include seeking lawful access through an administrative search warrant or another established legal procedure?

Third, how does the department distinguish between an owner who refuses to comply and an owner whose completed repairs cannot be verified because inspectors repeatedly cannot gain lawful access?

If those distinctions are not made, should this council expand receivership authority before requiring them?

I also respect and I also respectfully ask the committee to strengthen the bill's notice provisions.

When the consequent consequence may include receivership, email alone may not be enough.

Notice should be reasonably calculated to provide actual notice.

Mr.

Chairman, thank you.

I appreciate your time today.

Thank you, Mr.

Levine.

I don't have a copy of your statement.

If you could provide it, I will.

Uh Shafiq Pasha, I believe, is not here.

Is virtual.

Beverly Smith.

Yes, I'm here.

Please proceed.

All right, thank you.

My name is uh good afternoon, everyone.

My name is Barley F.

Smith, and um happy to be here, unfortunately, for these matters as it relates to uh tenants.

I am a Bennett Park resident.

I've been here for six years.

I'm a native Washingtonian, and I'm sorry.

I could just bear with me, please.

I would like to speak on behalf of the strong act home, the strong home act.

I support the goals and general ideas of the legislation.

DC needs a receivership process that works to protect tenants and affordable housing.

Support that this legislation requires that a proposed purchaser must show that they can maintain and where necessary rehab the property, including a detailed abatement plan for DLB co-violations.

Suggestions are though the law is called the tenant receivership act.

Tenants do not have a voice in the process.

We would like to see tenants' voice added to the process.

For example, could sales be subject to TOPAY, could weight be given in any court processes to the tenant association goals or recommendations, including who the property is sold to?

Could any new owner through bankruptcy be required to give tenants a TOPA offer?

This bill needs to be coupled with funding, including dedicated funding for the tenant receivership fund and accessible loans for repairs.

Recommendations that this fund has 10 million a year.

This legislation must be coupled with earlier focused intervention for the Department of Buildings.

We are supporting other pieces of legislation that the housing committee is introducing, claiming and lean act, as well as improved processes at the Department of Buildings target slum properties.

And evade DC's laws.

Receivership and related processes need to happen with the rep with presentation focused early.

We uh experienced so much.

Um, I went through mold.

I actually had to, I was displaced at the leave out of my apartment um due to headaches, um, rodents.

Um when I come out of my apartment, the trash can, the dumpster is right by my unit, so just overpowers the trash.

I have pictures.

Um, it's just ridiculous that we are living in uh we're living in unhuman uh you know situations and it's not okay.

Um, thank you all for this opportunity.

I appreciate you, council members and everyone's testimony as it relates to support of this act and supporting of empowered DC and the hard work that everyone is putting in.

Thank you for your time and I'm available for questions.

And I'll also submit my written testimony.

Uh thank you, Ms.

Smith.

I don't have a copy of your statement.

You said you've already submitted it.

No, I will.

Okay, great.

You shouldn't get a copy of it.

Thank you for that.

Thank you.

Elner Hart, who's virtual.

Good afternoon, Chairman Mendelson.

And Councilmember White.

My name is Eleanor Hart, and I advocate for affordable housing on behalf of DC for Democracy, a grassroots organization with over 200 members.

We are very enthusiastic about the intent of the Strong Harms Amendment Act.

Stronger protection from Sumlords for tenants and preventing DC's housing stock from being demolished by neglect.

We thank Attorney General Schwab and the council sponsors for creating this legislation.

And we urge this committee and the council to make sure it fulfills its intent by making it stronger and passing related complementary legislation.

The Strong Homes Amendment Act requires effective communication with tenants.

The more tenants know about receiverships, and the sooner they know it, the stronger their protection will be.

Another potential source of funding for repairs is the proposed lien act, which authorizes the Department of Buildings to put liens on properties owned by landlords who refuse to make repairs.

We also urge this council to pass the lien act soon.

In addition to the strong homes amendment act, the home strong amendment and lien acts, we urge you to pass the clean and mean acts that will make it possible to revoke the business licenses of landlords who are guilty of serious continued housing code violations.

We appreciate the promise of better housing conditions in the strong homes amendment and lean acts and the related complementary legislation.

And we are counting on this committee and the council to continue with the considerable effort that will make it possible for the promise to become a reality.

Thank you for the opportunity to testify.

Thank you, Ms.

Hart.

And you'll be submitting your statement.

I could not use the link that uh was provided to upload it, so I emailed it to the mini.

Okay.

That completes all the witnesses for this group.

I had a couple of questions.

What's that?

Maybe I'll ask this question of Miss Fosse because you're active with Empower DC.

A couple of witnesses referred to Feria properties.

Who is that?

Say more about them.

Yeah, essentially, well, it's been a shorthand for companies that are owned or controlled by Bua Benetier, who owns Dante's partners, the Dumas Collective.

We actually identified over 116 different property, different company names that he operates under, which I think speaks to some other legislation that is coming around being able to more easily identify the beneficial owner.

But he was um Feria Management was the management company at Benning Park, which was the subject of, you know, came up in a lot of earlier hearings because of just very, very serious housing code violations.

Um I've been doing tenant organizing in DC for 20 years, and this was some of the worst housing code violations I ever saw.

Um, and I will say at Benning Park, we were nervous about getting a potential receiver because we were afraid that actually everybody would be displaced instead of reaching the stated goal of actually getting the property fixed up.

Um HUD put pressure on Feria, and they um actually left Benning Park, and since then conditions have improved greatly.

Um a huge issue though at Benning Park is that they the um property owes almost three million dollars in water and gas bills because Feria, while they were receiving a huge amount of funds from HUD, didn't pay the water and gas bills.

Um so Ferry um owns and manages a number of other properties.

Some they most of them they also own, including Capital Vista that um we're spoken about today.

So I think there's about 12 properties that are owned or managed by one of US companies.

Uh, thank you for that.

I had a question for Mr.

Slover.

Um you said you wanted two changes, but it sounded to me like they were sort of the same, and it was money.

It's a horrible way to put it, but yeah, I think I I it's it's it's two distinct things.

One is um yes, there needs to be dedicated funding, but a mechanical issue exists where uh when I say as an example when my company takes over as receiver on day one, there's a responsibility to um take over management of the property is an example, but the funding does not come.

So I, as my company does not have the resources to take to fulfill that obligation, and so I understand that.

Um, but isn't you referred to bridge funding and tenant receivership abatement fund?

Wouldn't the tenant receivership abatement fund be the logical source for the bridge funding?

Well, there's no there at the moment, Chairman Mendelssohn, there's there's typically no money in the fund.

And so what I'm saying is it needs to be a package deal.

In other words, currently the law, the way the way it works is the defendant is supposed to pay for the receivership.

However, practically that does not happen often, if ever, and so should that funding come even, there is a gap in time.

So there needs to be one when a receiver is named and appointed, it needs to come with funding.

What is the tenant receivership abatement fund?

That's a that is a fund that exists if the defendant doesn't not do not perform their obligation.

So they have a certain amount of time.

So when you take over the the court orders the receiver, names the receiver, the receiver is put into place.

That day they have the obligation, but the defendant doesn't give money that day, isn't even required to give money that day.

And so they have, you know, 30 days to come up with the money, and then another 30 days if they don't have the money, and there's a lot of discussion about whether they do or don't have the money, all that time the receiver has his obligation with no money.

Yeah, no, I understand.

Um, but uh, but I don't think people do fully understand, no offense to anybody, but well, I'm running out of time, but I do understand.

You're saying that when you take over as a receiver, there's no money to pay the expenses that you have to pay right away.

I just didn't understand the tenant receivership abatement fund, which I would assume would be if there was money in that fund, would pay the bridge funding, but for some reason apparently it doesn't.

No, so it's not structured that way, it's not allowed to do that until until there's a failure on the defendant's part to pay.

So the structural gap.

So let me ask you this.

Uh, when you take over a property, how much how much um how much immediate expense do you have?

And I realize it's gonna change from building to building, but are we talking about a million dollars or a hundred thousand dollars or ten thousand dollars?

It's typically more in the million range because of the deferred the deferred maintenance.

I mean a million is probably so typically between 500,000 and a million is probably owed an outstanding invoices.

Those can be you know delayed, not paid, but that's sort of the outstanding obligation.

From a day-to-day perspective, you're gonna need significant revenues just to keep the building open and operational while you're trying to figure out actually how much debt there is.

And so I think a safe number to put on it would be um, you know, what I would suggest is is prior to taking on the receivership, there's a basic due diligence that's done as sort of an underwriting process that said this is how much money I would need for the first 90 days to run this property on a case-by-case basis.

All right, I'm gonna leave it there.

Council Member White, do you have any questions?

Uh yes, thank you, Chairman.

Um, so let me start with you, uh uh Bill Slover.

Um, how does this work in other jurisdictions?

Uh the issue that you described with the receiver taking over the property, bills still being due and uh improvements, uh at least basic improvements needed to be made and the money needs to come from somewhere.

How does this work in other places?

Well, I'm not familiar with what other places do or whether other places even have such an apparatus is maybe unique to the district, may not be.

Um typically a receivers, this is this is a unique receivership in that it's it is ordered by the it's a it's a conditions receivership, it's not a financial receivership.

So typically a financial receivership, a bank would pay the bills.

In other words, if a bank named a receiver, they'd give them money to run the building.

It'd be like taking over a bankrupt entity with no money.

So if we use Marlbury Plaza as an example, uh you took uh took charge as a receiver of Marbury Plaza in uh beginning of 2024, which is uh so we're clear with respect to this bill.

Two and a half years after the district sued, um conditions over there uh when I saw them before 2024 were deplorable.

Um how do you manage a property that large that's been in neglect for so long without a nuisance of abatement fund?

So Marbury Plaza was a different, a different animal count, Councilmember White.

Uh that was in bankruptcy already.

So when I took over as the receiver, it was sort of what I would call a modified receivership.

Um and so my my main responsibility was working with the bankruptcy attorneys and working with the management in place to try to make sure that they were doing what they were supposed to do.

Um I think um the question that you're asking is more relevant to all the other receiverships I did.

Um, which uh as an example when I took over Foster House, there was a requirement for uh uh a fire alarm system, they hadn't had one in 10 years.

It was a $200,000 item, but there was no money to pay for it.

Now, thankfully the attorney general at that time had money and we were able to pay for it.

Okay, um, but those those types of that that that was just a rare circumstance where the money had where there was funding there.

Okay, so there's no no clear answer to it.

You're just kind of trying to stitch funding together where you can where you can get it now.

Correct.

And what in the OAG has been great, and they they do the best they can, but they don't they have limited resources, and so they they deploy all the money that they have, um, but since there's no dedicated resource and it doesn't replenish, once it's out, it's out, and when the money does let me keep moving because I have limited time.

So one of the recommendations from Fairface in Bill Slover, I'll ask you to weigh in first, was to allow a receiver to take out loans.

Do you have thoughts on whether that could work or how that that might work?

It's a possibility, it's again it's on a case-by-case basis, depending on how much debt there is on the building.

But I think a cleaner way to do it once again, given the timing and the and the circumstances and the emergency aspect, you it's better to come from an existing fund that then can be repaid through something through a mechanism like that.

Okay.

Um the Fair Foss A, um, do you have a sense of whether there are jurisdictions who manage bankruptcy um better than than we do, or that we could model after the receivership process?

Yes, I'm sorry yeah um i don't.

Uh yeah, maybe OEG does.

And then if if you are, you mentioned in your testimony that you know, because of the limited funding available to help, and usually by time uh property ends up here, it's massively backlog in uh repairs uh if you're hesitant to refer cases to OAG what what what do you recommend to tenants I think it's really case by case but but I think that's part of why we're here today is just that we haven't had had a great system or processes yeah okay um on those systems and processes uh uh Eric Jones you know with the things like um the lien superiority and rebuttable presumptions uh you know and federally backed loans um uh I want to express my my my willingness to to work with you all on on things like this that I see is more technical you know I think we generally agree you know it's we're talking about buildings where is not a close call you know these aren't things this should not affect any landlord who has an issue that's getting fixed or you know a tenant who won't let the uh department of buildings in where we're talking about uh issues where it's it's it's not even a question so uh just want to be clear that we're we're open to working with you on on those aspects excellent all right i'm over time uh thank you chairman thank you council member council member bonds thank you very much um chairman and to my colleague Robert happy to be here with you on this important um matter I was very curious um and I wanted to talk to Mr.

Jones and Mr Shover in particular um Mr.

Jones AOBA does AOBA have cases of how receivership is handled in the local metropolitan area outside of DC I don't off the top of my head because I mainly folks in the district but I'm sure if I reach out to my colleagues who handle Maryland and Virginia I probably can get some more information for you all I just have to talk to my colleagues in house which I can do over the next few days and follow up with you all.

I think that would be very helpful for us to have a clear understanding we tend to be more of a regional community now and it seems to me there must be some best practices the situation with receivership has been ongoing well for at least 15 years I've been here not quite 15 years but um it continues to be continues to be an issue I've heard from some who have some landlords who say well what they did they gave me a receiver and the receiver spent all the money so I had and then it the repairs were still not made so I'm very curious as to whether or not there are some protocols that we can take a look at so that the people who live in these units um in this housing really get relief um so Mr.

Stober what what do you know about this as it relates to what we do in the region or are you just um practicing and interested in the District of Columbia Well uh I think I said earlier I'm not I'm not sure what what other jurisdictions do um and even if they have a law that is as specific as this one in terms of the way that this act is is is used so um I don't really have a best practices um I just know that from my experience um there's an inability for the receiver to um to really do what's necessary because of the lack of funding.

Okay, well, when a receiver is appointed um is there an agreement with the courts that stipulates that certain types of repairs will be made?

Well, there's a there's a um a court order that we're that that says that the receiver is responsible for life safety issues uh and has to address all life safety issues, mold, air quality, etc.

Um, and that the defendant is supposed to pay for those for those uh repairs, however, the defendant um there's no real mechanism to force the defendant to pay.

And even if they did pay, there's a timing gap between uh when the work should be done and when it may be paid for, and so you're asking the receiver to take on uh uh financial obligation um on behalf of the building that they don't even own.

So then I have to ask, does this uh piece of legislation uh address the core of the issue?

Well, for me, I as I said in my testimony.

Uh I'm not sure if you were here or not, but uh I was not.

Yeah.

What I said was that this bill addresses a lot of issues.

It's very, very uh shores up the act a lot, but without that dedicated funding, it's it would be difficult uh for it to be successful uh uh on uh all receiverships because of the lack of funding.

Okay.

Um maybe Mr.

Jones can speak to that as well.

Again, again, uh, I think we'll be looking at some of the best practices.

If you aren't so much around the funding aspect of it, uh I literally just sent the email to my colleagues asking them if we can uh put our heads together and get you all some best practices because our concern to your point is how we can make this thing this in a way that makes sense.

And while we understand the importance of receivership, we don't want to have a situation where we have mistakes, so we're definitely gonna pour together some of that information and provide that for you in the coming days.

All right, well, thank you.

Ms.

Fawcett, may I ask you very quickly, because I only have three seconds.

Um what what is your thought about how whether or not this bill addresses the issue, and that is getting people who live in terrible conditions out of those conditions, cleaning up whatever may be going on in the property so that people can have a quality of life.

For me, that's the most important thing.

So how do we do that?

Yeah, I mean, I really I agree with what Mr.

Slover said that the the bill does, I think clean up a lot of the process points, a lot of you know the the specifics of the legislation.

What it needs to be coupled with is that funding.

You know, we really want to see the tenants to be able to stay in their homes with those improved conditions, but there has to be, you know, there's just often so many deferred bills, deferred maintenance, serious housing conditions, that there does need to be that funding on day one, but definitely this bill sets the groundwork for it.

It's it's good legislation for improving that process.

Okay, so it it can improve it, but it it can only improve it if you have the financial resources.

I see Mr.

Hunter saying yes, you've got to have those resources.

Um, okay, my time is up.

Thank you, Chairman.

Sorry.

Thank you, Councilmember Bonds.

Uh I have no further questions.

Thank you, each of you for your testimony.

Several of you did not provide copies if you would.

Appreciate it.

Um continuing with the witness list, we have Wayne Jones, Jen Baker, who's president of two M tenant Association.

Gabe Murnoff.

Cameron Kang.

You are part of and you are everywhere.

And Wayne Jones is not here.

All right, Miss Baker, you're up.

Good afternoon, um, counsel.

I am it's a pleasure to be here.

Unfortunately, we have to keep meeting on these terms, um, but thank you for allowing us to us to us, and when I say us, I mean I'm representing 2M Tenants Association to testify on behalf of the Strong Homes Act.

I am also a member of myself and the 2M Tenants Association is also a member of the Empower DC platform.

So I want to say thank you for to them for preparing us today.

The Strong Homes Act strengthens the tenants' receivership act by making it easier and faster for the district to intervene when landlords allow serious housing code violations to persist.

It would improve the receivership process, give the attorney general stronger tools to protect tenants and expand related enforcement authority under the construction codes and corporation codes, including injunctive relief and potential judicial dissolutions for LLCs that show a pattern of abuse.

Earlier in the testimony from a gentleman earlier, he talked about the jewel of uh apartment building that was built in 2014.

Well, that building is my building, and it is no longer a jewel.

It's actually a really nice-looking apple with a bunch of worms inside of it, and those worms are not the tenants.

Um the Strong Acts talked about the pattern of abuse.

Our tenants have been accused of relying on the department of buildings too much.

There we call them way too much, and it has been reflected in the customer service that they um allow us that they give us.

We have no choice but to call the department of buildings because we have been you guys have both been Councilman Wright and Councilman Mendelssohn have both been to 2M apartments in the past year, and you have seen the dilapidated conditions that we are dealing with.

Earlier intervention would allow and would allow more accountability.

We have called the DOB so many times.

We had a proactive inspection earlier this year.

There were over 200 violations were found, and many of those are repeat.

Right now at 2M, the garage door is broken.

It was broken this time last year, and it was broken this time the year before.

Chairman Mendelson, I don't want to have to call you again this winter to tell you that we don't have heat.

How many times do we have to keep calling you to say we don't have heat, we don't have heat, or AC in the summertime?

I am I don't want to be a nuisance to you guys.

If the Strong's Home Act was uh able to be enforced, we would not, we would have potential to have a receivership and have somebody come in and solve some of these problems, but we cannot do that when there is no money.

Uh the the bill needs to be coupled with funding, including dedicated funding for the tenant receivership fund and accessible loans for repairs.

Our recommendation is that the fund is funded by 10 million dollars a year.

Though the law is called the Tenant Receivership Act, tenants do not have a voice in the process.

We would like to see tenant voices added to this process.

Um, as somebody who's been running the tenants association for five years, and I've lived at tenant at 2M apartments for over 11 years.

I will tell you firsthand DC has the highest unemployment rate in the country.

People do not have time to be running down their landlord to fix problems.

They are worrying about getting jobs, they are worrying about staying in their apartment.

If this is truly affordable housing, you want to keep people in place, and we want to make sure that we have the the receivership act, the strong homes act to get a receivership in so that we can make sure that the landlords are being held accountable.

It's early intervention and making sure that we are not bogging down the DOB.

We don't have time for this.

So early intervention accountability, um, it will allow us to have more stabilized housing, timely funding, and we just want you to fund it so that make to make sure that repairs that need to be made.

Like I said, we know that the boiler is broken.

I don't want to have to keep calling and emailing you guys this winter.

It was 17 degrees in the past January, and we did not have um heat.

We haven't had heat, we've had heat problems since the building was taken over 2022, 2023, 2024, 2025, and 2026.

I don't want to have to call you in 2027 to tell you that we don't have heat.

Please fund this act.

Thank you.

And I'm trying to remember when I toured the building, weren't the elevators out?

The elevators are out right now.

We have two out of we have uh four elevators and two are work, two out of the four are working and they lock off one elevator at night.

The garage door is broken.

We have people, we have homeless people coming into our building, doing drugs, all the time.

Because there's an entrance to the building off of the garage.

Uh-huh.

And the garage is supposed to be secure and it's supposed to be secure, and at this moment right now, there's a security guard standing outside because the garage door is broken and the garage door is broken every single year.

If you cannot afford to maintain a building, why are you even in this business?

Has the garage door ever been fixed?

The garage door will get fixed.

It's always a part that's coming on a slow boat from China.

It gets fixed within a couple of weeks, and then it might happen again.

And then we have to keep calling and calling and calling.

And the problem is that the tenants are being looked at as the nuisance.

I am being I don't have I everybody here is probably getting a check today.

Tenants' associations need strong, and that might be another legislation for you to uh enforce.

But we are doing the work.

We live in these buildings.

The property management goes home at probably 445 and they clack out and we don't hear from them.

When there are problems, the tenants association are the ones who are dealing with the issues.

I am constantly submitting um reports to DOB on behalf of tenants who have low literacy rates, who are elderly, who don't know how to use computers.

We are doing this work, and we need this act to be funded to make sure that the receivership can happen, to make sure that the right people are taking over, but it must be funded.

Alright, let me call Mr.

Murnoff.

Thank you.

Alright, um, hello, good afternoon, uh, Chairperson Mendelssohn and members of the committee of the whole.

Uh, my name is Gabe Murnoff, and I live in Edgewood in Ward 5.

Um, I'm also a volunteer with the tenant power campaign with uh Empower DC.

Um I'm writing today, sorry, to show uh strong support um for the uh strong homes amendment act of 2025.

Um I overall support the strong act because it will strengthen the city's ability to hold landlords accountable and has the potential to help many tenants.

However, I also believe there uh are certain areas of potential improvement, and I will get to those in a bit.

So I support this amendment because it will be a very important step in ensuring that DC tenants can have a decent standard of living and thrive.

Uh as a teacher entering my fourth year working with DC students, I know firsthand the importance of caring for people's basic needs so that they can flourish.

My students are hungry or tired, they cannot learn.

Similarly, people in general cannot thrive as contributing members of society without having their basic needs uh, such as adequate housing met.

If we want people to thrive and succeed in our city, we need to be a place that holds the powerful accountable for providing a decent standard of living.

Furthermore, as a DC tenant for the past three and a half years or so, I know firsthand the challenges renters in our city face.

In my experience, property managers and landlords often do everything they can to avoid fixing the basics, similar to what was said before, um, and they make extra money wherever they can.

This amendment will be an important step in implementing a receivership process in DC that protects tenants as well as affordable housing.

Enabling the courts to step in and appoint a receiver and strengthening that uh when there are significant housing code violations will give tenants and the public at large a crucial mechanism for keeping our city a place where all, especially the most marginalized renters, can truly thrive.

Uh while I generally support this amendment, I have some suggestions that can make the legislation stronger, similar to what some others have said.

Uh first, there should be a mechanism to allow for substantive tenant voice in the process as long-time tenant.

As I said, I know firsthand that tenants are often left out of decision making and that living situations can uh often seem beyond our control.

Currently, there are no specific or direct ways that I know of, at least, uh that tenants can have a say when uh their property is changing hands.

Uh, given that they all be most impacted by decisions over ownership and receivership, it only seems logical and fair that tenants uh get a voice in the process.

My second suggestion is that there should be dedicated funding in the range of about 10 million dollars annually for the tenant receivership fund and for loan repairs for tenants.

Uh these dedicated funds will enable this legislation to have teeth uh and to make a substantive difference in the lives of tenants.

Uh and then finally, earlier intervention from the Department of Buildings to address Lumlord properties and conditions will prevent many of these situations from happening in the first place.

Um, also, as others have said, I support this in tandem with other legislation uh such as the um clean uh mean and lean acts as well as just improved processes of the department of buildings.

Am I over time?

I'm not sure.

Oh, okay.

Um, and so overall, while the Strong Homes Amendment Act of 2025 is an important step in protecting our tenants.

Uh, we still need more tenant voice, dedicated funding, and earlier intervention from the Department of Buildings to be added to the amendment.

Um, we need to ask ourselves what kind of city do we want to be?

One that fails to adequately hold landlords accountable for allowing the uh for allowing inhumane conditions, or one that truly supports the ability of all people to live in decent conditions, especially in the age of budget cuts and the deprioritization of human needs that we're seeing on the federal level.

We need to continue prioritizing the needs of of the most marginalized people, especially uh tenants that live in um some lower properties.

So, in conclusion, please pass this strong uh homes amendment act of 2025, but with improved uh mechanisms for tenant voice, dedicated funding stream, and earlier intervention from the Department of Buildings.

Thank you so much.

And please let me know if you have any questions.

Thank you, Mr.

Murnoff.

Um I do have a copy of your statement.

I forgot to note, Ms.

Baker.

I don't have a copy of your statement.

Uh Cameron King.

Good afternoon, Chairman and Melinson.

My name is Cameron Kang, and I'm a member of the public policy committee for the DC Association Realtors, or DCAR.

I'm also a resident of Ward 6 and associate broker on the Cree team at Cumbus.

DCAR is the district state association of realtors and serves as the primary or premier voice of real estate in the district.

Our mission is to protect and promote the interest of our approximately 2800 members and their clients who live and work every in every ward of our city.

Through our advocacy, we represent providers, small housing providers, property managers, homeowners, and renters.

Thank you for the opportunity to testify today.

Chairman, I want to thank you for holding this hearing and thank Councilmember White for his attention to improving housing conditions and strengthening the receivership process.

We agree that housing conditions are a real problem in too many buildings, and that some bad actors have abused the system, leaving homes poorly maintained and residents at risk.

Here at DCAR, we typically represent voices from the other side of the housing spectrum.

Very small housing providers who are struggling to make ends meet.

Our members and their clients are facing continued challenges with non-payment of rent, despite recent policy improvements at the same time as they are facing increasing costs for utilities, insurance, and upkeep.

They are terrified of potential rent freezes and worried about cuts to government housing programs.

In short, they see the housing system that remains unstable and unbalanced.

We agree that the district must act against slumlords where they exist, but expanding the scope of power of receivership does not solve the problem our members face.

Receivership may halt the division of funds or the diversion of funds or severe mismanagement, but they do nothing to add revenue for small housing providers who are already doing all they can to pay bills.

Further caps on rent increases and added fees can only make those problems worth.

Accelerating the process of making someone's pro or accelerating the process of taking someone's property away does not always lead to improved outcomes for the tenants.

And placing more restrictions on the sale of financially distressed properties could lead to no viable and responsible purchaser stepping in after receivership is over.

While receivership may make sense as one tool to address the most severe misconduct, no amount of receivership reform will solve the fundamental imbalance in our housing system.

Not all housing providers are the same.

Not all properties in financial distress get the there because of mismanagement of owners.

And piling up fees, fines, and court hearings can sometimes just make things worse.

Any final legislation the committee adopts must include other strategies to bring properties back from the brink of financial ruin when revenue simply cannot meet rising expenses.

In those cases, we need to offer a helping hand, not a takeover plan.

There is a role of government in helping ensure tenants comply with their leases in assisting small housing providers who are struggling to maintain naturally affordable housing and in addressing property crimes and public safety that affect these properties.

The government can and should be a partner at the table to solve these problems, just not an opponent in the courtroom.

Thank you, Chairman Mendelson.

I would be happy to answer any questions you may have.

Thank you, Mr.

King.

Five minutes.

I think I just have one question, but might lead to a couple of series.

Um There was some testimony in Mr.

Murnoff.

You were one of several who said there should be a tenant voice in the process.

But you said that we should figure it out.

I can't I can't quite figure what that would be.

Yeah, so um I think that there can be so I mean I would defer to other people like at Empower DC that are more knowledgeable on this than me, so they can so I can talk with people to follow up.

Um but my understanding of it being less familiar with that, um, is that there can be some sort of uh mechanism, either like something like uh TOPA style or something like that that can allow people to make sure that they have some sort of role um over what happens.

I think more of the argument that I was making because I'm definitely not as familiar with like the technical aspects of what that would look like, but it's more like the moral um argument of that like if you if something is going to impact the property that you're on, then you should have some sort of say over the direction, uh, or there should be some mechanism where you can have some say over the direction that um that goes.

But yes, I would definitely defer to other people that are more at the organization that are more expert in that than I am.

Okay, maybe I'll leave it there.

Uh Councilmember White.

Uh thank you very much.

Um I hear you all on the funding that that is uh separate from the authorization.

So this bill means you know very little if there's not funding, because as we heard from the previous panel, just because you have a receiver, even a new owner, doesn't mean they can make the repairs, and what we're interested in is not just a different person who can't make the repairs, but somebody who can make them.

So 100% with you on that.

Um, heard from you, Jan Baker and from you gave uh Murdoff um the notion and somebody from the first panel that there should be tenant voices should be added.

Dude, do you have thoughts on what that should look like?

Well, um, like I said earlier, could weight be given in any court process to the tenants association's goals or recommendations, including who the property is sold to?

It's interesting.

All of these leasing offices, they have to vet the candidates who come in to have to live in the building, right?

We should have a voice on who's buying these buildings, right?

We should be able to look.

Is there a like a car fax for landlords?

Because honestly, some of these landlords have had a track record of not doing what they're supposed to do, but they're able to take over a building.

How is that possible?

And even if they have a portfolio, I know that Vanith Management has a portfolio of probably over 105 properties, some of them in New York where I'm from, and they're having the same issues in New York as well.

So if we were able to have a better understanding and the tenants association was supposed to have, we're able to have a stronger role in these decisions that are being made, including with the DOB.

We've asked for the DOB to um take their processes and understand that a lot of times we are the ones that the tenants are giving the keys to so that you know we talked earlier about how tenants don't want to let the DOB into their apartments.

Well, a lot of times our board are the ones who are at the apartments who may work from home, may take time off on work so they can let the landlord in so they because there's zero trust.

Tenants' associations also need to have more put more respect on their names because we are the ones out here doing the work.

So, yes, I do believe that there should be more um strengthening strengthening the ability for tenants' associations to have a voice in these processes, especially with the department of buildings.

I appreciate that.

Um we'll have to work with folks who figure out what what that might look like as uh as we move forward.

Um Mr.

King, uh, we're not talking about property owners where like there's a doorbell broken or the stove broke yesterday.

We're talking about people who literally have to open the oven for winter.

And your testimony is as I heard it, it's going to be annoying to deal with fees and court processes, and we can't guarantee that the next actor would be better.

I got it, I need more from you.

Uh, because I'm I don't want to leave here believing that you support the issue we're trying to fix.

So I want to I want to provide an opportunity to clarify and hopefully find some partnership here.

Yes, correct.

So to lead, we will I will say that our members we haven't experienced uh receivership or where our members have had a property come into receivership what we are addressing is that this uh the amendments that have been made or the changes are proposed keep or create a level broadness that there could be a lane where a smaller landlord could be impacted by the receivership and tenants could take that route.

So we are very clear that this what we're or what is proposed is not uh denying the fact that a lack of heat a lack of utilities is not critical to fix.

We are trying to delineate and and make sure that it is not small items that can somehow get grouped in where it's a doorbell it's I do actually think garage doors are important so it's not a door latch not working properly in a bedroom for example.

Okay.

So let's let's work together in that lane because when we look the other way on bad actors it makes it worse for the good actors which I think is ultimately your your concern correct uh I've also I could use your your partnership I've been talking for the past two years until I'm blue in the face about the need for funding for small landlords and for building repairs and I'm not getting a lot of support for it and so hopefully that's a place we can work together because I I do think we're going to continue to see more bad conditions from good folks if if we don't find that problem so the answer is not one of these it is it is both of these.

Yes Ms.

about the voice for the tenants associations and power DC has convened the department of buildings and tenants associations twice in the past year and you said you need help on some you know to move that along there's we have a whole list of opportunities for the DOB to improve their their services and to have quarterly meetings with tenants associations and buildings outside of the landlords to hear their voice so we do have actually we can send that to you and Empower DC can send that to you we have a lot of suggestions on how we can implement that.

Okay I appreciate it.

And one of the things you mentioned was funding and some of the what we've heard today multiple people ask for additional funding for those larger repairs and I think you're right on a point with the idea of for those small landlords to potentially having two separate pots of funds so quicker access maybe an express option and then for these larger scale situations.

Yeah I I think there should be we've got to make it easier for good landlords to borrow money at low or no cost in order to make repairs without jacking up rents because the vast majority of our our multifamily buildings in DC are 50 years older older.

But that's a place that's just going to need a lot more public and industry support because I'm not getting a lot of traction here.

Thank you.

Thank you chairman thank you Councilmember Council Member Bonds.

Thank you chairman um I just have a few questions I'm very interested in how we pay for this we I think we all agree that there's a tremendous need to make sure that the housing stock is bought up to a higher standard.

And in thinking about how we pay for this I'm very curious as to how you really see the role of the tenants you mentioned the tenants association being having the ability to bring access to different units uh when the inspections are required but I'm wondering if we're also talking about maybe an agreement um you know we're we don't really do re renewed leases in the District of Columbia but maybe we do need a lease and the lease should be um very clear that delineates the role of the tenants association.

And it also makes clear the role of the tenant and the role of the landlord so that we finally will get a set aside amount of money from day one, not from your lease per se, but from the property itself that can help with these needs, general upkeep, etc.

I think we are at a point where we're talking about, excuse me, where we're speaking of there being um a partnership.

You know, we live in these places long term.

I once was in a tenant association, so I've I've I've walked the halls.

Okay, so I know a little bit about that.

And as a result, we we have to share, you know, we have to share this responsibility.

Now I know we those who live in these buildings also work every day.

I'm not suggesting that we clean the halls and do the shrubbery outside, but I am wondering if there isn't time to think about the agreements that we have for the people who live in these properties and wondered if you have given any thought to that.

I love a little bit of more clarity when you were talking about the money and then the agreements.

I'll tell you when I know when we say money, I know it's like uh 2M Apartments Tenants Association does not take uh fees or or dues for our tenants.

Are you talking about dues for the Tenants Association?

Um, no, well, ultimately you'll need some, you'll need a kitty.

You'll you'll need some some resources.

I'm gonna push back on that just a little bit, Councilman Bonds.

Because if you create morale in your building where it's a community, when events management was taking over to him, right?

They took over December 14, 2021.

They bought us into the courtyard and they kept referring to us as an asset, they're a private equity capital management company.

So when you refer to your your community as an asset, we already know what you're coming to the table with, right?

If you treat your tenants like it's Rikers Island when you walk into the building, then there's not gonna be a lot of um onness to want to pick up uh after yourself or you know, we're treated as if we are the enemy, we're treated as if we are the problem.

So I'm sure, and and this is obviously not your wheelhouse, but you have been in a tenants association, you know that the morale in the building is a lot of times dictated by the way the leasing office and the property management treats the tenants.

So there wouldn't be as much to clean up.

Everybody would be doing their part when we're treated like a community and not like, well, that's kind of like where I'm trying to go.

I'm trying to go to there being this community, you know.

You're with um the two M.

Okay.

So that's a community, and it does include the landlord as well as the tenants.

So I'm trying to understand how you see us generating the resources that you will need because you're gonna need some resources to do you're gonna need resources to um publish your newsletter to disseminate it to to others to to share the the bounty of how you are organizing yourselves to make sure you have a quality living environment.

But that's just you you hit on the money side.

I'm trying to get to the relationship.

We the the two ends tenants association has been pr um doing a Earth Day cleanup every year with alongside Charles Allen's office for the past year.

We don't do the the property management doesn't do a cleanup.

They don't do events for us or anything.

It's us.

So I'll say you talked about our what we bring to the table.

If you're running a community and everybody's happy, then they're they're not afraid to bring their talents to the table to contribute them to the wellness of the building.

I can do graphic design, I can do all kinds of leadership things out if I'm if we're treated.

So I'm really asking how do we get everyone happy so that we have a it would be nice to start with heat and um AC that we're paying for and the garage door being and elevators working and actually security that greets us like tenants and not like convicts.

All right, it would start there.

That's a great starting point.

Thank you.

Thank you, Councilman Bonds.

I ran out of time.

I'm at five minutes.

I could go on if you want to make it.

We have more witnesses.

Okay.

Thank you, Councilmember.

All right, thank you very much.

Thank you very much for your panel.

We're gonna turn now to the government.

We have Beth Mellon, Assistant deputy attorney General.

In the public advocacy division and senior counsel for housing protection and affordability.

Brendan Downs, Assistant Attorney General in the Public Advocacy Division, both with the Office of the Attorney General and Keith Parsons Strategic Enforcement Administrator, Department of Buildings.

Now I only have a statement from Mr.

Downs and Mr.

Parsons.

Ms.

Mellon, do you have a statement?

No, Chairman.

I'm here to answer questions.

Thank you.

Okay.

Well, then we'll have to think up some questions.

Um, Mr.

Downs, do you want to go first?

Thank you.

Uh good afternoon, Chairman Mendelson, Council members and residents of the district.

My name is Brendan Downs.

I'm an assistant attorney general in the housing and environmental justice section at the Office of the Attorney General for the District of Columbia.

I'm here to express OAG's strong support for Bill 260493, the strengthening tenant receivership and oversight for neighborhood growth, or strong homes amendment act, which would enhance OAG's ability to more quickly hold negligent landlords accountable and protect district residents who are being forced to live in dangerous housing conditions.

I'd also like to thank Councilmember White for his collaboration with our office on this important legislation.

For the past ten years, OEG has been has dedicated part of its affirmative enforcement docket to protecting the health, safety, and security of the district's tenants living in dangerous, substandard, unlawful conditions.

OEG's primary enforcement tools for addressing poor housing conditions are the Consumer Protection Procedures Act and the Tenant Receivership Act.

Under the CPPA, OAG can bring claims against rental housing owners and property managers for unfair and deceptive trade practices, including violations of the district's housing and property maintenance codes.

OAG can also seek orders for repairs, penalties for past violations, and restitution or rent refunds for tenants.

In the most serious cases with ongoing patterns of neglect, OEG has the ability to hold the landlords accountable by enforcing the TRA, which allows OAG to request an appointment of a receiver, a neutral third party who works under court supervision to take over the property on a temporary basis.

The receiver can assess repair needs, collect rents, request other funds from the owner, and ensure that repairs are being are made to bring the property up to code.

Given the scope of a receiver's authority over a property and the statutory requirement to show an ongoing pattern of neglect, OAG utilizes its TRA authority sparingly.

Only when severe housing conditions place tenant safety imminently at risk, and our efforts to work with the property owner to bring the property up to code have not been successful.

OAG must meet a high evidentiary burden to satisfy the court that appointment of a receiver is necessary.

Under current law, the TRA, while effective, can result in protracted cumbersome litigation that runs counter to the statute's intent to address emergency conditions as quickly and effectively as possible.

The proposed changes in the Strong Homes Act would strengthen and streamline OEG's enforcement efforts in keeping with the statute's purpose.

I'll briefly highlight three specific ways that the Strong Homes Act would provide OEG with stronger and clearer enforcement tools and help deliver results for district residents living in dire circumstances.

First, the Strong Homes Act includes changes to ensure the court can consider the appointment of a receiver and other necessary relief on an expedited basis.

Under the TRA currently, landlords can avoid appointment of a receiver merely by proposing an abatement plan.

This can result in repairs being delayed for many months while OEG and the court monitor the owner's progress, and far too often an owner with a property already in severe neglect lacks the funds or the will to fall through on repairs.

The Strong Homes Act would remove the ability of an owner to delay necessary repairs with the mere submission of a proposed abatement plan and instead direct the court to either issue a preliminary injunction for urgent repairs or move immediately to appointment of a receiver.

Should the court issue a preliminary injunction, the act specifies that failure to comply with such an injunction creates a presumption that a receiver must be appointed to operate the property.

Second, the act includes critical provisions to ensure that sufficient funds exist to rehabilitate a property in dire need of repair.

Delinquent landlords frequently fail to pay for receiverships promptly or at all.

The act would require landlords to provide upfront financial disclosures, identifying any money available to fund the receivership and where it is kept.

The act would uh allow also allow OEG to quickly and fuse a receivership with money from our tenant receivership abatement fund without the current requirement of a finding that the landlord is unable to pay to address specific needs, including making initial or emergency repairs, maintaining critical services, relocating tenants when temporarily when necessary, and paying the receivers for reasonable fees.

While our tenant receivership abatement fund has limited funds available, it has proven critical at times to address emergency situations promptly.

The provisions in the act that ensure receivers are paid for their work will help OAG attract responsible receivers for these difficult assignments.

Third, the act strengthens the court's authority to force a sale of the property if necessary to a new qualified owner.

When conditions deteriorate to the point that a receiver is required, often a change in ownership to a responsible party is necessary.

The act would allow the court to order a receiver to sell a property or place it in a bankruptcy if the owner lacks funds to pay for rehabilitation, refuses to pay for a rehabilitation or otherwise operates in bad faith.

Any potential purchaser would be required to submit a detailed abatement plan to address all outstanding code violations, as well as a detailed funding plan to assure the court their repairs will be completed.

The act also specifies that a receivership will remain in place whenever property ownership changes, whether because an owner chooses to sell or the court orders such a sale until the property is brought up to code and all relevant amounts due to the receiver in the district are paid.

Together, these changes would remove roadblocks and delays that OAG currently faces when using the Tenant Receivership Act to bring properties back into compliance with district law and make them safe and habitable for the residents who live in them.

The Strong Homes Act also strengthens OAG's authority to enforce the construction codes and to dissolve business entities that repeatedly break the law.

The Act clarifies that when OAG brings an action to enforce the property maintenance code or other parts of the construction codes, the court, in addition to stopping illegal construction, can order other reliefs such as requiring a landlord to perform repairs.

Similarly, while OAG already has the authority to seek judicial dissolution of business corporations, nonprofit corporations, and limited cooperative associations when they exceed or abuse of their authority.

This power does not extend to LLCs or limited partnerships.

This gap in the law is problematic because landlords typically use single-purpose LLCs or limited partnerships to own title to rental properties.

Expanding OAG's authority in this regard will provide another tool to quickly shut down slumlords, get properties into the hands of responsible owners, and more effectively and expeditiously protect tenants and stabilize substandard housing.

In sum, the Strong Homes Amendment Act would close gaps in the Tenant Receivership Act and other parts of district law that keep dangerous buildings and disrepair for far too long by giving OEG stronger authority to move quickly to protect tenants and stabilize properties.

Thank you, and I welcome any questions.

Thank you, Mr.

Towns.

Mr.

Parsons.

Thank you, Chairman.

Good afternoon, Chairman Mendelson, Councilmember Bonds, Councilmember White, and staff.

I am Keith Parsons, Strategic Code Enforcement Administrator for the Department of Buildings, or DRB.

DOB regulates the built environment of the District of Columbia by issuing permits, conducting inspections, and enforcing the district's building codes.

We protect the safety of the residents and businesses who call DC home.

The team I lead at the Office of Strategic Code Enforcement, or OSCE, is at the heart of this effort.

We regularly work with stakeholders from across the district, landlords and tenants, policymakers and prosecutors, to develop and implement enforcement strategies, monitor code violations, and enforce compliance and the collection of fines.

I'm proud of our team's efforts to make the district's built environment safer.

Steps that we have taken in close partnership with the Office of the Attorney General, or OAG, whom I joined today in offering testimony in support of the Strong Homes Amendment Act of 2025.

This bill would enhance the legal tools available to OAG as they address distressed properties at DRB's request.

Its provisions are based on real examples where we worked with OAG to try to bring properties into compliance and were stymied by issues the bill addresses.

While closely related, the work performed by DOB and OAG fills different roles in housing enforcement.

DOB can identify building-related infractions and write fines.

We can declare a building unsafe or vacant and proactively communicate with landlords and tenants to resolve any issues we spot during inspections.

However, we cannot separate a bad owner from the property that they own.

We depend on OAG to pursue such accountability through the court system and obtain relief for residents where the problem with their building is not just chipped paint or a broken door, but a pattern of persistent neglect that stems from the property owner.

To make an analogy to white-collar financial crimes, think about the DOB as the U.S.

Securities and Exchange Commission and OAG as the Southern District of New York.

DOB can identify the bad actors and issue fines, but only OAG holds the authority to separate those actors from their property.

OSCE routinely refers the most egregious cases to OAG for enforcement.

Over the past year, we worked with our colleagues at OAG to build a first of its kind Racketeer Influenced and Corrupt Organizations Act case against SAMRAS Julian, one of the district's most notorious slumlords.

We helped build evidence for the case by conducting inspections at over a hundred properties and spotting conditions that were then cited in the lawsuit.

This bill would expand on this partnership model, empowering OAG with the necessary authority to act quickly and decisively.

One way to address a distressed property where building ownership is not doing its job is to ask the court to appoint a third party called a receiver to receive the funds and rents from the building and do the owner's job for them for the tenants' benefit.

This bill would speed up how the court appoints a receiver to take over property management from persistently negligent landlords.

It would empower the court to act decisively in addressing dangerous and noncompliant properties and improve the sale process, recognizing that sale to a responsible owner is often a receiver's most effective path to restoring a property to safe use.

This bill would also remove the landlord's ability to enter into an abatement plan during the receivership case, which is historically fueled delays and noncompliance.

Typically, properties that are referred to OAG for receivership are those in which DOB has already attempted to work out an abatement plan with the landlord, and the landlord has failed to meaningfully engage with us.

Removing this step from the receivership process incentivizes landlords to engage with DOB earlier and take the enforcement process seriously, even before OAG brings suit.

Facing a receivership lawsuit is not a situation that a landlord can stumble into accidentally or without the opportunity to come into compliance.

The bill would also strengthen the injunctive relief available under the construction codes, which is a tool DOB relies on directly.

It makes clear that when anyone ignores DOB's correction orders, the court can order the specific repairs and work needed to bring that property into compliance.

A clearer path to compelling correction means DOB can resolve dangerous conditions more quickly without waiting for the property to deteriorate further.

Lastly, one of the most important elements of this bill is its death penalty for limited liability companies.

Under current law, OAG can ask the court to dissolve a corporation that is used for improper legal purposes, but it cannot dissolve an LLC.

Because most distressed properties are held by LLCs, this limits OAG's ability to seek dissolution of a building's ownership entity.

DOB has supported correcting this limitation for some time, and I've testified about it before.

Giving OAG the authority to dissolve an LLC will permit a more powerful and precise prosecution of problem properties, regardless of ownership structure.

I would also offer that responsible property owners should support this bill.

If a property is maintained safely and in compliance, none of the tools in this bill would apply.

This bill is aimed squarely at the district's worst actors, those who've abdicated their duties as property owners and inflicted harm both on their tenants and their neighborhoods.

For context, OAG typically brings a half dozen receivership cases a year.

It is my hope that we'd be able to increase this number.

I know that many folks here on the council can think of several buildings in the district that need more responsive manner management or even new ownership.

In conclusion, DOB supports the strong homes amendment act of 2025 as a common sense proposal, one informed by experience and history that fills enforcement gaps and protects our most vulnerable residents.

I would like to thank the committee for its attention and willingness to strengthen the district's housing safety laws.

I look forward to answering any questions you may have.

I have a couple questions.

So there was testimony earlier, Bill Slover, that led me to press him.

He asked for funding in the tenant receivership abatement fund and then separately funding bridge what he called bridge funding.

I got a little bit confused why the tenant receivership abatement fund couldn't be used for the bridge funding.

I'm not sure who has this fund.

It sounds like there's no money in the fund.

What can you who can answer this and what can you tell me?

I can at least start.

I can at least start, Chairman.

I'm sure my colleague will chime in.

Mr.

Slover certainly is pointing to a significant issue in these cases.

The money, the only way to get a receiver in the first place is if there are emerging conditions at a property, and you need money to address the emergent conditions.

There's no debate.

I do think there are some provisions in the existing statute and in the proposed amendments that do help with the issue.

First off, immediately as soon as the receiver takes control of a property, they're now in control of all the rents that are received thereafter and any rents that are on.

That wasn't true.

That's not true under current law.

It is true under current law.

Okay.

Yeah.

Uh, and uh all rents that you know accrue during the uh duration uh of the receivership as well.

Uh then also in in the amended legislation, there are affirmative disclosures that are now required of ownership immediately off the bat at the beginning of a case to let us know what sort of the universe of potential funds are to fund a receivership from the owner's side.

I think that will go a long way.

The act also makes knowing that then the attorney general has the ability to ask the court to say, hey, landlord Smith has got these additional funds, make them available.

Absolutely.

That's correct.

Um, um, and then of course, it also makes it easier for us to use the TRA fund that we have.

Uh, it it creates additional circumstances in which we can deploy those funds.

As to your question about what is in that fund, right now there is no money in that fund currently.

Um, whether or not uh there are changes made to the statute that alters that funding mechanism or as additional funding.

We'd be more than happy to uh engage with you all on to discuss uh how that might work.

Uh but there are certainly some provisions under existing law that help to fund receiverships.

There's a point where it's difficult to get blood from a stone, and if we reach that point, I mean, this is true under the existing law as well.

If the owner doesn't have the funds to pay for a receivership, that can trigger a sale, right?

And the and the amended uh legislation also says if the owner have the has the funds but is unwilling to pay, that can trigger a sale, or if the owner is operating in bad faith, that can also trigger a sale.

So I think part of what the statute is trying to accomplish is if there is no money whatsoever coming from the owner's side, we need to move as quickly as possible given the conditions to get the property into more responsible hands.

So there's the tenant receivership abatement fund.

Is it the attorney general's office?

That's correct.

And there's zero money in it.

That's correct at the moment.

And has there ever been money in it?

Um, my colleague, Miss Mellon knows knows the history.

So, Chairman, uh I think it's important to emphasize this is a relatively new fund, and our use of the fund is also relatively new.

Um, the council allowed the attorney general to fund it from excess restitution that was mentioned.

And so it was funded with $750,000.

It was first used at the foster house apartments.

Mr.

Slover mentioned that.

Um, we had a need there for emergency issues because the fire alarm system was not functioning.

The building had fire watch, that's terribly expensive.

There were tenants staying in hotels because of mold and leaks in their units.

And so OAG made a request to the court to go ahead and fund those emergency issues.

The fund was depleted very quickly by the foster house case.

So within a period of months, 700,000 of the 750,000 was spent.

And so I think it was a good transition point to him having other funding available, which he then did use to keep that property as stable as possible, pay utility bills, pay the other responsibilities that he mentioned.

The fund has only been used one other time.

And so our use of it is fairly new.

And as Mr.

Down said, we're very open to discussing other ways that the fund could have money or could be used.

So was the fund created by statute?

Yes.

So it is with it is both within OAG's organic statute, there are references to it and within the tenant receivership act itself.

And I would have to go back and look if that was in the amendments that were around 2019, I believe so.

So the funds have been around for maybe five, six, seven years.

Correct.

Only used twice.

Correct.

And why can't I guessing the litigation support fund that the OHE has doesn't allow for this, but would that be a viable source?

So the organic statute, the provisions, which I will say are being amended by the Budget Support Act that you all voted on earlier today, you are correct that it does not allow that as a source of funding to the tenant receivership abatement fund.

The restitution fund is, however, and when we have funded it, and we did infuse it with some funding after the initial 750,000, that was from excess restitution that we had in that other fund.

And the restitution, I take it is that's episodic and at the moment is empty.

Um it is not empty, but what I would uh say in general in response to your question, that fund exists so that workers, tenants, and consumers can get money back.

And so it's only if we have excess money, meaning, for example, we have done a claims administration process, tenants have made their claims in a housing case, we were not able to distribute all the money, and the money is not unclaimed property.

It's a lot of requirements to get to the point of having excess.

If we have that excess, it then is available.

And so the balance of the restitution fund is not the same as what might be available at any moment in time as excess, if that makes sense.

Uh, should we be looking at that law to make that excess easier to access?

What I would say, Mr.

Chairman, is I think um the specifics are tricky here, and so we would be happy to work with your staff, um, council member white's staff, council member Bonza's staff, you know, with the council to think about a specific mechanism and how that would work.

I think your questions illustrate some of the issues around the different funds that our office has, um, and uh what the feasibility would be to provide additional funding so it's available.

So when there's a a building like the foster house, the city put some money up for the uh to replace the fire system.

Um is it probable that the city gets can get reimbursed?

So uh I will tell you what has happened in that case just a little because it is a pending case.

Um, and so we did use the mechanism under the statute to record liens.

Those liens, as I believe was referenced earlier, are super priority liens.

Um, and so if, for example, the property were sold at some point, those liens would be paid first.

That's an existing provision in the statute.

Um, I don't want to go further than that, given where that case is in the court system.

So I'm not asking so much about foster houses.

I'm asking about whether the funds can be like a revolving fund.

It sounds like it can be, but in slow motion.

Correct.

So you have it exactly right, Mr.

Chairman, that the the provisions, statutory provisions that we're talking about also say that when an owner repays the funds that are due, um, which should happen in the normal course, of course, but we can use lien authority and other mechanisms to collect if they don't pay, um, that money will be put back in the fund.

And it will remain in the fund until it's used again.

And so currently $750,000 plus interest is owed by one party, um, and approximately $450,000 plus interest is owed by another party.

We hope those funds will come back in, but litigation takes time.

So slow motion is the right way to think about it.

So are there restrictions on the tenant receivership abatement fund so that it cannot be used for the bridge funding that Mr.

Silver talked about?

Well, I think this is where strong homes comes in.

So the statute currently says initial and emergency repairs, but only if you make that finding the landlord cannot pay.

We have found in past cases that the finding that has to be made by the court that can take months.

You know, we may need to do additional discovery to get information from the party.

We may have to conduct an evidentiary hearing.

Something like a fire alarm system being broken cannot wait several months to make that finding.

So our proposal in this bill is to eliminate that initial finding, the requirement for that, but still keep it focused on initial emergency repairs.

We think that's appropriate.

So that's the bridge funding, if you will, that I think Mr.

Slover has in mind.

Okay.

So I'm looking at Mr.

Downs' testimony.

Um provision the act includes critical provisions to ensure that sufficient funds exist to rehabilitate a property in dire need of repair.

That's not quite right.

It doesn't ensure that the money is there, it makes it more likely.

It sounds to me like we're gonna probably have to appropriate some money into the fund.

Uh, Chairman, I th I think it's it's fair to say that it makes it more likely, yes, that the funds would be there.

It adds certain mechanisms that allow us to determine what is the universe of available funds that can be used for receivership.

Uh, it gives us additional ways to go and recover those funds uh if they're if we've expended our our own funds out of tenant receivership abatement fund.

Um, and you know, as I mentioned earlier, it makes it faster to sell and things of that sort.

We can uh get a final judgment from a court that allows us to go and collect the judgment uh against the owner, but I think your your characterization is accurate.

So it would be helpful as we work on this bill to have some conversations.

I know you do work closely with our staff on funding sources, because it's gonna need to be money to make this happen.

Thank you.

Councilmember White.

Uh thank you, Chairman.

Um I'm sorry, can you remind me where the funding comes from?

From like litigation recovery fund.

So what the statute says right now, just a few points.

First of all, there's a cap of two million dollars in the fund.

Okay.

Um so we could never go above two million dollars under current law.

It says that the attorney general can fund it from excess restitution or from owners paying back money that has been spent.

Okay.

So so one of the other ways, I mean, in addition to lifting the cap, there are some things that OAG funds these days with uh funding you get in from uh successful uh lawsuits, is that right?

Correct.

So that would be the litigation support fund, which I will just note is um very necessary and highly utilized to funds you know staff and litigation expenses.

But but I think you you you are only allowed to use a portion of what you bring in, and some of it goes to the general fund.

Is that not accurate?

That is correct.

Okay, so what I'm not saying, I'm not suggesting taking from the litigation support fund.

What I'm suggesting is that other funding that comes into the agency above and beyond what's in the or needed for the litigation support fund could feasibly go into this fund.

So I will just say that I think those are questions that are above my pay grade.

Having said that, we are happy to talk to the committee about these questions, because we fully acknowledge the lack of funding is a problem.

We have made some changes here, proposed some changes to help address it, but will they completely fill the gap?

Yeah.

No.

Okay.

My only point being is that there may be ways without impacting OAGs funding at all to fund this with less uh revenue appropriated.

Understood.

Um also just want to touch on a couple quick things to avoid any misconceptions or around the legislation.

Um who can who can petition for a receiver?

Can a tenant do that?

In almost all circumstances, and certainly in practice, it is the attorney general on behalf of the district that's petitioning for a receiver.

If the attorney general declines to pursue a receivership, then the majority of tenants at a particular property can themselves move for receiver.

We discussed it a bit internally.

We can't think of a specific instance in which uh tenants attempted to do so.

Certainly there have been tenant lawsuits on the consumer protection procedures act, but in some it's almost always the attorney general.

Okay.

And could let's say I'm a tenant in a 50-unit building and my refrigerator is broken, can I can I get a receiver?

Uh the the short answer to that is no.

Uh and the reason for that is the tenant receivership act is really about a pattern of neglect that the owner has demonstrated, right?

Our sort of prerogative in our section is to go after the worst of the worst housing providers in the district.

In many ways, TRA cases are sort of the worst of the worst of the worst.

Yeah, right.

So we have to show that there's been a pattern of neglect, that that pattern of neglect has resulted in serious risk to tenants' life, health, and safety.

So we need to show widespread issues affecting tenants, and that those issues are serious.

And even more to the the guardrails, even if the OAG proves its case, and this is the worst of the worst of the worst, the statute says the court may appoint a receiver.

So the judge still retains some discretion.

That's exactly right.

That's what the statute says, may appoint a receiver.

And in our experience, the court recognizes and we recognize that the owner's property interests are at stake here, and that there are serious consequences for the owner's property interests.

Uh at the same time, the owner has to earn it, if you will, in order for us to meet that burden.

Okay.

And um I want to uh address some of the delay issues that that we've seen and heard about.

So, under the current law, an owner can defeat a uh proven receivership case by handing the court an abatement plan, and the court must then monitor that plan.

About how often do owners offer these plans?

In the vast majority of circumstances, owners do offer those plans.

And I think uh part of that is is recognizing that that can create a delay in the appointment of a receiver.

And frequently, not frequently, somewhere in the middle, about how often do owners um actually complete the plans.

I would say it's unusual that they're completed in full.

Okay, and the uh Marbury Plaza, which is is one of the properties that bothers me most in in this city.

Um my recollection of the timelines that OEG filed its lawsuit in July of 2021.

There was a consent order in January of 2022, contempt in April of 2023, bankruptcy that September of 2023, a receiver in early 2024.

Um, and so this is a long timeline of several years at each stage.

I guess the more clear question is would the provisions of this bill have shortened that timeline?

Yeah, uh it's it's a case I'm I'm very familiar with um personally.

Uh and the the answer honestly is maybe yes.

Uh I think when we're sizing up the statute and looking at hurdles that we might have to clear, uh we might petition for a receiver far earlier than we otherwise would have, right?

Because we're we're in part recognizing that this roadblock of an owner proposing their own plan is something that we're gonna have to get over and it's gonna be protracted in its own right, and because that provision exists under current law, in that case we went the preliminary injunction route.

We got a preliminary injunction that the owner ultimately agreed to a consent to our preliminary injunction, but then now we're in the process of monitoring this endless plan that they never ultimately comply with.

We end up moving for contempt and ultimately moving for a receiver, but might that saga have changed substantively with these amendments?

Yeah, quite possibly.

And when an owner violates a court order today, your remedy is contempt, is that right?

Uh typically, yes.

Okay.

Um and that requires an elevated standard of clear and convincing evidence uh at Marbury uh plaza, there was also a three-day evidentiary hearing.

Did you handle that hearing?

Yes.

Okay.

Myself and my colleague.

After uh months of of briefing, uh does the bills this bill's rebuttable presumption change that sequence at all?

I I I think it does in a sense that it gets us to a receivership faster if a preliminary injunction is in place, right?

The only way you can get a preliminary injunction in the first place is if you've established that there are serious health risks to tenants' health and safety under the statute.

Then the owner has to fail to comply with the requirements of the preliminary injunction.

And then only if that they fail to uh comply in that sense, then the rebuttable presumption is created that a receivership will be appointed.

Of course, an owner can then rebut the rebuttable presumption, if you will, and say, look, we're making substantial progress, there's nothing more that we could have done, but we think that that provision is important to sort of say, hey, we've tried this for a while.

You've remained under control, you've had these very strict requirements from the court, you haven't met them, these are emergent conditions.

It's time to move this into somebody else's hands.

Um Let me skip the funding piece because the the chairman pretty pretty well covered it.

Um Mr.

Parsons, uh thank you for being here.

Uh roughly how many buildings in the district currently carry long unabated violations of the kinds that this bill names.

Uh I don't know the building, the number of buildings, um, and I'm not uh sure what number of violations you're referring to, council member, but um a lot of buildings.

A lot of buildings.

Okay.

Um the how does DOB play any role with OAG in deciding which chronic properties get referred for receivership?

Uh certainly council members.

So basically how it works is um my colleagues have been talking about how they try to establish a pattern when they're bringing these cases, and very often the Department of Buildings record of unabated housing code violations is and uh notices of infraction is part of the evidence OAG uses to establish that pattern.

And in terms of uh how we work together, uh I meet with colleagues from RAG every month.

Uh we talk about uh wide number of properties, and uh very small subset end up escalated to the point where there's a uh receivership case.

Okay.

Um two quick capacity questions.

Um will DOB need additional inspection capacity if this bill passes or if uh cases accelerate.

Uh depending on how cases accelerate, um, I suppose it's possible, but as the uh as we're sitting here today, I think um the answer is probably not.

We would probably work through existing cases um first.

Um last question because you just beat me, Blaine.

Um the bill uh has purchasers of receivership properties, file signed acknowledgment acknowledgements with DOB accepting the outstanding violations.

Is DOB currently equipped to track and enforce those commitments?

Councilmember, I believe yes.

I mean, if we're talking about um cases of receivership, it's a small number of cases.

My staff could could track and receive those currently.

Thank you very much.

Uh, thank you, Chairman.

Uh thank you, Councilmember.

Councilmember Bonds.

Thank you very much, Chairman.

Um, Mr.

Downs, I just want to ask a little bit about the um time frame that it takes your department to reach out to the attorney general's office to determine that there is the need for moving the property into their review.

You indicated that you work cooperatively with them, and I'm just wondering, you said you did not know the number of buildings that fall under this um uh situation.

So I'm just trying to get a sense of well, how long does it take after you have received multiple violations at a property before it finally can reach the Attorney General's office?

The usual time frame.

Uh thank you for the question, council member.

Um I would first say there's no real usual time frame.

Every uh property is going to be uh different, and usually the number of violations we're talking about is quite high, and the relationship with the landlord or property manager unproductive before we start talking to the Office of the Attorney General about this kind of relief.

So it really is a case-by-case basis.

It takes a long time to accumulate a lot of violations, and there is quite a uh period of, you know, are they working with us?

Are they not working with us?

Is this case something that we have resources to escalate?

Okay, and and I I understand that.

What I'm trying to also understand is what happens in the reporting of violations and the review of the violations by your department that says these number of violations over this period of time are so egregious that it's now time to move it to the attorney general's office.

Have you all done any clocking of that?

I mean, take Mulberry Plaza, sounds like it took us four years before we really got it to a place where we needed to look at it differently.

And I'm just trying to understand because this is about people living in very unsanitary, unsafe conditions.

And want to know if ultimately for me, this bill is important if it's going to cut through red tape, if it's going to cut through the timeline, and if it's going to bring benefits to the folk who live on these properties.

If it doesn't do that, we're just talking another procedure, another of our 2,000 bills that we do every year.

And I I'm at a point where you know my time is limited now on the counseling.

I'll be leaving in a few months.

So I want to see that we're really we're very serious about how we are treating the people who are here.

I won't be able to advocate for them, so you got to advocate for me for them.

So that's what I'm trying to get to.

Yeah, thank you for the count uh for the question, Councilmember Bonds.

Um, here's how I think this bill will help improve DOB's abatement time frames.

And just for the record, the time frames we hold landlords to in our dashboard or public dashboard are uh, well, in our notices of infraction, emergency violations have to be abated within 24 hours, and routine violations within 60 days on our public dashboard, uh we track the percentage of violations that we confirm abated in both of those buckets within 30 days for emergency and 90 days for routine to give some time for the landlords to come back to us and for us to determine that.

In the case of this bill, it will incentivize the landlords to engage with our process because they will know that they have to clean up their act before it gets to a receivership case.

If they can't start trying to clean up their act when the receivership comes down and say, Oh, now here's an abatement plan.

Now I'm gonna work down the 700 plus violations that are on the Department of Buildings website.

If they have to work on that before they get in front of a judge, then it's gonna push back the time frame for overall resolution for the citizens of the district.

So I'm very I'm very positive on this bill's ability to influence that.

I guess I'm back to when does it get to the judge?

Because you mentioned 700 violations.

Does it have to be 700 violations before it gets to the judge?

Or does it get to the judge when it's 50 violations or 100 violations?

Beth will answer.

Thank you, Councilmember Bonds.

I just wanted to jump in to say, and I understand it's not exactly the nature of your question.

Um OAG and DOB are in contact on a weekly if not daily basis on a whole range of properties.

Um, and for example, our consumer and tenant response team, which deals with individual issues like a tenant at 2M reaches out and says there's no heat in the building right now, right?

To we don't use this apparatus to deal with that.

We reach out to the 2M ownership.

We reach out to Keith Parsons' team and say we need an inspection out there so you can cite it.

Um and so we have a whole variety of ways to deal with conditions.

I know you're focused on the worst buildings, and that's the nature of the question, but I don't want the record, I want to make sure the record is clear that we have lots of things moving in any moment in time, and Keith Parsons and his team are wonderful at responding to immediate requests from us essentially on a daily basis.

Um it is the tools of the tenant receivership act.

Yes, we do reserve them for the worst of the worst.

Um we want them to be more expedited, but I think that balance is important, as Mr.

Downs said, in terms of um property interests of the owner and so forth, and just the time, frankly, it takes for our office to go into court, the drag on the court system, our resources, etc.

Um, so I know that may not be a satisfying answer, but I do want to make sure we have in mind that there are many ways we collaborate and cooperate and try to deal with housing conditions in the district.

You know, that that's if that's the answer, that's the answer.

I'm really interested in the takeaways that the community has from this hearing.

That's important because it's not a few properties, it's many properties that are in trouble, and the tenants are in trouble trying to live there, and so I really want a very clear.

If we know, if we say on an average four months, on an average two years, that helps people understand where they are in the life journey and trying to get relief.

So that was the nature of my my question, uh, as you may already know.

Thank you for that.

I wanted to ask another question about the um how are the um how is the consultancy of the receiver paid?

Is it paid through the fund?

Like Mr.

Slover, how would he be paid?

So the primary source of a receiver's payment is from the owner's resources, so long as the owner's resources exist in any way, shape, or form.

And then as I mentioned earlier, the amendments go to uh mandating certain financial disclosures on the owner's behalf and certain situations if the owner does not pay.

I I read that, and yes.

So, just so uh, as to the use of our funds, there are limited circumstances in which we can use those funds as laid out in the statute.

Uh, but as also previously discussed, there's no money in the fund at this time.

All right, and so then for Mr.

Slover to do his work, what is his salary range in order to get that job done?

I I don't recall Mr.

Slover's hourly rate.

I'm just using him as an example.

Sure.

The receiver.

Sure.

Lots of times, at least from my experience and Miss Mellon, I'm sure is uh experienced in this as well.

It's somewhere in the three to five hundred dollars an hour range for the receiver's expenses that she or he incurs.

All right, and are they expected to work a 40-hour week or a few hours here and there?

They are expected to do what the court has required of them, uh, and according to the timeline that the court has set out in the order appointing the receiver.

Uh and so that's that's gonna vary.

And I'm sure Mr.

Silver would confirm this.

He is is he's involved in a number of different issues.

That's not exclusive to a single receivership.

Yes, I I know, I know, I know I'm well.

Um, so then if um a court order says what a court order say a hundred hours to get this uh HVAC system uh moving forward, remove the water from the property, so it would be that kind of order that would be followed.

It it's certainly uh maybe quite prescriptive in what needs to be done at the property, but it wouldn't have an hour amount associated with it.

I see.

Okay.

Well, thank you.

My time is up.

Thank you.

Thank you, Councilmember Bones.

I have one last question, which has less to do with the bill and trying to understand the life of uh these uh housing problems.

Um, in testimony, it was said under the tenant receiver act, currently landlords can avoid appointment of a receiver merely by proposing an abatement plan, and then there was testimony that uh almost never do they follow through on the abatement plan.

So, what is the thinking here on the part of an owner that they're pretty not taking care of their property but and they're heading toward a receivership and they're just putting it off by pretending to have an abatement plan.

I think in part, Chairman, uh an owner who has been neglectful for an extended period of time knows to some degree the amount of money it's going to cost if a receiver is appointed to rehabilitate the property and bring it up to code.

So I think an owner in part is thinking I can delay that as much as possible while I try to perform my own abatement plan, and perhaps while I'm performing the duties under that plan, I can sell this property and be out from under all of this.

I think that's part of the calculation.

Are they making money while they're not doing any of the repairs?

It depends, but certainly in many circumstances, they're taking in a substantial amount in rent, and that money is not going back into the property the way it needs to.

So that would be making money.

Yes, in some circumstances, absolutely, yes.

So making money while slowly unfortunately, slowly the tenants are suffering.

Um maybe being able to unload the property, buying time to unload the property.

That's correct.

Mr.

Chairman, I can uh just add a couple examples if this helps.

So what we have seen under these abatement plans where owners remain in control or things like unlicensed contractors not paying the contractors, bringing out a mold assessor who is not licensed or does a very surface inspection, our mold assessor comes out later and says, Oh, I found mold in every single unit that that mold assessor passed.

And so I think they're doing if they're doing anything, they're also doing it on the cheap and inappropriately and trying to save money that way.

That's unfortunate.

Uh, I don't have any other questions.

Uh, I think we're good here.

Uh, thank you all for your testimony.

Uh, please uh stay in touch with our office as we work on this legislation.

Thank you.

So I'm gonna close down this hearing.

Uh this has been a hearing on bill twenty six-four ninety-493, strengthening tenant receivership and oversight for neighborhood growth, homes amendment act of Twenty Twenty-five or the Strong Homes amendment act.

The record will be open for two weeks.

That is, it will close at five PM on Tuesday, July twenty-first, two thousand twenty-six.

The time is five thirty-three P.M.

and this hearing is adjourned.