An email from VNSTA president Harry Gural to tenant association members
The Van Ness South Tenants Association fought for years to stop Equity Residential from using the "rent concession" scam to overcharge residents. Last week, WJLA-TV Channel 7 aired a news story about the DC Attorney General Karl Racine's big win on behalf of the residents of 3003 Van Ness, which includes $1 million in total restitution for residents who were overcharged.
The Attorney General's office is still working out details about which residents of 3003 Van Ness were overcharged and who will receive restitution. I am in frequent contact with the OAG and will share more information when I have it.
Residents of 3003 Van Ness led the fight against the rent concession scam. Now, we can help finish the battle by alerting the thousands or tens of thousands of other DC residents who collectively may have been overcharged by millions or tens of millions of dollars.
You can help by forwarding this email to your friends and to other renters citywide. And you can join me in demanding that the Bowser administration make a formal public statement about the scam and release records hidden in its archives that would show which major landlords used it to cheat their tenants.
For those who didn't live through the rent concession scam, weren't threatened with huge rent increases, or who didn't have time to follow the battles that ensued, here is what happened:
Equity Residential used fake discounts ("rent concessions") to demand illegal rent increases.
For many years, Equity Residential tricked new residents into signing leases with the "rent" listed as a figure that was hundreds of dollars more per month than the amount the tenant actually would pay. Leasing agents told tenants (falsely) that this was required by law and that that they would receive a "rent concession" -- a supposed discount -- so they rent paid would equal the advertised amount. However, the following year tenants received rent increase notices demanding huge rent increases, sometimes $500 per month or more -- even beyond $1,000. This terrified tenants and forced them to engage in long negotiations with building management, often still ending up with annual rent increases that exceeded the legal maximum of 2% plus inflation for residents under age 62. (For those who would like to learn more interesting details about how the rent scam works, see our companion website FairRentDC.)
Thousands of other Washington renters also may have been overcharged.
The Attorney General's successful suit on behalf of residents of 3003 Van Ness against Equity Residential helped put a final nail in the coffin of the rent concession scam. However, the only DC residents who will receive restitution are those residents of 3003 Van Ness who were overcharged -- renters at other Equity Residential buildings will not be compensated, despite the fact that records gathered by VNSTA under the Freedom of Information Act suggests that those renters also may have been cheated.
Additional evidence suggests that other large landlords also may have used the "rent concession" scam to overcharged DC residents. In fact, the scam may have been widespread. If so, tens of thousands of DC residents may have been overcharged by millions or tens of millions of dollars.
The city has known about this for years and has refused to release information that would help DC renters know whether or not they were being overcharged. The city is required by law to publish a public database of rents. A database would create more transparency in the rental market, and would help restrain rising rents. It also would make it possible to figure out which rental housing providers overcharged their tenants using the "rent concession" scam. However, the Bowser administration repeatedly has failed to produce a database of rents, tilting the scales in favor of the rental housing industry and preventing the public from knowing the full scale of the rent scam.
The Bowser administration repeatedly has refused to help.
Since 2015, I reported the rent concession scam many times to Bowser administration officials, including to the heads of the agencies overseeing housing. I spoke to Mayor Bowser three times in person and I wrote her four formal letters. I explained that thousands of DC renters -- not just residents of 3003 Van Ness -- were getting cheated. I asked her chief of staff (now a deputy mayor) at least to get the mayor to tweet about it to help get the word out. The Bowser administration did nothing.
Important press outlets failed to cover the issue. I told the Washington Post many times about the situation -- reporters and editors showed little interest. WAMU researched the issue and interviewed me, then killed the story before it was aired. The failure to cover the rent concession scam likely cost some of the readers and listeners of those publications a lot of money.
The Washington City Paper ran several good articles, but they got too little attention to alert DC renters that they may have been getting cheated.
The Attorney General's files suit and wins against Equity Residential.
In 2016, I contacted the office of DC Attorney General Karl Racine to complain that Equity Residential was using "rent concessions" to overcharge residents of 3003 Van Ness. The OAG investigated and eventually filed suit against the multi-billion dollar company. The AG cannot file class action suits, so the case focused exclusively on 3003 Van Ness.
The AG's team spent several years litigating the case, fighting an enormous blizzard of motions in court. (I cannot provide a direct link to the case files, but you can search case number 2017-CA-008334-B at DC Superior Court). Attorney General Racine and his team of attorneys eventually won an important victory for residents of 3003 Van Ness, although the decision would have been even stronger if the judge had accepted the obvious fact that Equity knew that its actions were illegal.
The decision in the Attorney General's case against Equity Residential awarded almost $1 million for residents of 3003 who were overcharged, plus another approximately $1 million for attorney fees. The AG's office is still working out plans for figuring out who was wronged and is due restitution. I am in frequent communication with the OAG and will share more information when I have it.
I attempt to fight Equity Residential in administrative court.
Throughout this period, dozens of residents came to me seeking help for avoiding the huge rent increases Equity demanded of them. Many residents were distraught -- fearing that they would have to pay much higher rents or be forced to move on short notice. They also were afraid that if they refused to pay illegal rent increases, that Equity would try to evict them. One resident who refused to pay the illegal rent increase was evicted.
Although I had gotten Equity to agree not to raise my rent over the legal amount, they demanded that I sign another fraudulent lease that stated that the rent was almost $300 higher than the actual amount. I decided to test Equity's willingness to sue tenants for refusing to sign such leases, so I paid the legal rent on my apartment but refused to sign a fraudulent lease with a false amount listed as the rent. Equity sued me in Superior Court -- the first step in an eviction procedure. The Superior Court judge ordered me to pay $297 per month into escrow to protect the financial interests of the $20+ billion Equity Residential Corporation. I have been paying $297 per month for over six years to defend against Equity's frivolous case against me and it's attempt to defend the rent concession scam.
In order to block Equity's legal action against me, I filed a tenant petition in the Office of Administrative Hearings, a low-level court that is supposed to be expert in simple issues like how much the rent can be raised annually. The process in OAH was supposed to be simple enough that tenants could represent themselves without an attorney. In any case, it is very difficult to get an attorney to take a case in OAH because the possible penalties (and profits) are so small. I had no realistic choice but to represent myself against the corporate law firm, Greenstein, DeLorme and Luchs. The courtroom hearings lasted three days. Although the case mostly hinged on the simple question of the definition of the word "rent," the judge ruled against me, taking Equity's position that the "rent" could be hundreds of dollars above the rent actually paid.
To avoid losing thousands of dollars, I was forced to appeal the case to the Rental Housing Commission, which is the appellate body for housing issues. Again, I represented myself because hiring a lawyer could be extremely expensive, but the possible penalties were so low that shelling out for attorneys' fees weren't worth the risk. I took weeks to write another long legal brief.
VNSTA member Gabe Fineman outsmarts Equity's attorneys.
Meanwhile, Gabe Fineman, a former 3003 Van Ness resident and VNSTA board member, was fighting a parallel case in OAH (where he lost) and the Rental Housing Commission, where he won an important victory on appeal. Gabe had been an attorney before he retired, so he was well prepared for his case. Like me, he spent many weeks writing lengthy legal briefs to fight Equity Residential in court.
Gabe found a simple, elegant way to press his case -- he focused exclusively on the meaning of the word "rent." He argued that rent was the amount a tenant paid for the right to live in an apartment -- the common dictionary definition. However, the judge in OAH ruled against him, accepting Equity's fart-fetched interpretation of the word "rent." Gabe appealed to the Rental Housing Commission, spending many more weeks writing legal briefs. In the end it paid off, with the RHC issuing a strong opinion in Gabe's favor, affirming that the word "rent" means exactly what Webster's Dictionary and everyone else says that it means.
Gabe Fineman is a hero of this story -- all past and present residents of 3003 Van Ness, along with tens of thousands of other DC residents, owe him thanks.
Representing myself, I win my case on appeal.
Gabe's case paved the way for me to win my appeal in the Rental Housing Commission. The extremely well-written decision against Equity Residential in my case was another nail in the coffin of the "rent concession" scam. I had my moment of glory as an amateur attorney, winning against an extremely experienced corporate law firm and a $20+ billion corporation. My father, who loved John Grisham novels, would have been proud.
Unfortunately, the Rental Housing Commission sent the case back to the Office of Administrative Hearings for a final decision on certain issues. COVID and other issues have delayed hearings for over two years. I'll share more on the status of the case below.
DC finally passes a law stopping the concession scam.
Meanwhile, Councilmember Anita Bonds, chair of the DC Council Housing Committee, convened a small group of people to hammer out a bill that would put an end to the use of rent concessions. I wanted a bill that simply stated that "rent" in DC law has the standard dictionary definition. Others wanted to "legalize" rent concessions but in a somewhat limited way. We fought over these issues, sometimes in acrimonious sessions, until eventually I quit the working group, telling Councilmember Bonds that I wouldn't support legislation that contained loopholes permitting rent concessions. I thought my idea for simple legislation was over -- but months later I learned that Councilmember Bonds had introduced a simple bill like the one I wanted. The bill passed the DC Council and became law.
By all appearances, by 2021 the "rent concession" scam was over. Gabe Fineman and I had won our appeals in the Rental Housing Commission, Councilmember Bonds had passed legislation decreeing that the word "rent" means rent, and then Attorney General Karl Racine and his staff drove what appeared to be the final stake into the heart of the scam by winning a huge victory against Equity Residential on behalf of the residents of 3003 Van Ness.
Equity Residential continues to overcharge at least one tenant -- and retaliates against him for advocating on behalf of other tenants.
Evidence suggests that Equity Residential has stopped using the rent concession scam to overcharge its customers -- except in one notable case -- mine. Despite Attorney General Karl Racine's successful suit against Equity Residential on behalf of residents of 3003 Van Ness, passage of the law affirming that the word "rent" means the amount you actually pay, Gabe Fineman's legal victory and my legal victory against Equity Residential before the Rental Housing Commission, Equity Residential continues to charge me $297 per month more than is allowed by law. As a result, I have been forced to pay more than $23,000 into escrow at DC Superior Court. I believe that this is clear evidence of retaliation against me for my advocacy on behalf of residents as president of the Van Ness South Tenants Association.
Many DC residents still don't know that they were cheated. It's the Bowser administration's responsibility to tell them.
We can't be certain if other large landlords continue to use the rent concession scam to overcharge their residents. If the Bowser administration had fulfilled its legal duty to publish a database of rents, it would be easier to find out which companies had used the scam against their customers in the past and whether any landlords continue to overcharge their tenants. It is likely that thousands or tens of thousands of residents were caught in the rent concession scam over the years, and that they were overcharged millions or tens of millions of dollars. It is difficult to know for certain, in part because the Bowser administration refused to tell the public about the scam.
Residents of Washington DC should call on the Bowser administration to release information about which large landlords used the rent concession scam to cheat their tenants at which DC apartment buildings. The information resides in the vaults of the Rental Accommodations Division of the Department of Housing and Community Development. The administration likely already knows which large companies were the main practitioners of the scam. Now the mayor should find the courage to admit that her administration refused to defend DC residents against the scam, costing them millions of dollars and driving up the cost of rent in Washington DC.
Please forward this email and help spread the word to renters in every part of the city so they know about the rent concession scam. And please join me in calling on the Bowser administration to make a public statement about the rent concession scam and to provide information about which companies used it to overcharge DC residents.
Harry Gural
President
Van Ness South Tenants Association