B24-1138 — Condominium Warranty Claims Clarification Temporary Amendment Act of 2022

2ENGROSSED _____________________________ORIGINAL Councilmember Anita Bonds 5 A BILL 73 __________24-1138 95 IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 7 ____________________ 9 To amend, on a temporary basis, the Condominium Act of 1976 to clarify standards and procedures governing the resolution of a claim filed upon a condominium developer’s warranty against structural defects;

“(a-1)(1) The failure to comply with the applicable building code in effect at the timetimeof ofENGROSSED ORIGINAL construction shall create a rebuttable presumption that an affected component of a unit or common area falls below standards commonly accepted in the real estate market if:

“(e)(1)(A) At the time that the condominium registration order is issued by the Mayor the declarant shall post with the Mayor a warranty security payment in the form of a bond,letter of credit, or any other form of security the Mayor may approve in the amount of 10% ofofthe the estimated hard construction and conversion costs, including labor and materials, to satisfysatisfycosts costsENGROSSED ORIGINAL that arise from a declarant’s failure to fulfill the requirements of this section.

In the event that the actual hard construction and conversion costs, including labor and materials, as of the time of substantial completion of the condominium, as certified by the project architect, exceeds the previously estimated costs by more than 10%, the declarant shall post an additional bond, letter of credit, or other form of warranty security in the amount of 20% of the difference between the estimated hard construction and conversion costs, including labor and materials, and ENGROSSED ORIGINAL the actual hard construction and conversion costs, including labor and materials, as of project substantial completion, as certified by the project architect.

79 “(3)(A) The bond, letter of credit, or other form of warranty security may be reduced at the declarant’s request in pro rata segments beginning 2 years after the conveyance of each unit, based on the residential unit’s percentage interest in the residential portion of the condominium;

ENGROSSED ORIGINAL “(B) Pro rata segments shall be based on the residential unit’s percentage interest in the residential portion of the condominium.

or “(B) The residential condominium units’ pro rata share of those portions ENGROSSED ORIGINAL of the project directly supporting, enclosing, or servicing the residential condominium.

“(C) A declarant shall file with the Mayor a written respotoarestoase structural defect claim filed with the Mayor within 30 calendar days of receipt of a copy of the claim.

ENGROSSED ORIGINAL “(ii) The Mayor’s determination that the structural defect claim is not perfected in a previous instance will have no bearing on any other current or future claim by a unit owner or the unit owners’ association based on additional or different information.

ENGROSSED ORIGINAL “(H) If a unit owners association or unit owner files suit in a court of competent jurisdiction for a breach of the warranties created by this section, the prevailing party shall be entitled to an award of reasonable attorneys fees and costs as may be determined by the court.

ENGROSSED ORIGINAL “(1) A written agreement between the declarant and claimant regarding the release of the warranty security in satisfaction of the claim, approved by the Mayor, “(2) An order issued by the Mayor pursuant to subsection (e)(7)(F) of this section, “(3) An order of the Office of Administrative Hearings issued following an appeal under subsection (e)(7)(G) of this section;

ENGROSSED ORIGINAL (8) A new subsection (j) is added to read as follows:

ENGROSSED ORIGINAL “(A) Reduces the stability or safety of the unit or common elements below standards commonly accepted in the real estate market;

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