The District’s vacant property registration and tax system has undergone three major changes in the past three years. The repeated amending of the law has understandably resulted in significant confusion among property owners, community members, and even government officials.

This guide lays out the latest amendments to the law, as well as provides DCRA's interpretation and guidance on several provisions.

Purposes of the Vacant Property Registration System

The goal of the District’s vacant property annual registration system is twofold.

First, it seeks to create financial disincentives for property owners to leave their buildings vacant rather than putting them back into productive use.

Second, it penalizes those property owners who allow their buildings to fall into such serious disrepair as to become a visual and physical blight on the neighborhood. These types of buildings pose a danger to surrounding neighbors, both through their potentially compromised structural integrity and their potential to attract crime. Blighted buildings can also have a significant adverse impact on the property values of nearby buildings and the morale of the community.

To further these goals, as of October 1, 2010, District law creates two property tax rates for owners of vacant buildings. Vacant buildings ineligible for any exemptions will be classified for tax purposes as Class 3 and taxed by the Office of Tax and Revenue (OTR) at a rate of $5 per every $100 of assessed value. Vacant buildings designated by the Department as blighted will be classified for tax purposes as Class 4 and taxed by OTR at a rate of $10 per every $100 of assessed value.

The Department’s role is to identify buildings that may be vacant, inspect those buildings for code violations, and determine whether a vacant building will be designated as blighted.

Designation of a Building as Vacant

Previously a building was classified as vacant if any dwelling or commercial unit within the building was not “occupied continuously.” For example, if an individual residential condominium unit was unoccupied, it was required by law to register with the Department as vacant. Likewise, if any commercial retail space in an otherwise occupied building was vacant, the property owner needed to register that space as vacant.

Under the new law, to be subject to the registration requirement, the entire building must be vacant; vacant lots are not subject to registration. In order to address concerns about residential buildings being vacant because of residents’ extended vacations, hospital stays, overseas deployments, or owning second homes, vacancy will be determined by the lack of a resident showing an intent to return and occupy the residence.

In determining whether a building is vacant, DCRA must consider whether the building has:

• low or no utilities usage;
• an accumulation of mail;
• a lack of furniture or window coverings;
• open accessibility;
• deferred maintenance, including loose or falling gutters, severe paint chipping, or overgrown grass;
• been the subject of neighbor complaints about the property; and
• been boarded up.

An owner of a vacant building must register the building with DCRA within 30 days after it becomes vacant. In situations where a property owner fails to register a building and DCRA receives a complaint about the building being vacant, a DCRA inspector will visit the property twice within a 45-day period to make a determination of vacancy. Once the vacancy determination has been made, DCRA will mail a registration notice to the vacant building’s owner of record, as listed in the OTR real property tax records.

Registration Fees

Previously, the initial registration fee was $20 for each dwelling unit and $20 for each 400 square feet of commercial space. The renewal registration fee was based on a complicated formula:

• if paid within 30 days of the annual renewal date, the fee was $10;
• if paid after the 30-day grace period, but before the receipt of a deficiency notice, the fee was $20; and
• if paid after the receipt of the deficiency notice, the fee was $60.

As of October 1, 2010, the registration fee is greatly simplified by being set at a flat rate of $250 for both the initial registration and the annual renewal.

Exemptions

Perhaps the most complicated provisions of the vacant property registration system are those governing exemptions from the registration fee and higher property tax rates. The different types and durations of exemptions has led to much uncertainty among property owners and community members.

It is important to note that a vacant building has a permanent exemption if it is owned by the federal government, a foreign government, or their instrumentalities. These vacant buildings neither need to be registered with DCRA, nor have to pay the registration fee.However, vacant buildings owned by the District government or its instrumentalities must be registered, but are exempt from paying the registration fee. No federal, foreign, or District government-owned vacant building is subject to the higher property tax rates.

All other vacant buildings are subject to the registration fees and higher property tax rates unless they qualify for one of the following statutory exemptions: 

First, any building that is “under active construction or undergoing active rehabilitation, renovation, or repair” with a valid building permit that was issued or renewed within a year of the required registration date may claim an exemption Previously, DCRA’s policy was to accept any valid building permit as being sufficient for an exemption. This resulted in a dilapidated, uninhabitable property being issued an exemption if it received a $33 postcard permit for very minor repairs. Additionally, DCRA considered any level of construction to be “active construction.”

As of October 1, DCRA will grant a building permit exemption only if the property owner has obtained the permits required to “make the building fit for occupancy.” In situations where a building is in uninhabitable or dangerous condition, issuance of a building permit solely for minor repairs will no longer be sufficient for the granting of an exemption. The building permits must demonstrate that the owner has an actual, feasible plan to put the building back into productive use.

Additionally, to grant the exemption, DCRA will require that construction be conducted on a regular, ongoing basis. For example, a property where construction activity is occurring infrequently and with limited visible progress will no longer be considered to be “active construction.” Progress will be determined by, among other factors, the type and frequency of construction code inspections requested by the property owner.

Second, an exemption may be granted if a vacant building’s owner or agent has been “actively seeking in good faith” to rent or sell the building.

The time period for this exemption begins to run from the initial listing, offer, or advertisement to rent or sell. For a residential building offered for sale, the exemption is for one year; a commercial building offered for sale has a two year exemption; and any building offered for rent has a one year exemption.

As of October 1, to grant this exemption, DCRA will require the property owner to provide sufficient proof of the vacant building being for rent or sale. Such proof will include:

• A current and valid listing agreement entered into with a District-licensed real estate agent; or
• In cases where the vacant building is being listed for sale or rent by the owner, a public advertisement of the vacant building being for sale or rent, including:
  • A “for sale” or “for rent” sign on the property with the owner’s contact information;
  • A listing on a regional or national property listing service; and
  • Advertisements in a newspaper or an online medium offering the property for rent or for sale.

An owner seeking this exemption may, in some circumstances, be required to show that the property’s listing price is reasonable, as demonstrated by comparable listing prices of other buildings in the surrounding area of similar size, design, and condition.

Third, an exemption may be granted in extraordinary circumstances for substantial undue economic hardship. Such an exemption is issued only on a case-by-case basis and lasts for one year, with the possibility of renewal on the basis of continuing extraordinary circumstances. Previously this exemption period lasted two years. The Department must publish any hardship exemption in the D.C. Register.

Fourth, a vacant building may qualify for an exemption if it is the subject of a probate proceeding or its title is in litigation. This exemption lasts for two years. Sufficient proof for claiming this exemption is a dated and stamped letter of administration from the court with jurisdiction over the legal proceedings.

Fifth, a one-year exemption may be granted if the vacant building is the subject of a pending application for development approval before the Board of Zoning Adjustment, the Zoning Commission, the Commission on Fine Arts, the Historic Preservation Review Board, the Mayor’s Agent for Historic Preservation, or the National Capital Planning Commission. Sufficient proof for claiming this exemption includes a stamped copy of the case filing and the docket or case number. The exemption begins to run as of the filing date of the application.

Finally, as of October 1, two previous exemption categories will be eliminated:

• The one year exemption for buildings rendered uninhabitable due to fire, flood, or other casualty; and
• The four year exemption for newly-constructed buildings that received their certificate of occupancy by August 15, 2006.

Caps on Exemptions

In addition to the individual time periods for each exemption category, there are also cumulative time limits on exemptions.

There is a cap of three real property tax years for any vacant building under the same, substantially similar, or related ownership. For example, if Owner A owns a vacant building and receives exemptions that total three tax years, that vacant building cannot receive any additional exemptions so long as it is owned by Owner A, either directly or in a substantially similar or related ownership manner. If the vacant building is sold to a new owner who has no relation to Owner A, then the new owner would be able to seek an exemption.

There is also a total cumulative time period of five years in any 12-year period for any exemption granted to any vacant building. For example, if a vacant building receives exemptions for two years in a row, then is occupied for four years, then receives another three years of exemptions, it cannot receive any additional exemptions until 12 years have passed from the first exemption it received.

Vacant Building Maintenance Standards

The law requires the owner of any vacant building to adhere to several basic property maintenance standards including:

• Doors, windows and other openings are secured against unauthorized entry;
• The building storm drainage system is functioning properly;
• The interior and exterior are well maintained, structurally sound, and free from debris and garbage;
• The exterior walls are free of holes, graffiti, and loose or rotting materials, and any exposed metal or wood surfaces are protected against decay or rust;
• Any decorative features are safe, anchored, and in good condition;
• Any balconies, metal awnings, stairways, fire escapes, exhaust ducts, and chimneys are anchored, structurally safe, in good condition, and protected against decay or rust;
• Accessory structures such as garages, sheds, and fences are properly maintained; and
• The land around the property is clean, safe, and sanitary.

Failure of a vacant building owner to adhere to these maintenance standards may result in the issuance of citations that can reach up to $2,000 per violation.

Blighted Vacant Buildings

In addition to the vacant building designation and higher Class 3 property tax rate, the law also provides for a “blighted vacant building” designation with an even higher Class 4 property tax rate. It is important to note that a vacant lot cannot be designated as blighted.

A blighted vacant building is a vacant building that has been determined by DCRA to be “unsafe, insanitary, or which is otherwise determined to threaten the health, safety, or general welfare of the community.”

In determining whether a vacant building is blighted, DCRA inspectors may consider:

• Whether the building is the subject of a condemnation proceeding before the Board for the Condemnation of Insanitary Buildings
• Whether the building is boarded up; and
• Whether the building violates several of the building maintenance standards, such as:
• Doors, windows and other openings are secured against unauthorized entry;
• The exterior walls are free of holes, graffiti, and loose or rotting materials, and any exposed metal or wood surfaces are protected against decay or rust; and
• Any balconies, metal awnings, stairways, fire escapes, exhaust ducts, and chimneys are anchored, structurally safe, in good condition, and protected against decay or rust.

Procedurally, a DCRA inspector will visit the vacant building and make an initial determination of blight. That determination is reviewed by the Chief Building Inspector for confirmation or rejection. A notice is then mailed by DCRA to the property owner of record notifying the owner of the blight designation, the grounds for the designation, and the appeals process.

Appeals of a Building’s Blighted or Vacant Designation

An owner whose building has been designated by DCRA as either vacant or blighted has 15 days to seek reconsideration of the designation. An appeals form is available on the DCRA website and the appeal is heard by a senior Department official. DCRA then has 30 days to issue a notice of final determination.

Once a notice of final determination is issued, the owner has 45 days to file an appeal with the Board of Real Property Assessments and Appeals.

Twice a year, DCRA will transmit to OTR a list of all vacant and vacant blighted properties for which notices of final determination have been issued. When OTR mails its semiannual property tax statement, usually in early September and early March, the property will be taxed at either the Class 3 or Class 4 rate.

OTR updates its real property tax online database around the same time that it issues semiannual property tax statements to property owners. A property may have been issued a notice of final determination by DCRA of being vacant or blighted, yet it may not appear on OTR’s online database for several months.

Penalties for Noncompliance with the Vacant Property Registration Requirements

The vacant property law provides several penalties for vacant building owners who fail to comply with either the registration requirements or the building maintenance standards, including criminal prosecutions, civil fines, and orders that the owner make repairs

The law also provides DCRA with the option of requiring any owner of a vacant or blighted building to affix to the vacant building a sign with the name of the building owner and “any other pertinent information” to protect the public health and welfare.

As of October 1, DCRA will be utilizing this option, particularly for buildings designated as blighted and for those vacant buildings that have recurring property maintenance violations that do not rise to the level of blight.

Additionally, as of January 1, 2011, DCRA will no longer accept Special Sign permit applications under subsection 3107.17 of Title 12A of the District of Columbia Municipal Regulations for any property that has been designated as blighted.

This prohibition will include applications for a new Special Sign location under 12A DCMR § 3107.17.7 and applications for Special Sign artwork changes under 12A DCMR § 3107.17.5.

Point of Contact for Vacant Property Registration

For any additional information regarding the vacant property registration system, contact Reuben Pemberton, manager of the DCRA vacant property unit, at vacantproperty@dc.gov.