front page - search - community

DCRA in disarray
Graham: Agency has lost sight of mission
(Published March 7, 2005)

By KATHRYN SINZINGER
Staff Writer

The D.C. government agency responsible for protecting citizens against fraud and abuse has routinely allowed non-lawyers to issue legal interpretations of city rental laws that have been relied upon by landlords and judges to deny thousands of tenants their right of first refusal to purchase their homes.

"A very cozy relationship has developed between those who regulate and those who are regulated. …The department has lost sight of its mission -- to protect citizens," Councilman Jim Graham charged March 4 during an oversight hearing into longstanding disarray at the D.C. Department of Consumer and Regulatory Affairs.

Patrick Canavan, who was appointed about six weeks ago to replace David Clarke as the department's director, testified under oath before the D.C. City Council Committee on Consumer and Regulatory Affairs that he has halted the practice of non-lawyers issuing legal opinions and is investigating what actions the agency should take to correct the situation.

Canavan and Julie Lee, the agency's chief lawyer since January 2004, both refused under intense questioning to detail their actions after they said they became "concerned" about the practice. Testifying under oath, an unusual practice before the council, Lee repeatedly told committee Chairman Graham that she had "counseled my client," referring to the public agency and its former director, but she refused to publicly disclose what legal advice she offered to those public officials.

"You're not ensconced somewhere where we can't ask you questions … and you are defying answering questions about your performance," Graham lectured Lee at one point during her testimony.

Lee testified that "no statutory authority, to my knowledge" exists for DCRA to have issued letters that allowed landlords to evade offering their tenants a first right of refusal to purchase their homes before they were sold.

Graham noted that most of the letters appear to have been issued by DCRA in response to requests from one law firm, which he identified as Greenstein, Delorme & Luchs. In a Nov. 3, 2003, story about the controversial 95/5 partial sales, The Common Denominator quoted attorney Richard Luchs of that D.C. law firm as taking credit for creating the complicated real estate transactions to sidestep tenants' rights under the Rental Housing Conversion and Sale Act.

Canavan took administrative action to stop issuance of more such letters at the urging of Graham after testimony at a Feb. 16 public hearing revealed that more than 100 such written legal interpretations have been issued since 1998. The exact number of letters issued is unclear, because DCRA officials testified that the agency has routinely "purged," or destroyed, documents at routine intervals during the past few years.

The so-called "95/5" letters have permitted landlords to transfer ownership of apartment buildings to new owners through a series of partial sales by showing that the city regulatory agency does not consider these transactions to be a "sale" of the properties. Sale of the properties would have triggered a section of D.C. rental laws that requires tenants to be given the first right of refusal to purchase their home before it is sold.

A partial review of the 95/5 letters by Graham's committee found what Graham described as a consistent pattern of the regulatory agency simply retyping letters that were drafted by landlords' attorneys onto government letterhead.

Graham has urged DCRA to rescind the letters previously issued by the agency, some of which have been relied upon by judges in court cases to deny tenants their rights under D.C. law.