The unit is the lot
When a building is converted to condominium, the original lot is retired and each unit gets a new lot number of its own, usually in the 2000 series. OTR assesses each unit separately, bills each unit separately, and assigns each unit its own tax class. The rate in §47-813 applies lot by lot. So when DOB designates a property vacant, the property is the lot, and for a condo the lot is your front door. Unit 2004 can sit in Class 3 at $5.00 per $100 while units 2001 through 2003 stay in Class 1 at $0.85. On a $500,000 unit, that is $12,500 for the half year instead of about $2,125, and the neighbors never see it.
The comparison that helps is the rental building across the street. A twelve unit apartment building on one lot with eleven tenants and one empty apartment is an occupied building. Someone lives in it. The empty apartment is a turnover, and the rental turnover article covers the clock on that. Split the same building into twelve condos and the empty one is a vacant lot standing alone, with nothing the other eleven can do to shield it.
How an inspector decides a fourth floor unit is empty
Nobody walks the hallways of every condo building in the District. Most condo designations start with a report: a neighbor tired of a package pile outside the door, a board member who has watched a unit sit dark for a year, a management company that has not been able to reach the owner about a leak. The list article describes how properties end up on the list. From there the inspector works with what can be seen: a door with a notice still taped to it from last spring, a mailbox the front desk has taped shut, a balcony with nothing on it, windows with no blinds in a building where every other window has them, and whatever the front desk says when asked.
The inspector's file then goes to the same timelineas a rowhouse: a notice to the unit's owner of record, a 15 day response window, a determination, a handoff to OTR, and a half year bill. Condo owners get caught by the notice more often than house owners because the OTR mailing address for an investor unit is frequently the unit itself, and the letter goes into the mailbox that is taped shut. The owner of record article shows the field to fix.
What the association can and cannot do
The association does not control your tax class and cannot make the designation go away. It can hurt or help at the edges. Rental restrictions in the bylaws matter most: if the association caps rentals or bans them for the first year of ownership, the for rent exemption on the exemption form, which requires a licensed unit listed at market rent, may not be available to you. Read the bylaws before you plan on it. On the helpful side, the front desk log, the fob entry records and the management company's contact history are excellent evidence of occupancy, or of the date a tenant moved in, and most managers will produce them for an owner who asks.
Condo fees do not stop when the unit is designated, and neither does the mortgage. An owner paying fees, a mortgage and a Class 3 half on an empty unit is paying for three things and living in none of them. That math usually settles the question of whether to rent the unit.
Which exemptions fit a condo unit
The same categories apply as for any other lot, and the same 5 in 12 cap on the property. The ones we see used for units are the for sale exemption for an owner who has listed with a licensed agent, the for rent exemption for a licensed rental listed in good faith, probate for an inherited unit, and construction for a unit under a real permit. The construction exemption is thinner protection in a condo than in a house, because the inspector cannot see the work from the sidewalk and will ask for permit inspection records instead. A unit an owner simply stopped using, the pied a terre or the unit kept for a child who moved away, fits none of the categories and needs a resident. Our owner away article lists the arrangements in order of strength.
Insurance and the empty unit
An HO6 policy on a condo unit carries the same vacancy clause as a homeowner policy on a house, and it narrows on the same schedule. The insurance articlecovers what changes. In a condo the exposure runs both directions: a frozen pipe in an unheated empty unit damages the unit below, and the association's master policy will look to your carrier. Keep the heat on and tell your carrier the unit is empty.
The order to fix a designated unit
- Pull the OTR account for your unit's own lot number and confirm the class and the mailing address. Fix the mailing address the same day.
- Check the DOB list for the unit by address and unit number. If the notice date is within 15 days, file the response form with whatever occupancy evidence exists.
- Decide the occupancy plan: move in, a tenant with a basic business license, or a listing under the for sale exemption. Check the bylaws before choosing the rental route.
- Ask management for the entry log and contact history for the period in question, and keep them with your utility bills.
- Pay the current half on time so nothing reaches the tax sale, then correct the designation and claim the refund for each half billed while the unit was occupied or qualified for an exemption.
If you would rather hand it off, send us the address and unit number. We read the DOB record and the OTR account for the unit's lot at no charge and tell you which halves can be corrected. Correction work is a flat $1,500 per tax period corrected, paid up front, and refunded in full for any period OTR does not correct.