Amnesty for D.C. condo buildings with out-of-date registrations ends Feb. 29
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Version 0 of 1. Amnesty, in the minds of many, is politically incorrect. But it could be good news for many condo s and businesses in the District. The Department of Consumer and Regulatory Affairs (DCRA) has introduced an amnesty program, extending through the end of the month, allowing associations and businesses to come into full compliance with agency rules without penalty. That could save entities hundreds or thousands of dollars in fines and court fees. To legally transact business here, a business or association based in the District must register with DCRA. Once registered, the entity must file a status report every two years. Additionally, most businesses are required to obtain a “basic business license.” Unfortunately, businesses — especially small corporations, and condominium and cooperative associations — often forget to renew their status. Most corporations have a local resident serve as registered agent. That person is tasked with receiving the notice for filing the two-year report and making sure the corporation is up to date. And when someone files a lawsuit against a business, the agent is usually served with the complaint. [More Kass: When it’s condo board v. delinquent owner: The legal options for both sides] However, especially with cooperative associations, registration is a low priority. Typically, when a condominium is created, the developer registers the association and selects the registered agent. But when a transition occurs and the condo residents take over, all too often, no one knows about the requirement for registration and a registered agent. A business or association with an expired basic business license or a corporate registration revoked for non-filing can become fully compliant by submitting all past due biennial reports with the accompanying late fees. This can range from $50 to $100 for every year the business was not registered. This can be a lot of money, depending on how many years the registration has lapsed. According to DCRA, the amnesty program “provides business owners a unique opportunity to come into compliance with District regulations and requirements without facing associated fines or penalties accrued due to failure to obtain or renew a business license, corporate, or weights and measure device registration.” However, DCRA added that “notice of infractions will be excluded from this program and will not be reversed.” What are the consequences of not registering or not obtaining a business license? If you are a home improvement contractor without a home improvement contractor license, you may be required to refund your customers all of the money you received for work done, regardless of the quality of your work. [More Kass: What’s wrong with D.C. condo owner bill of rights?] If you are not registered or have not updated your registered agent, you may not be able to respond to a lawsuit filed against you, and this could be costly. If notice of the lawsuit does not reach you because the plaintiff sent it to the registered agent of record and that person is no longer working with you, the court might issue a default judgment and grant the plaintiff’s request for monetary damages because of your failure to file an answer in your defense. According to D.C. law, if a business license or corporate status has been revoked, the entity that was covered by that license cannot continue conducting business other than for the purpose of “winding up its activities.” Moreover, it can be hit with fines and penalties for noncompliance with District law. The amnesty program will end Feb. 29. All entities — community associations included — should confirm that they are properly registered. Many landlords do not know that they need to have business licenses. While the amnesty will not be available to any entity that has never been registered, this is a reminder that everyone doing business in Washington should be sure of being legally entitled to operate. Benny L. Kass is a Washington and Maryland lawyer. This column is not legal advice and should not be acted upon without obtaining legal counsel. For a free copy of the booklet “A Guide to Settlement on Your New Home,” send a self-addressed, stamped envelope to Benny L. Kass, 1050 17th St. NW, Suite 1100, Washington, D.C. 20036. |