Washington D.C. Commercial Lease Protection Law | Scope, Term, and Legal Effect

The protection applies when:

• The leased space is used primarily for commercial purposes.
• The tenant has a valid business license or tax registration.
• The total security deposit or prepaid rent does not exceed the threshold defined under D.C. regulations (commonly $5,000–$7,500 for small retail units).

While some leases above these amounts may not be automatically protected under D.C. Code § 42-3501, general contract law still governs their enforcement.

If the lease does not specify a duration or states less than one year, D.C. law presumes a default one-year term. However, tenants can assert shorter terms if agreed upon in writing.

Tenants have the right to request lease renewal within 6 to 1 months prior to expiration, as long as the cumulative lease period does not exceed 10 years. The landlord may only deny renewal for legally valid reasons, such as:

• Repeated nonpayment (e.g., three or more times within a 12-month period)
• Fraudulent conduct or misrepresentation during lease execution
• Unauthorized subleasing or property damage
• Condemnation or destruction of the premises

If a tenant has properly registered their business and complied with notice requirements, they can remain in the property—even if ownership changes or foreclosure occurs. This legal "tenant in possession" principle is reinforced through court precedents and D.C. Code § 42–3505.

Landlords cannot arbitrarily increase rent or deposits. Typically, rent increases are limited to 5% annually unless otherwise stated and justified. For converting a portion of the deposit into monthly rent, the cap is tied to prevailing interest rates, not exceeding 12% per annum.

[Table: Maximum Protected Security Deposit Thresholds in Washington D.C.]

Tenants are granted priority rights in bankruptcy or foreclosure proceedings. For example, tenants with "small deposit status" (typically under $2,000) receive preferential reimbursement under D.C. Code § 42–3505.01.

The Leasehold Registration Order allows tenants to record their lease interest, thereby asserting legal rights to remain in possession and be prioritized in disputes.

Leases must include:

• Legal identity of both parties
• Description of the commercial space
• Rent, deposit, and payment methods
• Lease duration and use clause
• Early termination clauses
• Maintenance and repair responsibilities
• Rights to assign or sublease
• Dispute resolution methods
• Broker commissions and disclosures

If the landlord fails to provide termination or rent adjustment notice 6 to 1 months prior to lease end, the contract automatically renews for one year. This protects tenants from sudden evictions and rent shocks.

The D.C. Office of Administrative Hearings and the Department of Housing and Community Development (DHCD) operate mediation services for the following disputes:

• Rent increase challenges
• Maintenance and repair conflicts
• Security deposit recovery
• Eviction defense
• Broker commission disagreements

Once submitted, the dispute is reviewed by a neutral panel, and binding recommendations are issued if both parties consent.