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Karl A. Racine
Office of the Attorney General for the District of Columbia
 

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Attorney General Racine Sues Company that Offers Rent-Controlled Apartments as Hotel Rooms

Tuesday, April 25, 2017
Complaint Alleges Affordable Units Prevented from Being Available to District Residents

Contact:
Rob Marus, Communications Director: (202) 724-5646; [email protected]
Marrisa Geller, Public Affairs Specialist: (202) 724-5448; [email protected]


WASHINGTON, D. C. – Attorney General Karl A. Racine announced today that the Office of the Attorney General (OAG) Office of Consumer Protection has filed a lawsuit against a company that operates apartments like hotel rooms, including some apartments that are rent-controlled. The complaint also includes the owners and managers of four apartment complexes that are involved.

The OAG Office of Consumer Protection filed a complaint against Ginosi USA Corporation; its owner, Eric Ginosian; and the owners and managers of four apartment complexes in the District: Daro Management Services, LLC; Daro Realty, LLC; Greystar Real Estate Partners, LLC; T-C Mass Court, LLC; Mill Creek Residential Trust LLC; and John Hancock Life Insurance Company USA.

“My office is using all of the tools available to us to preserve affordable housing for District residents,” said Attorney General Racine. “We will aggressively pursue individuals and companies that seek to circumvent the District’s rent-control laws, and we are actively investigating other instances where apartment managers or owners are treating rent-controlled apartments like hotel rooms and renting them out on sharing-economy platforms.”

Ginosi USA allegedly offers short-term rentals and other hotel-like services in connection with some of the units in apartment buildings -- a violation of the District’s Rental Housing Act and the licensing requirements put in place to regulate hotels. Ginosi also allegedly collects sales taxes from guests but fails to remit them to the District.

At Least Two of Four Sued Properties Subject to Rent Control Law
At least two of the four properties that are the focus of the District’s lawsuit are subject to the District’s rent control law and are allegedly being rented to visitors on a short-term basis for amounts that greatly exceed the rent that can be lawfully charged for the units. Additionally, long-term renters who lawfully lease apartments in the buildings are allegedly misled when they are not informed that large portions of their buildings will be operated like hotels.

Suit Seeks Recoveries, Stop to Unlawful Rentals
Attorney General Racine is seeking to stop the alleged illegal activity, which reduces the supply of affordable apartments available to District residents, and to recover unpaid taxes, restitution, penalties and costs from the defendants.

The lawsuit alleges that the following apartment properties in the District were illegally operated like hotels:

  • 1421 Massachusetts Avenue NW (known as the Phoenix);
  • 1911 R Street NW (known as the Rodney);
  • 300 Massachusetts Avenue NW (known as Mass Court); and
  • 1100 6th Street SW (known as the View at Waterfront).

A copy of the complaint and associated documents is available here.

Consumers who have complaints concerning Ginosi rentals or other short term rentals may contact OAG’s Office of Consumer Protection at (202) 442-9828.