DC extends its condo bailout to owners who already sold and left
DC extends its condo bailout to owners who already sold and left
2026-09-09 · District of Columbia · Legislation
The District of Columbia has widened its rescue of buyers at one failed condominium to cover people who no longer own a unit there. The River East at Grandview Homeownership Relief and Restoration Amendment Act of 2026 took effect on August 20, 2026, and it is the clearest statement DC has made about what happens when a condominium is built badly enough that the government steps in.1
It is a single-project statute, not general law. But it is the template a future Council would reach for, and it is the only recent DC enactment that puts real money behind construction-defect harm in owner-occupied housing.
What the measure does
The Act amends the Relief for River East at Grandview Condominium Owners Act of 2024, codified at D.C. Code § 42-2081 et seq.
A new class of beneficiary. New § 42-2081(c-1) defines a “Former Property Owner” as “an individual who purchased a condominium unit at the River East at Grandview Condominiums between July 2017 and March 2019 and who no longer owns that unit.” The relief follows the person, not the unit — an unusual choice, and a deliberate one.
Loans become grants. A new section directs the Department of Housing and Community Development to make Property Owners and Former Property Owners eligible for Home Purchase Assistance Program help “in the form of a grant,” to “exclude them from the HPAP program's credit requirements,” and to convert outstanding HPAP loans to grants, with releases recorded in the land records.
Grants up to $50,000. Buyers who purchased without HPAP may receive grants of up to $50,000 toward a principal recast or refinance.
Priority on affordable units, with a shortened covenant. Eligible individuals get priority for Inclusionary Zoning and Affordable Dwelling Unit purchases, with the affordability covenant terminating 15 years after the owner closed on their Grandview unit — measured from the transaction that harmed them, not from the new purchase.
Tax-free. A new § 47-1803.02(a)(2)(BBB) excludes from District income tax, for tax years ending on or before December 31, 2032, income realized from forgiveness of debt under § 42-2083(b) or (c) and from the conversion or forgiveness of an HPAP loan under the new section.2
DHCD must report to the Council annually from September 1, 2027 through fiscal year 2032. The Act sunsets December 31, 2032.
What it tells DC boards about the state's posture
Read as precedent rather than as a program, three features of this statute matter to any DC association dealing with a developer.
The relief runs to owners, not to the association. Nothing in the Act funds the unit owners' association, repairs the building, or supplies the association with a claim. The District chose to make individual purchasers whole and to leave the building's condition where it was. An association reading this as a precedent for its own rescue is reading it wrong.
The remedy is financial, not structural. Debt forgiveness, grants, a shortened affordability covenant and a tax exclusion are all ways of undoing a purchase. None of them is a repair. That is a meaningful signal about what DC is willing to do and what it is not.
It took a named statute. There was no general mechanism to invoke. Relief required the Council to legislate a specific building, twice — in 2024 and again in 2026 — which tells you what an association's odds are of getting the same treatment without a councilmember carrying the bill.
What an association actually has instead
The general-law tools remain what they were, and they are time-limited in a way the Grandview statute was designed to work around.
DC's Condominium Act gives a developer's warranty against structural defects a two-year life measured from conveyance — from conveyance of the unit for a unit, and from conveyance of the first unit or completion of the element, whichever is later, for common elements. The developer posts security equal to a percentage of estimated construction or conversion costs, and DHCD administers claims against it. Miss the window and what is left is a Superior Court breach-of-warranty action.
The operational lesson for a newly turned-over DC board is unglamorous and expensive: commission a structural engineer's report early, in writing, inside the warranty period, whether or not anything looks wrong. The Grandview owners' problem was not that DC lacked a remedy. It was that by the time the scale of the defect was understood, the general remedies had run.
What to watch next
Three things.
The DHCD reports. The first is due September 1, 2027. It will be the first public accounting of how many people took the relief and what it cost — the number that determines whether this is ever done again.
Whether the Council generalizes it. A statute that has now been amended once to widen its class of beneficiaries is a statute the Council is still thinking about. The step from a named-building act to a standing fund is the one to watch for.
The building itself. The Act does not repair River East at Grandview and does not fund its association to do so. Whatever happens to the structure happens through the ordinary channels — the association's own reserves, a special assessment, warranty security, or litigation.
Related District of Columbia HOA Topics
Stay on top of District of Columbia HOA law
Every week: new District of Columbia legislation, court rulings, and regulatory developments affecting condos, planned communities, and property managers. Free.
No spam. Unsubscribe anytime.