Can I significantly raise the rent in DC?

[Arthur C.]

Hey guys! Hope you all are having a great Friday! I just came across one property in DC that I’m interested in purchasing. However, I was let it be known that the tenant is wanting to stay at the property and refusing to move out if requested by the new owner. The tenant has been living there for more than 40+ years and three family generations have lived in it. So their attachment to the property is clearly very strong. They have been paying $300/mo rent for the entire house, which is well way under the market rent in the DC neighborhood.

My question for you people who are well versed to the DC rent laws, can I buy the property and raise the rent significantly from $300 to $2-2.5K? The market rent in that neighborhood is about $2.9K but I thought $2-2.5K is more appropriate due to the condition of the property. I was planning to buy and renovate then flip it. However, if tenant wants to stay, I am cool with it as long as they pay increases rent from $300 to $2-2.5K per month. It’s my understanding that existing rent cannot increase more than 3.4% (2% plus 1.4% Consumer Price Index). However, after talking with some real estate folks, they said there’s an exception to that rule if the rent is absolutely way under the market rent, which is the case in that scenario. Does anyone know the correct answer to this?

Much appreciated for your time reading this. Enjoy your weekend, guys!

A