2021 Legislative Session Bill Summaries

The hectic 2021 virtual legislative session has finally come to an end. We must now take a step back and take a look at the plethora of bills that were proposed and the few of them that passed this year. We had some huge wins this session thanks to the dedicated advocacy efforts by our members and the Rental Housing Coalition. We cannot thank those of you who joined us in the fight to defend your rights as housing providers enough. Many of the bills that we opposed this year died. Those that did pass, we were able to compromise and get many of the things that we needed to make sure that you could continue functioning as housing providers in Washington State.

We held a Legislative Session Recap Event on April 27, with our lobbyists Chester Baldwin and Jim Henderson. They walked us through the bills that were proposed and what happened to each one. For those who were unable to join us for this event, the recording and the presentation materials used can be found by clicking on the button below.

Stay tuned for upcoming education courses on how the new law changes will effect your business and operations. Please reach out to me at arobertson@RHAwa.org if you have any questions.

SESSION RECAP EVENT

HB 1236 – Just Cause Termination and Mandatory Lease Renewal

1. Add definitions for immediate family, subsidized housing and transitional housing. Adds “lease” to definition of rental agreement.
2. Can only terminate a tenancy for one of the 16 defined reasons. (Listed Below)
3. Provides exceptions to Just Cause (Detailed Below)
4. Landlord deliberately uses a rental agreement containing provisions known to be prohibited, statutory damages not to exceed two times the monthly rent, cost of suit and reasonable attorneys’ fees.

Exceptions to Just Cause

• Allows an initial lease term of 6-12 months to be terminated with 60 days’ notice without cause.
• Allows an initial lease term of 12 months or more to be renewed with extension of 6 months or more to be terminated with 60 days’ notice without cause.
• Any lease that is on a month-to-month or periodic tenancy that converted to a lease with a term of 6 month or more within three months after the moratorium expires will be treated as the initial lease for the purposes of the exceptions.
• All other tenancy may be terminated with one of 16 causes.

Just Causes by notice period: 

3 Days: 

• Tenant causing waste, nuisance, or unlawful activity and unreasonable interference with enjoyment of the premises.

10 Days: 

• Tenant fails to comply with a material term of the rental agreement within 10 days of receiving a notice to comply or vacate.

14 Days: 

• Tenant fails to pay rent within 14 days of receiving a notice to pay rent or vacate.

20 Days: 

• Owner or lessor shares the dwelling unit with the tenant (no cause needed).
  
• Tenant commits acts of sexual harassment directed at housing providers or another tenant based on the person’s race, gender, or other protected status in violation of any covenant or term in the lease.

30 Days: 

• Premises condemned and continued habitation would subject the housing provider to civil or criminal penalties.
• Tenant fails to sign a new rental agreement with reasonable terms offered at least 30 days prior to the expiration of the current term rental agreement.
• Tenant is no longer eligible for transitional housing program.
• Intentional, knowing, and material misrepresentations or omissions made on the tenant's application that would have led to an adverse action.

60 Days: 

• Tenant is required to register as a sex offender during tenancy or failed to disclose if required at the beginning of tenancy.
• Tenant committed four or more substantial violations in a twelve-month period, each leading to the housing provider properly serving a 10-day comply or vacate notice.
• Other good cause constituting a legitimate economic or business reason. Court may stay writ of restitution for up to 60 additional days based on tenant circumstances.

90 Days: 

• Owner or immediate family needs to occupy the unit and no substantially equivalent unit is available in the same building. Owner/family must occupy the unit at least 60 consecutive days during the 90 days immediately after the tenant vacated.
• Owner elects to sell a single-family residence. Owner must make reasonable attempts to sell within 30 days of the tenant vacating.

120 Days: 

• Owner elects to demolish or substantially rehabilitate the property, change its use or convert apartments to condominiums.

STATUS: Delivered to Governor on 4/19/21

SB 5160 – ERP and Right to Counsel

1. Landlord may not charge late fees or other charges for nonpayment of rent between March 1, 2020 and six months following expiration of the eviction moratorium.
2. Landlord may not take adverse action for nonpayment of rent between March 1, 2020 and six months after the moratorium expires.
3. Landlord may not report to a prospective landlord; March 1, 2020 and rent and six months after the eviction moratorium expires; unpaid rent and unlawful detainer filed for nonpayment of rent.
4. Landlord required to offer a repayment plan equal to 1/3 of the monthly rent due between March 1, 2020 and six months after the moratorium expires.
   1. First payment cannot be due for 30 days. Payment plan is for rent only, no other fees or charges.
   2. Tenant who refuses or fails to respond to offer of a repayment plan within 14 days, landlord may proceed with an unlawful detainer.
   3. Tenant defaults on repayment plan, landlord may apply for reimbursement from the landlord mitigation fund or proceed with an unlawful detainer.
5. Landlord mitigation fund: $15,000 in unpaid rent accrued between March 1, 2020 and six months after the moratorium expires.
   1. Voluntarily vacated or abandoned the tenancy.
   2. Default on repayment plan.
6. Right to Counsel for an indigent tenant at any show cause hearing or trial.
7. Eviction Resolution Pilot Program (ERP) Required to be used for nonpayment of rent cases.
8. July 1, 2022 – July 1, 2023, court must provide report to legislature.
9. Changes to 14-day notice and Summons.
10. Adds new language about ERP and DRC
11. For one year after the moratorium expires, tenant may reinstate tenancy with payment through the LMF.
    1. When tenancy is reinstated through the LMF, landlord may receive up to three months of prospective rent.
12. End of Proclamation 20-19.6 on June 30, 2021.

STATUS: Signed by Governor – Effective date 4/22/21

HB 1332 / SB 5402 – Property Tax Deferral

• Suspends interest and penalties on property tax payments during the Coronavirus Disease 2019 (COVID-19) state of emergency and for 12 months thereafter.
• Directs that county treasures to grant a deferral of property tax payments normally due in April 2021.
• Establishes the COVID-19 Property Tax Deferral Loan Account.
• Allows cities and counties to apply for loans from the COVID-19 Property Tax Deferral Loan Account.

STATUS HB: Delivered to the Governor

STATUS SB: DEAD - Senate Ways & Means Committee

HB 1189 / SB 5211 – Tax Increment Financing

• Authorizes local governments to designate tax increment financing areas and to use increased local property tax collections to fund public improvements
• A local government designating a TIF area may issue general obligation bonds to finance the public improvements. Any increase in assessed value within an area is included in the add-ons for purposes of the 1% revenue growth limit calculation.
• Each taxing district shall receive that portion of its regular property taxes produced by the rate of tax levied by the taxing district on the tax allocation base value for that TIF project in the taxing district.

STATUS HB: Delivered to the Governor

STATUS SB: DEAD – Senate Rules Committee

SB 5287 – Multi-Family Tax Exemption

• Temporarily expands the MultiFamily Property Tax Exemption (MFTE) program to all cities for the 12- year MFTE and the 20- year exemption for permanently affordable homes.
• Authorizes a 12-year extension of existing 8-year and 12-year MFTE that are set to expire if they commit to rent or sell at least 20 percent of the housing units to low-income households.
• 8-year exemption requires 20% of units to be affordable (<80% AMI)
• 12-year exemption requires 20% of units to be affordable (<80% AMI)
• Establishes a new 20-year property tax exemption for the creation of permanently affordable homes. 
• Properties that sell or rent 25 percent of the units to non-profit organizations or local governments that assure permanently affordable homeownership.
• Permanently affordable homeownership units must be sold to households earning no more than 80% of the local AMI.

STATUS SB: Delivered to the Governor

HB 1083 – Removing Relocation Assistance for Tenants’ Homes

• Increases the maximum amount eligible tenants may receive in relocation assistance under the Mobile Home Relocation Assistance Program at park closing.
1. Multi-section Homes – Increases relocation from $12,000 to $17,000
2. Single-section Homes – Increases relocation from $7,500 to $11,000
• Requires tenants who receive initial cash assistance under the Relocation Assistance Program to transfer title of the home to the park-owner, relocate the home, or demolish and dispose of the home within 90 days to receive the remainder of eligible relocation assistance.
• If tenant does not relocate or demolish home within 90 days, park-owners may seek reimbursement for costs of demolition or disposal:
1. $4,000 for a multi-section home; and $2,500 for a single-section home;
2. If costs incurred for demolition or disposal are greater, an additional $4,000 for a multi-section home; and $2,500 for a single-section homes is available.

STATUS: Governor Signed – Effective date 7/25/2021

HB 1277 – Document Recording Fee for Housing and Rental Assistance

• Creates the Eviction Prevention Rental Assistance Program in the Department of Commerce.
• Increases the document recording fee by $100 surcharge to fund various housing services, including:
• 5% to “Affordable Housing for All” Account
• 2% to Landlord Mitigation Fund (LLMF)
• Remainder to “Home Security Fund” with majority to “Eviction Prevention Rental Assistance Fund”
• Creates an annual report to look at the spending from the fee increase and determine whether adjustments are necessary.

STATUS: Delivered to the Governor

SB 5139 – Rent Control

• Establishes Rent Control in WA State
• Prohibits a housing provider from increasing rent or other charges for the first 6 months after the end of the Governor’s emergency eviction ban under 59.18. 
• After the first 6 months expire, housing providers are then limited to only increasing rent by 3% over the previous year’s consumer price index, for a subsequent six months, based on the rental rate as it was on March 1, 2020.

STATUS: DEAD – Senate Housing & Local Government Committee

HB 1228 – Ending Eviction Moratorium & Providing Rental Assistance for COVID-19

• Ends any eviction moratorium currently in effect.
• Requires landlords to provide tenants with an affidavit of COVID hardship, notice of early resolution program, and option of payment plan.
• Provides $600 million in rental assistance through the Emergency Rental Assistance Grant Program to assist tenants and landlords with past due rental payments
• Establishes the Early Resolution Program (ERP) to facilitate resolution of nonpayment of rent cases through Dispute Resolution Centers or third-party facilitators.
• Requires landlords to notify tenants of the early resolution program before filing any unlawful detainer action.

STATUS HB: DEAD – House Housing, Human Services & Veterans Committee

HB 1494 / HJR 4204 – Split Roll Property Tax & Constitutional Amendment

• Creates Split roll property tax by giving exemption for primary residence that must be recouped by property taxes from other properties.
• Created tax exemption for principal residences up to $250,000 of assessed value.
• The Washington Constitution requires all taxes to be applied uniformly on property within each taxing district.  The Constitution also limits regular property tax levies to a maximum of 1% of a property's assessed value.
• HJR 4204 – Creates a Constitutional Amendment to get around the “Uniformity Clause” in the WA Constitution.

STATUS HB: DEAD – House Appropriations Committee

HB 1100 – Forced Right of First Refusal

• It unfairly discriminates against just one type of real estate and housing without any data to support this. If enacted, it would likely constitute an unconstitutional taking.
• This bill would harm residents by creating “false alarms”; a sale does not necessarily mean a community is closing. By far, most sales occur with the new owners intending to continue as an MHC. Any legislation must be limited to when a community owner voluntarily lists their community with a broker.
• Our Supreme Court has previously stated that a MH community closure “does not breach any of [the residents] legal rights or entitlements.”

STATUS: DEAD – House Appropriations Committee

SB 5079 – 3-Year Park Closure Notice

• Most parks that are closing are being redeveloped into sites that serve many more housing units to support our communities. The legislature should encourage redevelopment of aging low-density housing to house more WA families. 
• If enacted as written, it would likely constitute an Unconstitutional taking – likely why the legislative has stopped this effort for many years. It unfairly discriminates against just one type of real estate and housing.  
• It stifles the addition of new housing to our region – when the legislature has already authorized the Department of Commerce to look at expanding opportunities.
• A commercial purchaser is not going to wait 3 years. If enacted, this bill could effectively impair the appraisal value of all MHC real property instantly.

STATUS SB: DEAD – Senate Rules Committee

SB 5319 – Forced Right of First Refusal for Senior Communities

• There is no clear definition of what constitutes a “bona fide offer.”  This could open the door to fraud and abuse. 
• This bill would harm residents by creating “false alarms”; a sale does not necessarily mean a community is closing. By far, most sales occur with the new owners intending to continue as an MHC. Any legislation must abe limited to when a community owner voluntarily lists their community with a broker.
• This bill is unworkable and unfairly discriminates against just one type of real estate and housing making these transactions almost impossible with the timeline.
• This bill does not protect against harmful, rights-violating activity, but rather damages, or appropriates, property for the benefit of others.
• If enacted as written, it would likely constitute an unconstitutional taking
• Our Supreme Court has previously stated that a MH community closure “does not breach any of [the residents] legal rights or entitlements.”

STATUS SB: DEAD – Senate Housing & Local Government Committee

SB 5096 / HB 1496 – Capital Gains

• Imposes a 7% Capital Gains Tax (CGT) beginning January 1, 2022 on the sale or other voluntary exchange of long-term capital assets by individuals.
• The first $250,000 of capital gains are excluded from the state CGT.
• All taxpayers must file with the state Department of Revenue (DOR), but a person with no tax liability is not required to file a tax return.
• A deduction for the sale of a qualified family-owned small business (under $10M in annual revenue) where the owner has materially participated for 5 of the past 8 years.

STATUS HB: DEAD – House Finance Committee

STATUS SB: Delivered to the Governor

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