An article which appeared in last Saturday’s Tacoma News Tribune highlighting new landlord-tenant laws included several assertions by tenant advocates claiming that landlords are intentionally attempting to remove protections granted to them under the new law. To set the record straight, rental housing industry experts negotiated all changes to the RLTA in good faith.
Any new law or change to an existing law necessitates an adjustment period to better understand the unintended consequences to both tenants and landlords. This helps both parties learn and adjust to the effects resulting from changes to the law or from the business practices on those in which the law applies.
In late July, the most significant changes to Washington’s Residential Landlord Tenant Act (RLTA) since its inception in 1973 went into effect.
Under the new law, tenants are provided a substantially longer period to pay their rent – 14 days to pay rent or vacate, up from 3 prior to July 28, 2019. Most of the time, property managers and landlords, whether managing a 100-unit building or a single-family home, have offered a 3 to 5 day grace period beyond the rent due date before issuing “Pay or Vacate” notices to tenants. In fact, many lease agreements have a grace period written into them as a specified term of the contract itself.
With the changes to the RLTA now in effect, tenants have until at least the 15th of the month to pay past-due rent before a manager or landlord can begin eviction proceedings to regain control of a rental property. Under the new law, the grace period is baked into the pay-or-vacate period of 14-days so that a grace period is always provided. This point was agreed upon and understood by all parties, including tenant advocates, who negotiated this law.
During the legislative session, lawmakers raised concern over the substantial increase in the notice period and the potential that landlords will immediately issue a fourteen-day notice as opposed to working with the tenant. In fact, we advocated for a solution which would have mandated a 5 day grace period, with a 10 Day Pay or Vacate Notice following thereafter. Other stakeholders in this process would not agree to that proposal even though it would result in less pay or vacate notices being served.
Tenant advocates did not see service of a pay or vacate notice as a bad thing, however. In fact, the lead negotiator for tenant advocates and author of the legislation, Edmund Witter, the managing attorney for the King County Bar Association's Housing Justice Project, felt this was a reasonable outcome, saying “as somebody who represents tenants, who sees a lot of things, I don’t think it’s a bad thing if a landlord is serving that notice and sort of telling the tenant, look you're behind on your rent and you could be evicted potentially, but it has some remedies once we get to that if it gets really far into the red. I don't think it's a bad thing for landlords to sort of push on it.”
While service of a notice to ‘pay or vacate’ may not be an ideal starting point, it does provide advantages to tenants who lack resources to pay rent. First, many nonprofit service providers require a notice to pay or vacate when they consider whether to provide financial assistance to renters experiencing financial hardship. Second, tenants who are unable to pay rent benefit from receiving notice as soon as possible so they can work with community resources to make their payment.
The industry is working to address housing affordability in Washington state to provide relief to renters, all the while creating opportunities for landlords to improve their rental properties while preserving affordability and creating new housing opportunities of all types across Washington state.
We crafted reforms to the “Pay or Vacate” process that worked for tenants and protected the business interests of landlords, including a State fund which assists tenants in paying rent to remain in housing. We advocated and pursued extending the notice period to terminate a tenancy and passed a law that requires 120 days’ notice when the owner of a rental property intends to demolish, substantially renovate, or change the use of a rental property. We pursued legislation that required information of tenant rights be provided when notice to pay or vacate is delivered. It’s unfortunate that tenant advocates are painting our good faith efforts in a negative light.
We must take a holistic approach to Washington’s housing affordability issues to create meaningful solutions that make real progress in addressing the problem. This includes a comprehensive approach to maintain the existing affordable housing we have and creating more affordable housing for generations to come.
Dear Resource Desk: Can I include a note in my vacancy ad that I am not certified for renting to Section 8 applicants?
No, RHAWA would not recommend putting anything in your ad about Section 8 which can be perceived as steering voucher holders away. Remember, Section 8 is now protected statewide as a source of income.
While you are not required to accept someone with a Section 8 voucher - they must still pass your screening criteria - you cannot turn them away simply because they have the voucher.
If a Section 8 applicant comes to you and passes your screening, the housing authority will perform a health/safety inspection to determine if your property is suitable for the applicant. State law created in 2018 includes a mitigation fund which will pay up to $1,000 in repairs for your unit to be repaired to allow the tenancy to continue. If the repair required by Section 8 is greater than $1,500 you can decline the applicant. Anything under $1,500 and the state will pay $1,000 toward the cost after you cover the first $500.
Sean Martin | Executive Director
On August 1, a King County judge ruled that an initiative which seeks to create a “just cause” ordinance in the city of Federal Way could be placed on the November ballot. The ruling came a few days after RHAWA had filed a motion seeking a temporary restraining order against the measure.
The initiative, labeled as “Stable Homes,” would create just cause protections for renters which would require that landlords meet a “good standard” to terminate a tenancy in the city. Included within the ordinance are provisions which would also create protected classes for renters based on their job occupancy, and which would allow renters to move in relatives without permission of the landlord once a tenancy has been established.
Washington CAN, a community organization most commonly affiliated with Seattle Councilmember Kshama Sawant, had the initiative drafted and supported the effort to secure just enough voter signatures to squeak on to the ballot. This action came after Federal Way City Council chose not to adopt an ordinance of its own.
RHAWA chose to pursue legal relief due to the filing of the initiative failing to comply with the city’s own procedure. Ultimately, the courts sided with the city’s argument that its own initiative laws were “anachronistic” and that state law could be substituted in favor of the city’s own laws.
Just Cause termination laws are problematic for several reasons, the most obvious being that they’re predicated upon landlords being in the business of terminating tenancies which are causing no issues at the property. A lost tenancy poses significant financial risk to a landlord, and the decision to end a tenancy is not taken lightly.
Within the context of the initiative, extending protected class status provisions to individuals based upon their chosen type of employment – first responders, health care providers, and teachers are all called out specifically – is a clear attempt to confuse voters and garner sympathetic votes. When was the last time someone had their tenancy terminated because they were a teacher or a first responder?
Most importantly, however, is that a primary role of landlords is to provide safe and healthy housing for their renters. Just Cause protections put the rights of criminal offenders ahead of the rights of their victims and neighbors.
This issue in Federal Way should be considered a concern for all landlords in the state as “just cause” is likely to receive consideration in other jurisdictions in South King County as we move towards the 2020 state legislative session. WACAN is likely to repeat this process in other cities as a means of forcing the state legislature to act on the issue. In fact, among the arguments made at court, WACAN submitted a declaration stating that if they’re successful in Federal Way they intend to raise "at least $500,000" for similar initiatives next year.
RHAWA membership support on this issue is critical as we push forward in defending our policy solutions which target creating more housing for all income levels.
Effective July 28, 2019, several new landlord-tenant laws took effect which have a direct impact on how rental owners manage their properties and resolve issues with renters. Click the following links to read the bills in full detail:
SB 5600 increases the “3 day” pay or vacate notices to 14 days so that tenants will have an extended time-frame to come up with rent and you will have to wait two weeks to begin the eviction process.
It also re-defines rent to include all recurring charges, which now includes utilities, parking, and storage fees. Several changes were made to the RHAWA rental agreement to reflect this new definition. The bill also requires that all payments must be applied to rent, first.
All RHAWA lease agreements have been modified to accommodate the changes in this law, and a new "Addendum to Lease Terms" has also been created to enable owners to update their agreements with existing renters.
Military Clause Addendum (HB 1138)
HB 1138 changes and clarifies the conditions where Service Members can terminate rental agreements early or upon less than the required 20 day notice. The required notice for a Service Member to terminate a term lease changes from “7 days after receiving orders” to “at least 20 days” prior to the next rental period.
Rent / Fee Increase Notice (HB 1440)
HB 1440 increases the time-frame to raise rent to 60 days prior to the new rental period, no matter how small or large the increase. The law provides a narrow exception that only impacts federal housing. This notice is required for any increase to base rent as well as other recurring fees, which are now defined as rent. With this change, other local ordinances have been superseded, and versions of the RHAWA rent increase notice specific to particular cities are no longer necessary.
Termination of Tenancy – 120 Days (HB 1462)
HB 1462 requires a 120-day notification to terminate any tenancy due to demolition, substantial renovation requiring a permit or change of use (e.g., senior care home, student housing, short term rental, etc.) of any rental property.
An exception is granted If the owner or immediate family member wants to make it their primary residence, this is not considered change of use and 20-day termination notice is acceptable. RHAWA has created a new form for this situation.
Several other RHAWA forms were modified to accommodate these changes in law, including all of our lease/rental agreements, the 20 Day Termination of Tenancy Notice, the Seattle Termination of Tenancy Notice, and the Tacoma Termination of Tenancy Notice.
RHAWA members are strongly advised to ensure they're using the most up-to-date forms by accessing our forms via the RHAWA website or thru the members-only RMAP portal.
The passage of SB 5600, HB 1138, HB 1440, and HB 1462 made permanent changes to Washington State's Residential Landlord-Tenant Act (RLTA) and will require edits to specific RHAWA forms. Please see below how these bills will impact the following RHAWA forms. RHAWA has made all-new Lease Agreements available as of May 31, and the remaining forms will be made available when the new laws take effect on July 28, 2019.
3-Day Pay or Vacate Notice
All Rental Agreements
Dear Resource Desk: My tenant got a job in another state and wants to terminate their lease early – it doesn’t expire until March 31, 2020. What are my options?
This is a pretty common scenario, and the answer is generally the same for most situations where a tenant is terminating early, regardless of circumstance (although there are some exceptions, such as military orders). If you’ve not written a specific “early termination clause” in to your lease (the RHAWA lease does not specify one), you have four basic options which you could consider.
Formal legal advice and review is recommended prior to selection and use of this information. RHAWA does not represent your selection or execution of this information as appropriate for your specific circumstance. The material contained and represented herein, although obtained from reliable sources, is not considered legal advice or to be used as a substitution for legal counsel.
While many homeowners are set to benefit from legislation which revises how excise taxes are charged for real estate transactions, the new, graduated rates will actually bring in millions more in revenue to the state due to their impacts on commercial and rental property. Washington’s current excise tax is a flat 1.28% everywhere in the state. On January 1, state excise tax moves to the following scale:
A ballot initiative which would repeal the REET tax increases, and other tax increases enacted by the legislature in 2019, is currently out in the field and gathering signatures. Initiative 1648 would also require that new taxes enacted by the legislature face term limits unless ratified by the voters.
Unintended Consequences of Seattle City Council’s Proposed Changes to “Notice of Intent to Sell” Ordinance.
The Seattle City Council continues to propose new legislation and amend existing landlord-tenant laws under the premise of addressing housing affordability. At face value, the stated motivation by the City Council is noble; increasing the available supply of affordable housing is badly needed and generally a popular objective among residents of Seattle. However, much of the recent housing-related legislation serves to do just the opposite; instead, it reduces the available supply of affordable housing.
The Seattle City Council’s proposed amendments to the “Notice of Intent to Sell” ordinance is a perfect example of legislation that will do the opposite of the Council’s stated goal. The “Notice of Intent to Sell” ordinance, as it stands today, provides 60-day advanced notice of the owner’s intent to sell a property that has 5 units or more, with at least one unit that is deemed affordable to a household earning at or below 80% median income. The notice is to be submitted to the Seattle Office of Housing (OH) and Seattle Housing Authority (SHA) so that the City agencies have sufficient time to prepare an offer to purchase the property and maintain the unit(s) affordability. It should be noted that in 2017 (the last year Dupre + Scott provided comprehensive multi-family rental data) approximately 87 building sales qualified for the ordinance. Yet, since the implementation of the ordinance, neither Seattle OH nor SHA have provided an offer to purchase one of the buildings containing affordable units.
April 28 brought the 2019 legislative session to a close. After 105 days in session, lawmakers, staffers, and lobbyists alike were ready for sine die, and many in the housing industry were eager for a reprieve from the beating they took on the Hill this year. By the last day of session, the 2019 Legislature substantially amended key components of the Residential Landlord-Tenant Act (RLTA) pertaining to notice periods around rent increases, termination of tenancy under certain conditions, and unlawful detainer. Moreover, lawmakers enacted unprecedented changes to the legal eviction process in residential tenancies.
Rental housing advocates hit the ground running in early January opposing shoddily conceived bills sponsored by Representative Nicole Macri (D-43) and Senator Patty Kuderer (D-48). The “eviction reform” legislation dropped by Representative Macri (i.e. EHSB 1453) and Senator Kuderer (i.e. ESSB 5600) dramatically increase the pay or vacate notice period, automatically converting term leases into month-to-month tenancies, eliminating a rental owner’s ability to collect attorneys’ fees in eviction cases, or late fees in evictions, among other amendments. In conjunction with the eviction reform bills, Representative Macri and Senator Rebecca Saldaña (D-37) proposed bills to enact statewide “Just Cause” which would only allow a rental owner to terminate a tenancy outside of non-payment of rent or behavior for a specific group of reasons similar to Seattle’s Just Cause (e.g. sale of property, owner moving into property, etc.); otherwise, a tenant could remain in a unit in perpetuity, or until the tenant decided to leave the unit.
RHAWA and other industry advocates were successful in stopping “Just Cause” legislation and other onerous and ineffective policies in this year’s legislature. The two “Just Cause” bills that rental housing advocates killed this session include HB 1656 (sponsored by Representative Macri) and SB 5733 (sponsored by Senator Saldaña). If passed, “Just Cause” would have established a Seattle style statewide policy for legally allowable terminations of a month-to-month tenancy.
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Washington is a beautiful state. The views are breathtaking and since it’s such a big state, there’s something for everyone, especially if you love the great outdoors.
Some of the most common reasons people move to the state are:
The housing options Washington state offers is what really seals the deal when it comes to deciding to move. People can find their dream home in a dream place easily.
What this means is that real estate investors can profit greatly from the area. With the median list price for homes in Washington being $524,970 and the average wage being $51,182, people are much more interested in renting over buying. This is especially true for new college graduates, which there are a lot of due to all the colleges and universities in the state. This isn’t to say that couples, families, and singles aren’t renting. Those populations are also interested in lower monthly costs than what owning a house would give them.
For these reasons, consider the following top 6 markets to invest in for real estate property.