Just Cause Tenancy – What is a Landlord To Do?
Multi-family property owners continue to see their ability to manage their properties become more and more regulated. It’s been a tough couple of years with all the restrictions placed upon us that prevented us from collecting the rents on our properties. As we now come out of that horrible situation, the State and local legislatures continue to pass new regulations that will severely limit your ability to select and manage your tenancies.
Owners must decide whether to continue with Leases that are for a specific period or allow their units to go to month-to-month tenancy.
Let’s look at some of the Pros and Cons of each.
Fixed term leases:
Historically, many owners have kept their tenants on a fixed term so they could control the lease date expirations to avoid expiring during the winter months when filling a vacancy is extremely difficult. Another big plus of fixed term leases was the ability they could renew their good tenants and not need to renew those that create an excessive burden on management.
New WA State law under RCW 59.18.650(1)(c) details specific leasing requirements that make a tenancy exempt from the new “Just Causes” to end tenancy.
Several cities, including Seattle do not allow “nonrenewal” without a just cause. While the state law requires the same 60-day notice for lease renewals and rent increases, many cities require longer notice periods, meaning that you would need to give a rent increase notice months prior to giving 60 day notice of lease renewal. In Seattle, lease renewal must be served between 60 and 90 days.
Question: How is a landlord to keep track of the 60-day dates for each lease, send the notices the same way you send a pay or vacate notice, and keep track of all the other legal requirements?
By now, I am quite sure many have decided to forgo fixed leases and let their units inure to month-to-month tenancies. While that path will greatly simplify your life, it is fraught with other landmines that could make the management of your properties perhaps even more frustrating.
If you allow your units to convert to a month-to-month lease, you gain the freedom of not having to follow the dates and requirements outlined above. Here is the potential landmine of taking this path. RCW 59.18.650 states that for any units not on a fixed lease “a landlord may NOT end the tenancy except for the causes enumerated….” Please refer to RCW 59.18.650(2). An easy way to understand this is “just cause.” Put simply, if there is a tenant that is a nuisance to you or other tenants, unless you cancite at least one of the 16 causes listed under RCW 59.18.650(2), they can be your tenant for life, should they wish to stay in your building.
If the above is not daunting enough, the City of Seattle as well as other jurisdictions have put in place a plethora of additional laws and requirements.
To be clear, I am a professional property manager, not an attorney. While I believe that leases should remain fixed, I am aware that many owners do not have the benefits of the software and staff required to maintain that objective. Before you decide which way to go, you may want to consult with your attorney to make sure that you remain in compliance as the amount of litigation today brought against owners and property management companies seems to be at an all time high. A simple exercise to prove my point: Google “Washington State Landlord Tenant Laws.” Over 90% of the sites that you will see relate to “tenants’ rights” not Landlords.
If you would like to discuss the above in more detail or have any specific questions we are here to try and assist you!
Bruce Kahn, CCIM, CPM is a Principal with the Foundation Group Property Management, a full-service Accredited Management Organization (AMO). Bruce has been an active real estate owner and management professional for over thirty-five years. For further information, please contact him at (206)324-9242 or email@example.com