The New World of Lease Renewals & Rent Increases

Posted By: Denise Myers Education , Leasing ,

If you have been reading the headlines since May, you know that Washington law now prohibits you from giving notice to end a month-to-month tenancies without cause, or rarely with less than 60 days or more notice. If you skipped the fine print, you may not realize that the new laws also make fixed term leases significantly more complicated to maintain. Gone are the days of sending lease renewal offers in an email on your own schedule. Additionally, depending on the location of the property and other circumstances, you may not have the option to end a fixed term tenancy for no cause. Housing providers will need to carefully evaluate their situation and determine their standard practice for leasing and renewals going forward.

So what changed, why, and when?

Washington’s new statewide “just cause eviction” law effective May 10, 2021 is now found mostly under RCW 59.18.650 - Eviction of tenant, refusal to continue tenancy, end of periodic tenancy—Cause—Notice—Penalties. In the initial version of the bill (HB 1236), housing providers would be required to have a “good cause” to end any tenancy, even fixed term leases. Through the work of the RHAWA advocacy team and other partners in the housing provider community, an exemption for certain fixed terms leases was retained, allowing a housing provider to limit tenancy to a fixed term and legally end the tenancy with no cause at the end of the term. This is a valuable tool for owners who may have specific time sensitive plans for a property after renting it for a period of time. Unfortunately, this carve-out came with complex rules involving the length of the initial term and how subsequent terms are renewed. Meanwhile, several local governments including Federal Way, Auburn, Burien, Unincorporated King County and Seattle have passed ordinances that, in one way or another, prohibit housing providers from ending fixed term tenancies without a “good cause” or “just cause”.

The intersection of various parts of the law makes lease renewal regulations complicated and difficult to interpret, but here are the pertinent rules boiled down as best as we can:

  1. In order to establish and maintain a “just cause” exempted fixed-term tenancy, one of the following term length scenarios must be followed:
    1. If the initial agreement is fixed term between 6 and 12 months and converts to M2M at end of term, the housing provider may end tenancy with no cause with 60 days' notice prior to end of INITIAL TERM ONLY.
    2. If the initial agreement is a term 6 months or more, NOT converting to M2M, AND the agreement was continuously renewed for a fixed term of 6 months or more, the housing provider may end tenancy with no cause with 60 days' notice prior to any specified term throughout the tenancy.
    3. If the initial agreement is a term 12 months or more, NOT converting to M2M, AND the agreement was continuously renewed for a fixed term of ANY length, the housing provider may end tenancy with no cause with 60 days' notice prior to any specified term throughout the tenancy.
  2. In order to preserve “just cause” exempted fixed-term tenancy, all renewal offers throughout the tenancy must be served at least 60 days prior to the end of the term.
  3. If a tenant does not sign a new lease (properly served notice with offered lease of reasonable terms) at least 30 days prior to the end of the term, this is grounds for ending the tenancy.
  4. If the housing provider does not properly serve notice, and the tenant remains on the property without signing a new fixed term lease, the tenancy automatically converts to a month-to-month agreement subject to “just cause”.
  5. Any rent increase notice (including with fixed term lease renewals) must be served with 60 days notice.
  6. Changes in rules on a month-to-month tenancy can be made with 30-days’ notice.
  7. All notices must be served according to 59.12.040 (like a 14-day or 10-day notice).

Implementing the changes in your procedures

The following RHAWA Forms are available at www.rhawa.org/rental-forms-leases-notices to facilitate your procedural choices. Remember rule #7 above, all notices must be serviced. Make sure to follow the instructions in the downloadable notice form packet.

For Fixed Term Tenancies

  • Multi-Family Term Lease for any property where there are more than one residence (including individual condo, single-family property with ADU, or shared single-family home).
  • Single-Family Term Lease for any property with just one residence.
  • End of Term Notice with Lease Extension Offer form to offer an extension of the current terms or renew the tenancy under new terms. Tenant must sign offered extension or move out.
  • End of Term Notice with Month-to-Month Offer form to inform the tenant of the end of term and offer a month-to-month tenancy. Tenant must sign offered terms or move out.
  • End of Term Notice (non-renewal) form to serve notice of non-renewal, but only if the agreement has been maintained in a way that is exempt from the laws that require good cause or just cause to end a tenancy. This form should not be used in Auburn, Burien, Federal Way, Seattle or Unincorporated King County.

For Month-to-Month Tenancies:

  • Multi-Family Rental Agreement for any property where there are more than one residence (including individual condo, single-family property with ADU, or shared single-family home).
  • Single-Family Rental Agreement for any property with just one residence.
  • Rent Increase Notice to increase rent with 60 days’ notice prior to the end of a rental period. Instructions include information about any local laws requiring greater notice periods.
  • Rule Change in Terms of Tenancy Notice to change rules or other terms in the agreement.
  • End of Tenancy Notice to end a month-to-month tenancy for cause. See Statewide Guide on Good Cause to End Tenancy for causes permitted under state and various local laws.

Remember, for either type of tenancy (fixed term or month-to-month), standard 3-day, 10-day, and 14-day notices regarding non-compliance with rental terms can be served as long as they are not prohibited by any emergency orders.

Regardless of what decisions you make related to leasing and renewals, due to the new requirement to serve notices for renewals and rent increases, the effect is likely to be alarming for your tenants. Make sure to communicate with your tenants in advance via email or other routine method of communication to let them know of the coming changes and give them an opportunity to discuss any options you may consider before serving notice. Also, let them know that the new laws require serving these notices in a formal way. Finally, make sure to calendar renewal reminders if you are choosing to maintain “just cause” exempt fixed term tenancies. If you miss the window, you will lose your exemption.