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.
In addition, industry advocates were able to stop the legislature from requiring mediation before moving forward with an eviction proceeding, remove a proposed change to RCW 59.18.220 in ESSB 5600, which would have automatically converted term lease agreements to month-to-month agreements at the expiration of a lease, and stopped a bill that would require landlords to accept installment payment plans on move-in fees and deposits.
While the salient policy that emerged from the eviction reform bills is increasing the notification period for nonpayment of rent, the bills also alter many other segments of the eviction process and the landlord-tenant relationship. ESSB 5600 and ESHB 1453 both limit the amount of attorney's fees and late fees allowed in an unlawful detainer judgment, create a definition of rent that separates recurring fees and utilities in the rental agreement from other fees and costs, require that landlords apply payments to rent first before other costs and fees, limit a landlord’s ability to bring an eviction for charges other than rent, and create new processes in eviction law for tenants to reinstate a tenancy through judicial discretion payment plans for nonpayment of rent.
The efforts of the RHAWA government affairs team alongside other rental housing industry advocates led to some amendments in the stakeholder process including the creation of a fund out of the state capital budget to pay off eviction judgments that receive judicial discretion reinstatement. The money will allow landlords to take their judgments for nonpayment of rent to the Department of Commerce for payment. While many of the regulations in these bills will be burdensome on housing providers, some legislators understand that housing affordability for rent burdened tenants is a societal issue that must be addressed with significant public and private funding.
By the close of the legislative session it was Senator Kuderer’s, ESSB 5600, that passed through both chambers and was signed by the Governor on May 9. ESHB 1453 passed the House in a contentious vote when three Democrats broke with their caucus and voted no, along an otherwise party line vote. After moving over to the Senate, ESHB 1453 later died in a Rule’s Committee. The substantive policies reflected in the statewide law imposed on landlords and tenants by ESSB 5600 include:
RHAWA and other industry advocates continue to argue that these increased regulations will create further cost burdens on landlords who have not received rent owed, and those costs will be reflected in increased rents for tenants. And with all the intense focus on the eviction process by the advocates for ESSB 5600, there has been little discussion about the deeper issue of rent burden that causes tenants to fall behind in rent. Individual RHAWA members and our government affairs team attended public hearings, and participated in stakeholder meetings, and private discussions with key lawmakers to educate them on the critical role small landlords play in the affordable housing matrix, and our limited ability to bear drastic increases in operational costs.
The bill also contains some practical educational and plain-language updates to the RLTA that the industry supports, like setting out the standard form of the “pay or vacate” notice in statute, requiring state government to offer translations of critical notices from landlords to tenants in several languages, and updating the form of the summons and complaint for an unlawful detainer to be better understood by all parties.
Beyond ESSB 5600, other new RLTA laws and changes stem from the passage of HB 1440 (sponsored by Representative June Robinson (D-38)) which is a new statewide law that changes the increase in rent notice for month-to-month tenancies from 30 days to 60 days for any amount of rent. In HB 1138, (sponsored by Representative Cindy Ryu (D-32)) the RLTA language updates the regulatory framework around the legal termination of a lease agreement by a member of the Armed Services. It requires a member of the Armed Services to give a 20-day notice to their landlord if they need to break their lease obligation under specific circumstances. Finally, HB 1462, (sponsored by Representative Andrew Barkis (R-2)) requires a landlord give 120 days’ notice for termination of a month-to-month tenancy when the termination is for the property to be substantially rehabilitated, has a change of use, or is demolished. Substantial rehabilitation is defined as, “extensive structural repair or extensive remodeling of premises that requires a permit such as a building, electrical, plumbing, or mechanical permit, and that results in the displacement of an existing tenant”. Change of use is defined as conversion from residential to non-residential, or to another form of residential use. Displacing a tenant due to an owner or their immediate family occupying the unit does constitute a change of use. A property owner in violation of the policy is liable in a civil action up to three times the monthly rent. All these bills will take effect July 28, 2019.
Although the 2019 legislative session proved to be a tough battle ground for the rental housing industry, rental housing advocates were able to prevent some particularly onerous pieces of legislation from becoming law this year. The rental housing advocate team also helped draft HB 1462, a new law that seeks to address the specific issue of displacement, which will prevent situations like The Tiki from happening again.
As for the outcome of substantive pieces of ESSB 5600 and the litany of statewide regulations imposed on rental housing owners across the state, the law takes effect in July. What proponents of the bill predict will create protection and housing stability, especially for renters in financial turmoil, may find that the application of a policy designed in an echo chamber is inferior to the policy it replaced.