What is a Mandatory Lease Renewal & Why Should I Care?
In the last two years there has been a dizzying amount of discussion about eviction, termination, homelessness, relocation assistance, and many other policies that seek to change the way tenancies end in Washington. This year, there has been intense efforts by tenant advocates and lawmakers to create a policy in HB 2453 that will result in forcing property owners to renew rental agreements by law. This policy is very dense, with layers of conflicting local and state laws, which has made it hard for many in the public policy debate to follow RHAWA’s significant concerns for what will happen to small housing providers if HB 2453 becomes law.
Because RHAWA members often do everything in their power to work with tenants to find ways to keep the landlord-tenant relationship happy and healthy, even some in our industry can be confused about eviction, termination, and the various regulations discussed in the media. Below is a quick review of the types of tenancies and how they can end in our state.
Eviction through Unlawful Detainer
If you and your tenant have a written rental agreement – like RHAWA’s standard form lease – that contract largely controls the relationship between you and your tenant. The rent rate is locked in and can’t be changed, and the term of the rental period is clearly defined in the contract. In order to end a tenancy, the parties would have to allege that there was a violation of the contract agreement. This is where the majority of evictions occur in Washington. If a tenant fails to pay rent, a housing provider would prove that in court as a violation of the rental agreement and receive a judgment from the court. As part of that judgment the court would order a writ of restitution, which is the piece of paper that allows the sheriff to return the property back to the property owner. This process can take a lot of time and money, especially if the violation of the rental agreement is not for simply non-payment of rent.
Eviction commonly means a lawsuit on the breach of a rental agreement contract. It is not a termination of tenancy.
Termination of Tenancy
If you and your tenant do not have a written rental agreement, then the rules of the tenancy are regulated by the state Residential Landlord-Tenant Act where responsibilities and terms for both parties are set forth in the law. This relationship is commonly called a “Month-to-Month” tenancy. Legally, the two parties are only agreeing to have a relationship for each month, but that relationship renews every time a housing provider accepts a rent payment from the tenant. Because there is no contract to litigate in court, month-to-month tenancies are most often ended by termination. The parties aren’t stating that there was a violation of any rule or contract, but simply that the monthly renewing relationship will terminate. The notice for issues like termination and rent increases when there is no rental agreement is set forth in law and has been the subject of much policy debate in the last few years.
Termination commonly means the ending of a “Month-to-Month" relationship; it is not an eviction.
Just Cause Termination
Inside the cities of Seattle, Federal Way, and Burien, there is a policy that prohibits the termination of month-to-month tenancies unless the reason for the termination falls into a “Just Cause” category. These “Just Causes” are typically, non-payment of rent, behavior violations, removing the property from the rental market, a property owner or their family wants to move into the property, or there is substantial renovation required at the property. Depending on the law there are different notice periods and tenant assistance required under each of these scenarios. It is important to understand that “Just Cause” removes a housing provider’s ability to end a tenancy without a government approved permissible reason. This fact gives the tenant leverage in negotiating agreements with housing providers in a variety of ways.
“Just Cause” does not apply to tenancies with a rental agreement in current law.
Mandatory Lease Renewal
While it is fairly clear that the difference between a rental agreement, which both parties are committed to for the term of the agreement, and “month-to-month” tenancies, where the parties continually renew a short term relationship each time rent is paid, there is one tricky situation where the law is in flux. What happens when a rental agreement term ends? State law says that a rental agreement ends when the term is over.
This means, that even in a city like Seattle, which only allows termination of “Month-to-Month” tenancies, a housing provider has the opportunity to terminate a tenancy when the term of the rental agreement ends. This termination can only happen at the moment the rental agreement term has expired. If the housing provider offers a new rental agreement, then the tenancy would be regulated by the new agreement. If the housing provider accepts rent payments following the end of the term of rental agreement, then the relationship converts to a “Month-to-Month” relationship which would be regulated by “Just Cause” in the localities where the law exists.
HB 2453, currently moving through the Washington State Legislature, would create a “Just Cause” for termination policy, across the state, making every jurisdiction similar to Seattle. No property owner will be able to terminate a tenancy without “Just Cause.” But even more concerning, is the provision in section 4 of HB 2453 that amends the state law so that just cause will apply to termination of a rental agreement.
If HB 2453 becomes law, when your lease ends with your tenant, you will be required to offer them a new rental agreement, or you will have to provide a government-approved cause to terminate the tenancy.
Why does this matter? RHAWA members who aren’t in the business of housing, but are offering their community a residence while they secure their future or retirement with a real estate investment will be forced to choose between having a tenant locked into the property forever, or taking the property out of the available housing stock.
Many tenant advocates and policy makers do not understand why a tenant shouldn’t have the right to reside in a unit for as long as they wish, as long as that tenant complies with the law. As RHAWA members know, the vast majority of tenants are excellent, and have a fruitful and pleasant relationship with the property. But limiting the tools of a property owner to remove a tenant whose behavior is troublesome for other tenants, but doesn’t rise to the level of arrest, is a scary proposition.
Small property owners need the flexibility to rent their properties as their family planning dictates, and many small housing providers will simply not rent their units, rather than try to navigate having a tenant have the right to the property forever. In our current housing crunch, we cannot have any housing providers incentivized to leave the market. Finally, mandatory lease renewal will hurt some tenants, as small housing providers will be forced to increase their screening criteria to address the increased risk put upon them by regulations that remove flexibility and control of private property.