HOMEOWNER ASSOCIATIONS &TENANTS

Some homeowners’ associations require that prospective tenants’ applications and credit reports be reviewed by the board of directors.  This could create a problem with fair housing and state laws. Landlords are required to provide applicants with the written criteria by which they will be screened to see if they are qualified to lease the prospective property.  If the applicant meets those criteria, the landlord cannot deny tenancy.  Most HOAs will accept a screening report from a professional screening company documenting that the future occupant meets the screening criteria, but if the landlord’s screening criteria is met, and the HOA turns down the application, all parties could potentially be sued by the applicants and fined by fair housing. 

We are here to help you and your clients with all aspects of the rental market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

RENTALS AS AN INVESTMENT? Yes or No?

Leasing a property can allow the owner to build equity as home values increase while earning rental income.  It can also be a good idea if the owner is planning on returning to the area in the future.

However, owners need to be prepared financially and emotionally for having a tenant live in their home. Tenants may not take the same care of the property as the owners have.  For some people seeing the home where they raised their children after tenants have been in possession for several years can be traumatic.  Other landlords appreciate receiving tax deductions for their investments in improvements.

The landlord is responsible for all maintenance while the home is tenant occupied.  The owner must be able to afford maintenance and repairs, periodic improvements as well as all expenses during vacancies even if the property has a negative cash-flow.

Managing a rental property also requires knowledge of a multitude of ever-changing laws, the ability to deal with sometimes difficult tenants, and the potential of middle of the night maintenance emergencies. Hiring a professional property manager can alleviate many of these practical issues and fees are tax deductible.

We are here to help you and your clients with all aspects of the rental market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

RENTAL PROPERTY INSURANCE

In Washington state residential tenants have typically been considered co-insured under the landlord’s insurance policy.  When this is the case the landlord’s insurance company cannot attempt to collect from the tenant, especially in cases of tenant-caused fires.  A new law was passed changing the Landlord Tenant Act, HB 2064, as of June 9, 2022. 

The bill includes a clause that if the insurance company compensates the landlord for a valid claim for losses such as unpaid rent or damage, the landlord may not be able to seek reimbursement from the tenant for the amount paid to the landlord.

The new law requires the landlord to disclose the terms of the insurance policy prior to attempting to collect from the tenant.  Even if the lease states that the tenant is excluded from coverage under the landlord’s insurance policy, if the terms of the policy provides coverage in the event the tenant does not pay for tenant-caused damage, the clause may be invalid.

The bill is complicated and includes specific steps that must be made before attempting to collect from a tenant for some losses.  The assistance of the insurance broker and/or an attorney will likely be required.

We are here to help you and your clients with all aspects of the rental market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

TENANT RELOCATION ASSISTANCE?

As of July 1, 2022, the Economic Displacement Relocation Assistance ordinance (EDRA) went into effect in Seattle.  Under EDRA, landlords who increase rent by 10% or more may owe tenants relocation assistance.

EDRA will apply if rent is increased a total of 10% or more over the course of twelve months; if the tenants are considered low income and if they move because of the rent increase.  Low income is defined as at or below 80% of median.  When calculating the rent increase, landlords must include all housing costs, including parking, pet and storage rent.

CONFUSED YET???

Landlords who are increasing rents by 10% or more must include this notice, EDRA Notice Seattle.  Tenants will apply for EDRA with the city and the city will determine if the tenant is eligible and if so, the amount of their award, which is paid by the landlord.

We are here to help you and your clients with all aspects of the rental market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

OVER REGULATION = LOSS OF RENTALS

In response to increasing rental prices, A Regional Coalition for Housing (ARCH) recently proposed changes to local laws.  With rising expenses, interest rates and the lifting of the moratorium on rent increases, ARCH reports that HUD will allow rent to be increased as much as 16% for local tenants with subsidized housing. ARCH sent letters to multiple mayors and city councils suggesting the following changes to local laws:

1. Require landlords to provide a minimum of 120 days’ written notice of rent increases greater than 3% and 180 days’ notice of increases greater than 10%.
2. Cap fees for late rent at 1.5% of one month’s rent.
3. Limit move in fees and security deposits to the equivalent of one month’s rent and allow tenants to pay in installments.

A coalition of rental housing organizations wrote to oppose ARCH’s proposal, which they assert would increase, “the already onerous burdens placed on small housing providers.”  They conclude:

“We have seen over 11,000 rental housing units leave the Seattle market over the last year. A survey of our membership shows that 40% of respondents sold their rental properties in 2021 due to increased regulatory burdens. As rental supply is dwindling across the state, now is not the time to increase the already onerous burdens and push more housing providers out of the market.”

We are here to help you and your clients with all aspects of the rental market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

SELLING A RENTAL PROPERTY?

When a property is sold with a tenant in place, the purchase and sale agreement should address how tenant deposits and pre-paid last month’s rent will be transferred to the buyer.  The buyer will need a copy of the original move in inspection report.  Without one, the tenant cannot be charged for any cleaning required at move out or for any damage done to the property. 

The seller must inform the tenant in writing that the deposit is being transferred to the buyer and the new landlord is responsible for informing the tenants of the Washington State bank and branch where the tenant’s deposits will be held in trust.  The new owner will be responsible for refunding any deposit owed the tenant at move out, per the terms of the lease, even if funds aren’t transferred at closing.

We are here to help you and your clients with all aspects of the rental market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

TENANT APPROVAL CRITERIA

Prior to obtaining any information about a prospective tenant, Washington State Law (RCW 59.18.257) requires that landlords provide their screening criteria in writing to prospective applicants.

In the city of Seattle there are some screening limitations which differ from the rest of the state.

Click on the buttons below to view our current criteria for tenant approval.

We are here to help! Check out our website for more details. http://www.cbbainrentals.com

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

MEMORIAL DAY – 2022

WASHINGTON LEASES.

A lease is a legally binding contract. Everybody knows that, RIGHT?  But do you know what that means?

• Even though the landlord owns the property, it is the tenant’s home.  Once a tenant moves in, even if the owner raised their children in the house, it is now an investment property and, as such, the owner doesn’t get to do whatever they want, even though they may think they can.
• In Washington State tenancy cannot be ended, even at the end of the lease or month-to-month term without cause (a reason) and proper notice.
• The owner cannot terminate a lease mid-term because the landlord’s job overseas didn’t work out and they want to move back in, or because the owner wants to sell, not even if the owner has terminal cancer and wants to settle their affairs.
• The landlord cannot increase rent via text or tell the tenant to vacate via email. 
• The owner can’t change the locks, remove windows or doors or stop utility services because the tenant hasn’t paid rent without a court order.
• Unannounced “visits” are not allowed; except in the case of a bona fide emergency, the tenant has the right of prior notice and has the reasonable right to say no to a proposed date and time.

We are here to help you and your clients with all aspects of the rental market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

WHAT COVID-19 WROUGHT.

The pandemic caused a variety of changes in the rental market?  The impact was varied and many changes appear to be permanent.

Rents went down and then increased over the course of the pandemic.  In 2020, when many were working remotely, there was an exodus of tenants from cities to less expensive rural markets.  This exodus resulted in higher vacancies and lower rents. However, as mortgage rates went down and the sales market heated up, many investment owners decided to sell and the market changed from a renter’s market to a landlord’s, with lower vacancy rates and increasing rents.

The pandemic also changed leasing protocols as remote systems became necessary.  Online marketing and virtual tours became the norm.  Prospective tenants no longer have to be local to view a potential property.  Applications are often completed online and leases can be signed electronically. 

As common amenities, such as swimming pools and fitness centers, reopened, many apartment and condominium communities implemented a practice of scheduling usage in order to limit the number of simultaneous users.  The added privacy has been so popular, many communities intend to continue the practice.

The stay-at-home mandate also changed the space demands of tenants.  Roommates working remotely and kids attending school from home decided that more separation and space were important for sanity. 

The most significant changes to the rental market are a result of the eviction moratorium, the impacts of which are ongoing, as well as changing rental laws.

We are here to help you and your clients with all aspects of the rental market. Please contact us for further assistance!

#cbbainrentals

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.