City Regulations – Rental Realities

More local jurisdictions are imposing new rental regulations.  State law requires a 60-day notice of a rent increase; the following locations require more notice.  Some locations limit move in costs and some limit late fees.  There are modifications and new laws every month, so care is required.

Auburn

Rent increases greater than 5% require 120 days’ notice

Move in fees and deposit limited to equivalent of one month’s rent

Additional pet deposit allowed

Late fees limited to $10

Kenmore

Rent increases greater than 3% require 120 days’ notice

Rent increases greater than 10% require 180 days’ notice

Move in fees and deposit limited to equivalent of one month’s rent

Late fees limited to 1.5% of one month’s rent

Kirkland

Rent increases greater than 3% require 120 days’ notice

Rent increases greater than 10% require 180 days’ notice

Move in fees and deposit limited to equivalent of one month’s rent

Redmond

Rent increases greater than 3% require 120 days’ notice

Rent increases greater than 10% require 180 days’ notice

Maximum late fee is 1.5% of one month’s rent

Move in fees and deposit limited to equivalent of one month’s rent

Seattle

All rent increases require 180 days’ notice

Move in fees and deposit limited to equivalent of one month’s rent

Pet deposit limited to 25% of one month’s rent

Unincorporated King County

Rent increases greater than 3% require 120 days’ notice

Move in fees and deposit limited to equivalent of one month’s rent

Late fees limited to 1.5% of one month’s rent

New regulations go into effect on October 6, 2022, in Issaquah.

Issaquah

Rent increases greater than 3% require 120 days’ notice

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 DAMAGE/SECURITY DEPOSIT

A damage/security deposit is the tenant’s money, held in trust as insurance that the tenant will fulfill the terms of the lease. The deposit may not be utilized during tenancy without the tenant’s written permission. If the property sells during tenancy, the seller must notify the tenant that the deposit has been transferred to the buyer and the buyer must notify the tenant in writing of the Washington state bank and branch where the deposit will be held in trust. After the tenant vacates, the deposit may be used for cleaning and repairs with property documentation and processes.

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.

HUD & ENFORCEMENT

HUD’s maximum civil penalties for violations of the Fair Housing Act are $16,000 for a first violation of the Act; $37,500 if a previous violation has occurred within the preceding five-year period; and $65,000 if two or more previous violations have occurred within the preceding seven-year period.  However, that doesn’t mean that the expense to a landlord would be limited to those amounts.

For example, HUD just announced a settlement agreement with the Dallas Housing Authority (DHA) requiring a $500,000 payment to a tenant for failing to grant her reasonable request to move to a ground floor unit after a car accident. According to the findings, the tenant was forced to crawl up and down the stairs to access or leave her home, causing her physical pain, injury, and humiliation. HUD also found that DHA retaliated against the tenant by refusing to accept her rent payments and then evicting her.  DHA must vacate all judgments it obtained against her and clear any debts DHA had alleged she owed. In addition, DHA will pay a $10,528 civil penalty to HUD.

In another case a Long Island landlord was found to have violated the Fair Housing Act when he refused to rent to a mother and her daughter because of the daughter’s cerebral palsy. The judge ordered the owner to pay $50,530 in damages to the family and a $20,111 civil penalty.

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.

Federal eviction moratorium violations investigation

The Select Subcommittee on the Coronavirus Crisis, chaired by Rep. James E. Clyburn, released a new staff report with findings from its year-long investigation into the eviction practices of four large corporate landlords during the first 16 months of the coronavirus pandemic. The Select Subcommittee launched its investigation on July 20, 2021, following public reports that certain large landlord companies had failed to fully comply with the Centers for Disease Control and Prevention (CDC) eviction moratorium or to cooperate with rental assistance programs funded by Congress.  The Select Subcommittee on the Coronavirus Crisis reported that four companies under investigation – Pretium Partners, Invitation Homes, Ventron Management (Ventron), and The Siegel Group (Siegel) – engaged in abusive tactics to remove tenants from their homes.

Per the report, these companies filed nearly three times more evictions, almost 15,000, than previously known during the first 16 months of the pandemic. During the same period, Invitation Homes reported record profits, Pretium Partners acquired thousands of new properties, and both Siegel and Ventron received millions of dollars in Paycheck Protection Program (PPP) funds.

Siegel executives directed employees to use harassment tactics to push tenants out of their apartments.  Strategies to “get rid of… a past due” tenant without obtaining an eviction order included directions to “call Child Protective Services to come out,” having security knock “on [a tenant’s] door at least twice at night,” and replacing her air conditioning unit with a “nonworking AC.”

All four companies had policies or practices that allowed filing eviction cases even when tenants had applied for rental assistance and were waiting for pandemic rental assistance as state and local governments set up infrastructure to disburse billions in federal assistance dollars.

Chairman Clyburn has referred relevant findings of the Select Subcommittee for further investigation and potential enforcement or other action to: the CFPB and FTC regarding Siegel’s CDC moratorium-related deceptions; Fannie Mae regarding Invitation Homes’ potential misrepresentations; and the Texas Department of Family and Protective Services to determine whether any Siegel employee filed any false report of child abuse or neglect to coerce tenants to leave their homes.The investigation is ongoing.

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.

TACOMA WASHINGTON – GOOD FOR RENTALS?

Tacoma is often considered a good place to invest in rental properties?  While demand is strong, prices are significantly lower than those in Seattle. The Tacoma-Lakewood was recently rated #48 in the FHFA House Price Index and NeighborhoodScout.com reports that Tacoma’s real estate appreciated 137.74% over the last ten years, which puts Tacoma in the top 10% nationally for real estate appreciation.

Other advantages of investing in Tacoma rather than Seattle include:

• Tacoma is within commuting distance of Seattle’s job market without being subject to Seattle’s often “insane politics.”
• The Tacoma area is gaining more jobs as businesses relocate from Seattle and San Francisco.
• Joint Base Lewis-McChord is one of the biggest employers in the area, employing more than sixty thousand people who are more likely to be renters than buyers.

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.

RENT INCREASE REGULATIONS

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.

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.