Articles
Seattle Small Landlords & the Legislative Tsunami: A Five-Year Recap
By Angie Gerrald
May 2021
From 2017 to 2021, Seattle landlords have experienced a tidal wave of complex new laws, with numerous pending ordinances continuing to unfold. This constantly changing regulatory landscape has rapidly increased the burden on small mom-n-pop landlords, who have traditionally provided some of the most affordable and flexible local rental housing.
The following list recaps the five-year onslaught of legislation that is dramatically decreasing rental housing availability, affordability and stability of small-scale, community-owned rental housing in Seattle.
2017-2021 New Landlord-Tenant Laws
First-In-Time Law. Housing providers are required to rent to the first qualified applicant for a rental unit, based on written criteria.
Fair Chance Housing Law (No Criminal Background Checks). Housing providers are not allowed to run criminal background checks on potential renters.
Roommate Law. Limits the rights of rental housing providers to deny adding roommates to a current tenancy. Housing providers must accept “immediate family” (defined extremely broadly) and “additional residents” as occupants.
Domestic Violence Exemption. Relieves tenant from liability for damage to landlord’s property if caused by domestic violence, sexual assault, unlawful harassment, or stalking.
Cap on Move-In Fees & Pet Damage Deposits. Limits the amount of charges for security deposits and non-refundable move-in fees, and gives tenants the right to pay in monthly installments after move-in.
Installment Payments for Last Month’s Rent. Requires that landlords allow tenants to pay last month’s rent in extended installments after move-in.
Winter Eviction Ban. Provides a defense against any eviction that would result in a moderate-income resident having to vacate a rental unit between December 1 and March 31.
Covid-19 Eviction Moratorium. For more than one year, during (and 6 months after) the pandemic, provides a defense to any evictions for nonpayment of rent. Prevents tenants from incurring late fees, interest, or other charges.
Right to Counsel. Guarantees the right to legal counsel for any residential renter in Seattle facing eviction.
Prohibited Use of COVID-19-related Eviction History. Housing providers may not decline to rent to anyone based on eviction history that occurred during or within six months after the end of the civil emergency.
Just Cause Eviction Ordinance (JCEO) update. Tenant failure to comply with a pay or vacate notice changed from three days to 14 days, in accordance with change to state law.
Defense in Commencing Action. City code was amended to be consistent with changes to state law, giving residential tenants more time to respond to eviction notices, more notice of rent increase and other changes.
Distribution of Information Packets. Landlord must provide an up-to-date copy of Landlord Tenant Laws and Voter Registration information to any tenant or prospective tenant.
Additional 2017-2021 landlord-tenant laws and municipal code changes include: Private Right of Action, 2017; Retaliation Prohibited, 2016; Seattle Open Housing Poster, 2016; Unfair Practices - Generally, 2016, 2018; and Evictions Only for Good Cause During Notice Period, 2019.
And the tsunami may not have even peaked — amidst this overwhelming regulatory environment and the extreme challenges of the pandemic era, Seattle City Council is continuing to push through more landlord-tenant legislation at a rapid pace.
As of spring 2021, additional legislative items under development or consideration include:
Prohibiting fixed term leases
Prohibiting credit checks
Prohibiting evictions during the school year with no compensation for losses
Requiring 4-6 months’ notice for even small rent increases
Requiring standardized leases throughout the city
Policies are being developed with no small housing provider input and no research or analysis of the market impacts of the 2017-2021 onslaught.
Setting the Stage
Early impacts of legislation hostile to housing providers were noted in the 2018 Rental Housing Study commissioned by the City Auditor’s office, in which UW researchers reported that 40% of landlords were selling or considering selling their Seattle rental properties in reaction to the City’s rapidly changing policies and punitive approaches. Astoundingly, City Council has done no follow-up outreach or analysis with landlords, passing even more rapid-fire landlord-tenant regulations with no pause in sight.
While the focus of this update covers the period 2017-2021, it is important to mention Seattle’s 2010 Rental Registration & Inspection Ordinance (RRIO), which went into effect for small providers in 2015-2016 (SMC 22.214). The law requires all rental housing units to be registered with the City and subject to periodic inspections based on an extensive safety checklist. In Seattle, no one can legally rent a housing unit without obtaining a rental housing registration for the property. The cost is $70 for a property and its first rental unit, plus $15 for each additional unit, renewable every 2 years. Violations are enforceable in municipal court, with penalties up to $150 per day for the first ten days the violation or failure to comply exists and $500 per day for each day thereafter. Owners may not raise the rent or issue an eviction notice if a unit is not registered.
With RRIO, the Seattle Department of Construction & Inspections (SDCI), has oversight of and contact information for all legally registered Seattle landlords (with the exception of owner-occupied shared housing), yet despite the city’s escalating housing crisis and the intense pace of legislation targeting landlords, small local housing providers have been excluded from City Council committee meetings and presentations, city commissions, and other outreach and analysis.
Seattle has no framework for landlord-tenant policy collaboration.
Have any other small businesses in Seattle been subjected to such an intense, prolonged and quickly changing regulatory environment with relentlessly negative results? What are the impacts to renters, and why aren’t our elected leaders tracking this? How many people have pulled units out of the market due to increased risk, cost, and complexity? How many barriers are impeding opportunities for new small housing providers, while city council is actively stoking a more corporate, expensive, and restrictive Seattle rental housing market?
The 2017-2021 Legislative Tsunami
Disclaimer: This legislative compilation is based on good faith research efforts, subject to updating/revision, and may not be comprehensive.
Housing providers are required to rent to the first qualified applicant for a rental unit, based on written criteria. Landlords must publicly list all minimum criteria considered in tenant screening and must keep detailed date/time records of all application materials.
The Seattle first-in-time ordinance is meant to help ensure equal treatment among prospective renters (to eliminate conscious and unconscious bias) but has the unfortunate result of favoring those who are able to respond quickly to rental listings (people with cars, Internet access, flexible work hours, no language barrier, etc.). It affords no discretion to the small-scale landlord to extend a break to applicants with a compelling need. The law increases risk and decreases flexibility by requiring that only pre-determined written criteria be used in decision-making, which means managing risk by setting inflexible, higher minimum standards and far less ability to work with applicants who have less competitive backgrounds and rental histories, even if they otherwise would make great tenants.
For larger-scale (“by-the-numbers”) landlords, this type of law may be reasonable, but for community-based mom-n-pops (with only one or a few units, no property management or legal teams, who may only have turnover once every few years, and who may live on site), it is an onerous loss of control, increase in risk, and a barrier to offering self-managed, affordably priced housing in the Seattle rental market. It also prevents housing providers from the flexibility to make decisions in a renter’s favor.
Failure to comply with these requirements may result in landlord liability for civil penalties ($11,000: 1st time; $27,500: 2nd time; $55,000: 3rd time), rent refunds or credits, attorney fees and costs, and other potential repercussions.
Exemptions: ADUs and Federally Assisted Housing are exempt.
Housing providers are not allowed to run criminal background checks on potential renters.
To reduce housing barriers for persons with criminal records, landlords are prohibited from requiring disclosure, asking about, rejecting an applicant, or taking an adverse action based on any arrest record, conviction record, or criminal history. Even for sex offender registry, landlords are limited (e.g., review of registry is allowed but applicants may not be rejected unless “legitimate business reason” is declared). For small-scale housing providers who handle their own property management and maintenance (their safety is not buffered by support/resources from other maintenance, administrative and legal personnel), this introduces difficult, undefinable risk levels. This law also prevents current tenants from managing risk levels, as their landlords are prevented from screening criminal background of applicants for neighboring units.
Penalties for failure to comply: $11,000: 1st time; $27.500: 2nd time; $55,000: 3rd time. Landlords may also be ordered to reinstate the tenancy, refund rent, and/or pay attorney fees. Landlords have only 14 days to appeal City decisions.
Exemptions: Does not apply to owner occupied single-family dwellings or ADUs. Includes some exemptions for Federally Assisted Housing.
Limits the rights of rental housing providers to deny adding roommates to a current tenancy. Housing providers must accept “immediate family” (defined extremely broadly) and “additional residents” as occupants. If a tenant vacates the rental unit before expiration of the tenancy, family members and other additional residents may become parties to the rental agreement. Tenants must inform the landlord of each additional person’s name within the first 30 days of residing in the home and the provider can still screen incoming occupants using the same criteria as the original tenant, but new occupants have additional protections under a broad definition of “immediate family members” (includes spouse, domestic partner, former spouse, former domestic partner, adult persons related by marriage, siblings, persons 16 years of age or older who are presently residing together or who have resided together in the past and who have or have had a “dating relationship” -- meaning any social relationship of a romantic nature, and persons who have a parent-child relationship, including parents, stepparents, grandparents, adoptive parents, guardians, foster parents, or custodians of minors.)
Issues:
Mayor Jenny Durkan refused to sign the October 2019 ordinance (Ord 125950) because of “significant financial, legal and implementation concerns,” noting that it “greatly restricts any landlord’s ability to limit the number of persons who may occupy the premises.” (Her memo is included as an addendum in the ordinance.) City council was able to override this by majority vote and it became law.
Creates far greater risk for small housing providers by removing control over which adults reside on their property, essentially enabling squatters’ rights versus manageable-risk landlord/tenant relationships (e.g., if tenant vacates, landlord retains legal responsibility for housing non-tenant occupants).
Because landlords must follow careful laws re: communicating/coordinating with all adult occupants before being able to perform maintenance/repairs/inspections, this law causes unmanageable risks and complexity following initial lease signing. (If a small landlord screens an applicant or set of applicants and signs a lease, after move-in the original tenant could move out and additional adults who did not participate in the initial application process could also move in unknown to the owner and gain rights to the lease, a stressful and potentially unwieldy scenario for small landlords.)
The law’s vastly broad definition of “family” is far greater than the definition of “family” that property owners are allowed to apply to themselves under “Just Cause” terms (applicable when a landlord wants to end a month-to-month lease or remove their rental property rental from the market). The legal concept of “family” should be universally applied, not defined in different ways for different landlord/tenant populations.
Exemptions: Does not apply to Federally Assisted Housing (but does apply to small mom-n-pop operators!)
Relieves tenant from liability for damage to landlord’s property if caused by domestic violence, sexual assault, unlawful harassment, or stalking.
Mayor Jenny Durkan refused to sign the October 2019 ordinance (Ord 1259501) noting that the landlord “could theoretically pursue the abuser for the damages, but it is unlikely that they will have the actual ability to do so, and the mitigation fund is designed to not fully compensate a landlord for the losses they experience.” City council was able to override this by majority vote and it became law. The city’s landlord mitigation fund and mechanisms created are inadequate to compensate landlords, especially small owner/operators. The law only allows landlords paying more than $500 in property damage costs to apply and it caps reimbursement at $1,000.
Limits the amount of charges for security deposits and non-refundable move-in fees (e.g., cleaning fees, pet fees), and gives tenants the right to pay security deposits and non-refundable move-in fees in monthly installments (landlords are not allowed to require payment prior to move-in).
By uniformly applying to all tenants, and combined with the First-in-Time law, this law curtails the flexibility small landlords used to have to accommodate applicants with unique or less competitive financial backgrounds. It opens up small landlords to greater risk from tenants who do not have resources to manage housing costs for the level of rent (to consistently make rent on time) -- if tenants do not have enough savings buffer to pay reasonable deposits/fees up front, how will they handle other setbacks that may occur after move-in? This becomes significant increased risk/liability for small landlords.
Exemptions: Does not apply to a tenant who rents a housing unit in an owner-occupied single-family residence.
Requires that landlords allow tenants to pay last month’s rent in extended installments, rather than prior to move-in.
For leases of more than 6 months, tenants may elect to pay last month’s rent in up to 6 monthly installments; for shorter leases, tenants may pay last month’s rent in up to 4 installments. Landlords are not allowed to charge any additional fee or interest.
Exemptions: Does not apply to a tenant who rents a housing unit in an owner-occupied single-family residence.
- Winter Eviction Ban (SMC 22.206.160), February 2020.
Provides a defense against any eviction that would result in a moderate-income resident having to vacate a rental unit between December 1 and March 31.
Calling it fundamentally flawed, Mayor Durkan returned the bill to city council unsigned, but allowed it to become law. One of the first of its kind in the nation, the law applies to tenants at or below the area’s median income who miss rent payments or are accused of violating other lease terms (but not to tenants who engage in criminal or nuisance activities).
Exemptions: Rental units owned by housing providers with four or fewer rental units in Seattle are exempt. (This is one of the only laws that exempts small landlords, something city council should consider for a suite of other laws, to ease risk and financial/legal burdens and promote expansion of small landlording in Seattle.)
Calling it fundamentally flawed, Mayor Durkan returned the bill to city council unsigned, but allowed it to become law. One of the first of its kind in the nation, the law applies to tenants at or below the area’s median income who miss rent payments or are accused of violating other lease terms (but not to tenants who engage in criminal or nuisance activities).
Exemptions: Rental units owned by housing providers with four or fewer rental units in Seattle are exempt. (This is one of the only laws that exempts small landlords, something city council should consider for a suite of other laws, to ease risk and financial/legal burdens and promote expansion of small landlording in Seattle.)
assuming the mayor ends her emergency proclamation on the same date as the governor ends his.
For more than one year, during the pandemic, provides a defense to any evictions for nonpayment of rent if the eviction would result in the tenant having to vacate the housing unit, including a period of six months after the termination of the Mayor's eviction moratorium. Property owners may not issue notices of termination or initiate eviction action unless there is an imminent threat to the health and safety of the community. Prevents tenants from incurring late fees, interest, or other charges due to late rent payments during the moratorium.
From mid March 2020 until June 2021, the State of Washington and City of Seattle have enacted and repeatedly renewed eviction moratoriums to mitigate impacts of the COVID-19 emergency and risks of exposure, spread and contraction of the virus. Unlike other states’ emergency declarations, in Washington, tenants have no requirement to prove or declare COVID-related impacts. The Seattle mayor's moratorium goes so far as to prevent an owner from moving back into their own home. In spring 2020, Seattle City Councilmember Kshama Sawant actively promoted “rent strikes,” encouraging tenants to withhold rent even if they were able to pay.
Seattle city council passed legislation extending the eviction moratorium for an additional half year after the end of the declared emergency (currently scheduled to end in June 2021). As of March 2021, local implementation of federal rental assistance funds (to help tenants pay past-due rent) has been extremely limited (narrowed by zip code, etc) and focused on larger providers, out of reach for most small landlords with non-paying tenants. This law prevents landlords from mitigating (removing) non-paying tenants who are causing serious nuisance and harassment issues for neighbors, pushing undue burdens onto other tenants.
Guarantees the right to legal counsel for any residential renter in Seattle facing eviction.
Seattle/King County already provides legal services for tenants via the Housing Justice Project and the Tenant Law Project. This law expands it as a right, but provides no legal support for low-income small landlords. It puts focus on eviction attorneys and litigation rather than mediation and rent subsidies. To qualify, renters only need to make a declaration that they could not afford a lawyer, ostensibly with no proof required. Small landlords who have no built-in legal teams then have to escalate their legal costs instead of receiving support for mitigation or “making things whole” (helping people pay their rental debts).
Housing providers may not decline to rent to anyone based on eviction history that occurred during or within six months after the end of the civil emergency proclaimed by Mayor Durkan in March 2020, unless it relates to an imminent threat of health or safety neighbors, the landlord, or the tenant's or landlord's household members.
This law pushes undue risk onto small landlords, preventing them from screening tenants based on recent rental history; instead of the government providing incentives or follow-up support for tenants who experienced evictions or housing hardships during Covid, it simply passes all the risk to housing providers. Penalties for failure to comply: $11,000 (1st time), $27.500 (2nd time) and $55,000 (3rd time).
Tenant failure to comply with a pay or vacate notice changed from three days to 14 days, in accordance with change to state law RCW59.12.030(3).
Owners may not evict month-to-month residential tenants without a court order and shall not attempt to evict or end tenancy unless “just cause” exists. Regardless of whether just cause exists, an owner may not evict a residential tenant if the landlord has not registered their unit with SDCI via the RRIO program. If the property owner, a member of the property owner’s family, or another resident on the property secures an anti-harassment order or order of protection against a tenant, this does not qualify as “just cause.”
The 18 reasons for just cause are strictly defined and include nonpayment of rent, noncompliance with lease terms, chronically late rent payments, the intention of the landlord to occupy the unit themselves or rent the unit to an immediate family member, owner seeks to do substantial rehabilitation; owner decides to sell a single-family dwelling, etc. (Note that nearly all of these just causes were suspended during the extended COVID emergency.) These provisions apply to all month-to-month leases, but not to fixed-term leases that expire. (Many landlords and tenants prefer fixed-term leases because they guarantee a set rent and lease terms for a specified period of time, allowing both landlord and tenant the ability to reliably plan and negotiate their needs and responsibilities.)
In the 2019 session of WA state legislature, the state Residential Landlord-Tenant Act (RCW 59.18) and unlawful detainer chapter (RCW 59.12) were amended to give residential tenants more time to respond to eviction notices, more notice of rent increase and other changes. City code was amended to be consistent with state law.
Changes include a minimum of 60 days’ prior written notice for rent increases of more than 10%.
Landlord must provide an up-to-date copy of Landlord Tenant Laws and Voter Registration information to any tenant or prospective tenant when entering into any new or renewal rental agreement.
For the past 5 years, landlord-tenant rules and required documentation have continuously shifted, causing ongoing administrative burden for small operators with little support from the city.
- Additional 2017-2021 landlord-tenant laws and municipal code changes include:
SMC 7.24.060 - Private Right of Action, 2017. If a landlord attempts to enforce unallowable provisions in a rental agreement, they are liable for penalties and damages.
SMC 7.24.110 - Retaliation Prohibited, 2016. Landlords are not allowed to retaliate against tenants or prospective tenants who exercise their rights (not allowed to refuse to provide a rental application or agreement, apply more onerous terms, increase rent, or misrepresent any material fact when providing a rental reference).
SMC 14.08.015 - Seattle Open Housing Poster, 2016. Failure to post a Seattle Open Housing Poster is subject to a fine of $125 for a first violation and a fine of $500 for each subsequent violation.
SMC 14.08.030 - Unfair Practices - Generally, 2016, 2018. Updates to detailed list of unfair practices that are considered discriminatory, including application of income screening criteria from Section 8 or other subsidy program.
SMC 22.902.120 - Evictions Only for Good Cause During Notice Period, 2019. No cooperative unit shall be sold or offered for sale if, in the 150 day period immediately preceding the sale or offer for sale, any tenant has been evicted without good cause.
Conclusion
Seattle Grassroots Landlords compiled this list to demonstrate the overwhelming “tsunami” of change that has crashed over small housing providers in the past 5 years (making it difficult for small providers to stay abreast of legal policies/responsibilities and manage greatly increased complexity and risk of the extensively changed regulatory landscape) and to spotlight the many new barriers for people hoping to become landlords, during an era when Seattle desperately needs expanded access to rental housing (not just large corporate apartment buildings). On top of all these changes, City Council is barreling ahead with an intense slate of additional landlord-tenant legislation in 2021 and beyond, none of which is based around any framework of collaboration with small housing providers.
City Council is treating mom-n-pops the same as deep-pocketed corporate businesses, diminishing options for renters and causing greater imbalance to our housing market. Seattle needs a new path forward in landlord-tenant policy-making.
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