Marius Grigoriu

Columbia Partners Real Estate

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4 New Laws That All Landlords and Tenants in Washington Should Know

June 7, 2019 By Marius Leave a Comment

State Capitol at Olympia, Washington
Courtesy The Tichnor Brothers Collection, https://www.flickr.com/photos/boston_public_library/8696750596/in/photostream/

By now, you may have heard that sweeping changes are coming to Washington’s Residential Landlord Tenant Act. There are a few headlines on the topic, yet there’s so little useful information about these reforms; all taking effect on July 28, 2019.

If you’re like me, you’re left with dozens of questions and frustrated about the quality of reporting on the topic. It’s vital for landlord to understand changes in rules, and there are a lot of big changes in 2019; especially for landlords in Tacoma where laws changed in February.

Tenants should understand these changes too. Beyond calling out crooked landlords, the new laws spell out what tenants should do if facing a housing crisis.

But if the reporting on the topic is so weak, how would one educate themselves on the matter?

The best way is to go to the source. Washington State Legislature provides great resources to discover which bills affect our Residential Landlord Tenant Act (RCW 59.18). You don’t need to hold a Juris Doctor or pass a bar exam to understand this site. Look up each bill individually and read the House or Senate Report. The reports are easy to read summaries that provide lots of detail.

Notes on what is changing

Below are my notes for personal reference. I’m not offering legal advice; go talk to your attorney for that. I’m just being open about my understanding on the topic.

Senate Bill 5333 Uniform Parentage Act
Amendments made to RCW 59.18 by this bill are not relevant to the primary concerns between landlords and tenants. Not much to say.

Senate Bill 5017 Uniform Unsworn Declarations Act
Nothing terribly interesting here either.

House Bill 1138 Termination of Tenancy–Armed Forces Exception
This bill limits which situations would allow someone in the armed forces to terminate their lease early. Those situations are a permanent change in station or deployment, plus some additional criteria.

House Bill 1462 Landlord Notice to Tenant–Demolish, Rehabilitate, or Change Use of Residential Property
Landlords that plan to demolish, change use, or substantially renovate a property will need to give 120 days notice to month to month tenants. “Change use” means a change to how the property is used that causes displacement of tenants; owners and their immediate family who wish to move in are exempt. “Substantially rehabilitate” means a project that requires a permit and displaces a tenant.

What’s the rationale here? Permits take a long time to get no matter what. Thus, builders can give tenants more time to find another place to live while waiting for the permit.

House Bill 1440 Landlords–Notice of Rent Increases
This one’s simple. 60 days or longer notice required when increasing rent by any amount. Rent cannot go up in the middle of a rental period. This does not apply to subsidized rents that adjust with factors such as income or other circumstances.

Senate Bill 5600 The Big One

  • Notices to pay or vacate go from 3 to 14 days and must use a standard notice provided by the state, available in the top 10 languages spoken.
  • Payments must be applied to rent before any other charges.
  • Right to possession may not be conditioned upon payment of any monetary amount other than rent. (No 10-day notice for failure to pay late fees or for not paying the repair bills for damage.) Landlords must pursue other lawful remedies, such as judgements or collections.
  • “Rent” means any recurring or periodic charges for the use and occupancy of the premises, including utilities. Late fees, damages, deposits, and legal costs are expressly called out as not rent.
  • “When, at the commencement of the tenancy, the landlord has provided an installment payment plan for nonrefundable fees or deposits for the security of the tenant’s obligations and the tenant defaults in payment, the landlord may treat the default in payment as rent owing.”
  • Tenants found liable for unlawful detainer may reinstate tenancy by paying, within 5 days of judgement, rent due, late fees up to $75, attorneys fees, plus $50 for each prior reinstatement in the last 12 months. The writ of restitution may not be executed by the Sheriff until these 5 days elapse.
  • Tenants may motion to stay the writ of restitution and the court can apply judicial discretion in a way that is fair to both sides based on:
    • Whether tenant’s default on rent was intentional
    • Payment history
    • Ability to pay the judgement in a timely manner
    • Whether nonpayment was cased by circumstances beyond tenant control and unlikely to recur
    • Whether the tenant is otherwise in substantial compliance with the lease
    • Hardships faced by the tenant if evicted
    • Other notices in the last six months
  • Tenant has the burden of proof to be granted relief, and is ineligible if served with 3 or more notices to pay or vacate in 12 months prior to the current one.
  • A stay of restitution includes a payment plan that requires payment of one month’s rent in the first five days. If the stay is longer than 30 days (up to a maximum of 90 days) one month’s rent must be paid in the first 30 days and tenant must be fully caught up by the end of the payment plan.
  • Depending on whether the stay is granted after the 15th, the next month’s rent may also be included as part of the payment plan. After that tenant must stay current on rent payments.
  • If the tenant defaults on the payment plan, they have 3 days to correct before the Sheriff executes the writ of restitution. Three day notice stating such must be given.
  • Incomplete payments on the payment plan don’t delay the process unless there is both a written agreement AND the tenant notifies the Sheriff.
  • The Landlord Mitigation Program is expanded to reimburse claims from unlawful detainer where judicial discretion is sued and there is unpaid judgement.
  • The summons form for an unlawful detainer is more informative to tenants.
  • If landlords use alternative service of process, they must declare that the tenant could not be found and due diligence has been performed by attempting personal service three or more times over the last two days and at different times of day.

So What?

In my humble opinion, much of the hype around these laws are overblown. This isn’t the end of the world for landlords, and it won’t make a dent in the homelessness problem faced by Seattle, Tacoma, or anywhere else either.

Any landlord worth their salt already works with their tenants who fall on hard times, giving them more than three, heck often more than 14 days to get back on their feet or work with an agency to receive rental assistance. Payment plans are already commonplace. These landlords recognize that nobody can move in three days, and taking a cooperative tenant to eviction court is a big waste.

Uncooperative tenants are the ones who most often end up in court and these bills don’t change that.

I see the primary role of these bills as a minimum standard that forces crummy landlords to work with their tenants a bit longer. Unfortunately, landlords with toxic tenants have to wait a bit longer.

There’s a silver lining and that’s the expansion of the Landlord Mitigation Program, assuming it receives sufficient funding. Good luck collecting back rent or damages if it ever comes to taking a tenant to court for an unlawful detainer. The Landlord Mitigation Program gives landlords a chance to get whole again.

It is disappointing that for all the talk about the homeless crisis, these bills don’t do anything to address the big drivers of the problem. I’m not talking about affordability. I’m talking about mental health problems, drug abuse, and recidivism in those released from incarceration.

Predictions

Landlords that used to give tenants until mid-month before taking action will likely eliminate grace periods, issuing 14 day notices to pay or vacate on the second of the month. Don’t interpret this as landlords being more aggressive, but rather that little will change for this group.

Late fees and damage done to units will be nigh impossible to collect, especially in the lower half of the market. It’s likely that we will see landlords attempt to tighten screening criteria, increase deposits, and increase rent to compensate in most segments of the market, except for possibly at the very bottom where tenants receive heavy subsidies.

High risk tenants will continue to have trouble finding any housing, not for lack of subsidies or affordability, but simply due to the fact that landlords are afraid to rent to them.

Tenants that experience a life issue rendering them temporarily incapable of paying rent, who also have landlords that don’t understand the art of working with their tenants, can experience a true benefit if and only if they have the wherewithal to pursue rental assistance. That said, I believe we may actually see a small uptick in number of unlawful detainer cases filed in court.

Filed Under: Blog, Investment Property

Don’t Let Tacoma’s New Landlord-Tenant Law Catch You By Surprise

December 9, 2018 By Marius 1 Comment

Tacoma City Council has been working on stricter Landlord-Tenant laws in response to the highly publicized mass eviction at the Tiki Apartments during the spring of 2018, where a local developer acquired a mismanaged, low-end apartment complex with the intention to renovate and add value. Residents of all 58 units received notices to vacate with a relocation benefit of $900 if the tenants moved out in time.

Tacoma’s stated goals for the new legislation are:

    • More proactive approaches to prevent increases in the homeless population
  • Better protections for tenants and provide specific guidance to landlords

Ordinance 28559 was finally passed into law on November 20, 2018. Here are the changes you should know about:

  • Prospective tenants shall receive a link to a Tacoma web page that publishes information about the landlord’s code violations and settlements related to housing discrimination.
  • Distribute information on tenant rights and responsibilities to new tenants at inception of tenancy and lease renewal. Existing tenants must also receive this information, and landlords are to collect signatures that the information was delivered. Updates should be delivered to tenants within 30 days of the City publishing changes.
  • Tenants may request to pay move-in expenses in installments if fees exceed 25% of the first full month or if last month’s rent is required. Landlords must agree to three installments over the course of a three-month or longer tenancy; two installments for two-month and month to month tenancies.
  • Notice for no cause termination raised from 20 days to 60 days.
  • 120-day notice to vacate when the owner plans to demolish, renovate, rehabilitates, or change the use of the property. Relocation assistance must be provided for qualifying households.
  • City of Tacoma has the power to set fines for certain violations of landlord-tenant law
  • Notice to raise rent has increased from 30 days to 60 days, effective December, 7 2018
  • All other parts of this law are effective February 1, 2019

As a Tacoma landlord, I don’t expect this will shake things up too much for us. For example, we already work with tenants on installments if required.

Other landlords may find that the installment plan for move-in deposits increases the risk of loss if a tenant damages the unit in the first few weeks of tenancy. If that’s true, that could lead to landlords raising the standards on their tenant screening criteria, creating even more scarcity of affordable housing.

The biggest impact is to developers who acquire properties to significantly rehabilitate and add value. They will need to factor in the expense of additional time before they can start their project and relocation assistance payments. This won’t stop developers. Rather these costs will be baked into their project plans and would result in either lower offer prices to existing owners, higher rents/sales prices after renovation, or both.

Remember: Seek the advice of a landlord-tenant attorney and read Tacoma’s Rental Housing Code for yourself for the full details on what’s new.

Image by Rob Bixby

Filed Under: Blog, Investment Property Tagged With: landlord-tenant law, Tacoma

Just Listed: 4415 38th Ave S

July 29, 2016 By Marius

This is a big occasion. The renovation project has finally come to a close and the listing is now live! Check out the photos I took and visit the official website for more info!

Filed Under: Blog

Buyer’s Process Infographic Refreshed

July 11, 2016 By Marius

Old infographic
Old infographic

 

Infographic showing the home buying process
New infographic

 

My old infographic served my clients and me well, but I now have a new one that is much more readable and colorful. Check out: The Home Buying Process

Filed Under: Blog

Are there any deals left in the Seattle real estate market?

February 24, 2016 By Marius

We all know that housing prices in Seattle have gone up a dramatic amount in the last several years.

Home buyers are happy once they close a deal, but rising prices can cause a lot of stress along the way.

And renters see no relief in sight thanks to landlords raising prices with each lease renewal.

For some, it’s unbearable.

A larger chunk of my clients are now looking at fixers. Common sense tells us that fixers will be more affordable, but what I want to find out is how their prices compare to homes at various levels of (dis)repair.

Median Price by Condition

The chart shows us median prices of houses in Seattle over the past several years. All types of homes went up in price, but the largest appreciation has been for homes in good condition or better. A few caveats about the data. This was sourced from NWMLS listings and the categories are an optional, subjective interpretation of the listing agent, so the categories, especially the one labeled “Fair” have some variation within them.

 

Northwest Seattle–Ballard, Fremont, Wallingford, Crown Hill, Greenlake, Greenwood, and so on–continues to be my number one most requested set of neighborhoods so I wanted to take a special look at that area to see how it compares to Seattle as a whole.

Screen Shot 2016-02-24 at 10.40.50 PM

This tells a very clear story. Fixed up homes command a significant price premium over homes in average or worse condition and the gap is widening.

 

So, yes deals are still available if you’re willing to buy a home with some flaws.

Filed Under: Blog

86 problems appraisers look for and what to do about it

November 19, 2015 By Marius

Plumbing under kitchen sink just needs to be reset.
Plumbing under the kitchen sink needs to be reset. Lender won’t fund the deal until it’s fixed.

You’ve applied for a home loan, and suddenly, half-way through the process the lender gives you a list of repairs they want made before they fund the deal. Sometimes these repairs are trivial, even silly. But sometimes they will cost thousands. What just happened?

[Read more…]

Filed Under: Blog

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About Marius Grigoriu

Not your ordinary real estate agent. I have a long history in tech, and I invest my own capital; buying, fixing, and selling my own homes. I realized, after signing many real estate contracts, that I could share my experience with others. I ignore the high pressure playbook that other agents use and instead pay attention to my clients.

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