Tacoma City Council increases oversight of private rental properties
Tacoma City Ordinance 28559, the "Tenant Rights Code," was enacted by the City Council in November 2018. The code applies to all effectively all rental properties in the city of Tacoma. It's primary requirements include:
1. 120-day notice requirement for removing tenants to rehabilitate or demolish the rental property. At least 10 days before the 120 notice a meeting must be had after at least 7 days notice. Thus at least 120+10+7=137 days minimum notice will be required. A "Tenant Relocation Assistance Information Packet" and compliance with the Tenant Relocation Assistance requirements is also required. Note that a change in the ordinance provides that a tenant who receives a 120-day notice can request an in-person meeting which must be held within 20 days of such request.
2. 60-day notice to vacate instead of traditional 20-day notice to vacate. One would think that this only applies to month-to-month leases, but the ordinance is not nearly as clear on this as it should be. Landlords should consider notifying even 1-year tenants at least 60 days in advance that the lease will not be renewed.
3. 60-day notice to increase rent. A lease that contains agreed-upon "rent increases" during the term is acceptable. Remember that residential leases generally cannot exceed one year in duration.
4. Requirement that Landlord distribute city materials to tenants.
5. Requires installment payments for fees and deposits instead of requirement of payment at start of lease.
6. The Director of the City of Tacoma Neighborhood and Community Services Department is given broad rule making authority to enforce the Tenant's Rights.
December 7, 2018: 60-day notice requirement for rent increases
February 1, 2019: Everything else
Relocation assistance for remodeling:
When a tenant is low-income and "displaced" due to "substantial rehabilitation" or demolishing a rental property the landlord is obliged to pay for the tenant up to $1,000 of relocation assistance. The City pays an additional $1,000. Failure of the landlord to comply is a defense to an eviction proceeding.
Demolishing includes relocating a dwelling unit to another site.
Displacement includes "change of use" such as change from rental to owner-occupied. It does not include temporarily moving a tenant to another unit in the same building with the tenant's consent or temporarily relocating a tenant for less than 72 hours. The latter is likely in the case of short term emergency repairs.
Fines for noncompliance:
non compliance results in sizable fines ranging from $250 per day to $1,000 levies. For example, a landlord that fails to distribute information required under the ordinance will be assessed a $500 for the first offense (per affected unit), and subsequent failures to distribute will result in a $1,000 fine for not giving disseminating the required information to tenants regardless of whether the tenant suffers any harm from not having the information.
The fines, in some circumstances are "$1,000 per day" and not "up to $1,000 per day." However, the Director does have the authority to reduce or waive in the landlord comes into compliance within three calendar days of the notice "or shows that its failure to comply was due to reasonable cause and not willful neglect." Yet a willful violation is itself an additional minimum $1,000 fine.
Who can sue?
The City itself can enforce, but so can an individual tenant.
Distribute City materials
At the time of application a landlord must provide prospective tenants with:
1. Landlord's written rental criteria
2. City of Tacoma informational website (not presently available as of 12.15.2018 contact city for further details).
3. (apparently) Washington State Secretary of State website address for registering to vote or change address. That address is: https://www.sos.wa.gov/elections/register.aspx. The ordinance is written to require this, but it is anticipated that the Tacoma informational website will eventually include this.
4. No internet? No problem. If the tenant does not have internet access and requests the information then the landlord must print a paper copy of the "property and landlord information that can be found on the website identified above." The use of the phrase "identified above" is poor drafting and references the, presumably, Tacoma City informational website.
Distribution to actual tenants. In addition to distribution required for prospective tenants there are additional materials to be submitted:
1. City information packet summaries of various laws. Unfortunately, it isn't known how accurate these summaries will be. The code expressly indicates that the city is not liable for misstatements contained in the summaries. The landlord is to distribute these at the time a rental agreement is offered including renewals. This includes oral rental agreements.
2. For existing tenants within 30 days of the summaries being made available by the City landlords must distribute a paper copy to current tenants. A signature of the tenant acknowledging receipt is required. If a tenant refuses to sign a declaration of such must be drafted indicating when and where the information was provided to the tenant. Subsequent updates from the City may be provided in electronic form unless the tenant requests paper copies. Note: The code indicates that a tenant may request "written summaries." This appears to be another example of poor drafting from the City.
3. A landlord is required to provide a copy of a "resource summary" that the City will prepare to any tenant that is being provided a notice under RCW 59.12.030 (e.g. 3 day notice to vacate, 20 day notice to terminate, 10 day notice to cure). This is a substantial change in normal procedures. If you are a landlord be sure even your attorney is reminded of this change if he or she is arranging the eviction notice.
Installment payments for deposits, move-in fees etc.
Generally if a tenant requests in writing they may pay such deposits over installments unless the total amount of the security deposit and nonrefundable move-in fees do not exceed 25% of the first full month's rent and payment of the last month's rent is not required at the "inception of the tenancy." No interest or fees permitted. Installment schedules must be in writing and signed by both parties.
If the term is 3 or more months then the security deposit, move-in fee, and last month rent may be in 3 equal consecutive monthly installments from the start of tenancy.
If the term is month to month then two equal installments with first at "inception of tenancy" and second payment on first day of the second month or period of the tenancy.
Failure to pay security deposit or similar is a breach of the rental agreement. The tenant can thereafter receive a 10-day notice to cure and "the entire amount of any outstanding payments shall become due when the next rent payment is due unless otherwise agreed to in writing." It isn't clear if "the entire amount of any outstanding payments" means that the rest of the installments are due or if just the missed installments.
The City has modified security deposit requirements
A security deposit cannot be collected unless the rental agreement is in writing and a written checklist exists describing "condition and cleanliness of or existing damages to" the property and furnishings. This checklist must include at least walls, floors, counter tops, carpets, drapes, furniture, and appliances" signed by all parties with a copy to tenant.
Remember that the security deposit must be placed into a trust account. The tenant must be notified where it is deposited as well. This is not a new law, but by being included in the Tacoma Code it is presumably subject to enforcement as a violation of the code.
There is a lot to take in. The City Counsel is attempting to take the lead in the addressing what it considers to be substantial injustices occurring in the rental housing market. It is responding in part to one large event that displaced many people, and trying to assist in stabilizing a market that can leave many, especially lower income, people in risk of becoming homeless.
The reach of this ordinance is extensive. It touches on most parts of the market. It has positive intentions, but may have serious negative consequences for landlords that own only a few properties and do not otherwise stay abreast of changes. The fines and penalties can be high, but it is also likely that the City will not necessarily seek such high fines and penalties initially. It is not worth risking the high costs on that possibility though.