Residential Rental Agreements & Issues Just the FAQs

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1 From the Business and Real Estate Groups Do You Own Rental Property? What Laws Apply? In Washington, the laws that apply to the relationship between landlords and renters (tenants) are found in the Residential Landlord-Tenant Act (RCW 59.18) ( RLTA ). The RCW stands for the Revised Code of Washington, which is the law of the State of Washington. In addition to the RLTA, landlords should familiarize themselves with all city codes and ordinances. For example, if you re a landlord in Seattle, then the Seattle Landlord-Tenant Law also applies. Specific Seattle City Ordinances impose additional regulations on a Seattle landlord, including a prohibition on increasing rent by 10% or more in a 12-month period, the prohibition on discriminatory and retaliatory practices, the inspection and notice requirements when converting an apartment building into condominiums, and compliance with the Seattle Housing and Building Maintenance Code. It is important that you familiarize yourself with the rules that landlords are required to follow under the Washington State Residential Landlord-Tenant Act and Seattle Landlord-Tenant Law. When Doesn t the RLTA Apply? The RLTA generally does not apply to renters of space in a mobile home park; guests in hotels and motels; residents of public or private medical, religious, educational, recreational, or correctional institutions; residents of a single family dwelling which is rented as part of a lease of agricultural land; residents of housing provided for seasonal farm work; tenants who lease a single family dwelling under an attorneyapproved option to purchase; tenants who are employed by the landlord; exempt tenants; and tenants who use the rental property for commercial and not residential purposes. Issues Before You Rent What Type of Rental Agreement Should You Choose? There are two main types of rental agreements that you can enter into with your tenant: 1) a month-to-month rental agreement or 2) a lease. A month-to-month rental agreement does not have a fixed time limit and the rental period continues until either you or your tenant provides proper notice to end the rental agreement. Under a month-to-month rental agreement, your tenant is expected to pay rent on a monthly basis. Because of the nature of a month-to-month rental agreement, you as the landlord have some flexibility to change the terms of the rental agreement, including increasing the rent or rules, as long as you give written notice of the changes to your tenant 30 days in advance. A lease is a written rental agreement that gives the tenant the right to stay on the rental property for a specific amount of time in exchange for the payment of rent. Unlike a month-to-month rental agreement, you cannot change the terms of the lease unless your tenant agrees to the changes.

2 Does My Rental Agreement Need to be in Writing? It depends on which type of rental agreement you use. If you are using a month-to-month rental agreement, you can enter into it verbally with your tenant. However, if you are requiring a security deposit (see topic below), then the month-to-month rental agreement needs to be in writing. A lease must always be in writing. Does My Lease Need to be Recorded? No, a lease does not need to be recorded in the county s real property records department. Your lease with the tenant is not invalid or unenforceable just because it is not recorded. Does My Lease Need to be Notarized? If your lease is for a term that is longer than one (1) year, your lease needs to be notarized by a notary public. You will also need to include the accurate and full legal description of the rental property in the lease. Failing to notarize your lease for a term of longer than one (1) year may affect the validity of the lease. Language: Lessor or Landlord? Lessee or Tenant? You may find that there are several terms for the property owner. A property owner is called the landlord or lessor. The person who you are renting to is called the tenant or lessee. What Fees Can I Charge Before Renting to the Tenant? You may collect up to six different types of fees or deposits before renting to a tenant: A screening fee A damage deposit A cleaning fee A security deposit The last month s rent paid in advance An application or holding fee If I Charge a Screening Fee, What Procedures Must I Follow? As a landlord, you are allowed to check a potential tenant s past rental history, eviction history, credit history, and even a criminal background before you agree to rent the property to the tenant. If you decide to run a screen on the potential tenant, you are required to inform him or her in writing. Can I Reject a Potential Tenant Based on What I Find in the Screening Process? Yes; if you decide to reject a potential tenant based on the screening, you are required to inform him or her in writing of the reasons for the rejection. If I Charge a Security Deposit, What Procedures Must I Follow? If you require a security deposit, you are legally required (in addition to entering into a written lease) to provide the renter with a receipt for each deposit, a checklist or statement describing the condition of the rental property that both you and your renter must sign before the rental period begins, and a statement of the name and address of the bank or escrow company where the security deposit is being kept. After the rental period ends, you are required to follow a specific procedure in returning or keeping all or part of the security deposit. Our office can provide you with a Rental Conditions Checklist at no charge.

3 Can I Keep All or Part of the Security Deposit? If your tenant owes you back rent or if there is damage to the rental property, you are allowed to withhold from the security deposit the exact amount of back rent owed or the exact amount it would cost to repair the damage. If the back rent owed or the repair costs exceed the security deposit amount, you can sue your tenant. Can I Keep All or Part of the Security Deposit for Normal Wear and Tear? No; you are not allowed to withhold any security or damage deposit to pay for routine upkeep or for normal wear and tear. Normal wear and tear includes worn out carpeting, chipped paint, worn out finish on wood floors, or faded or dingy paint. These are just some examples of normal wear and tear. You can, however, withhold from the security or damage deposit the cost of fixing damages that are beyond normal wear and tear. Some examples of damages beyond normal wear and tear include broken windows, holes in the walls, leaving trash or other items on the rental property that need to be thrown away, or leaving the rental property so dirty as to render it unhealthy or unsafe. When Must I Return the Security Deposit? After the tenant has moved out, you have 14 days to return the security deposit or, if back rent or damages are owed, you must provide a written letter telling your tenant why he or she is not receiving all or any of the security deposit back. Other Fees You may charge a cleaning fee that will be used to pay the cleaning costs after your tenant moves out. You may also designate that this cleaning fee is non-refundable meaning that no matter the condition of the rental property left by the tenant, you are allowed to keep the entire cleaning fee. You may also charge a potential client an application or holding fee. Be aware, though, that if you charge this application or holding fee, you are guaranteeing that you will not rent the rental property to another person. You may provide in your lease that if the potential tenant changes his or her mind, that you are entitled to keep the entire application or holding fee. If the potential tenant does move in, you are required to apply this application or holding fee to either the security deposit or the first month s rent. What About a Pet Fee or Pet Deposit? Can I Have a No Pets Rule? You may charge a pet fee or a pet deposit that is used to cover special cleaning required after the rental period ends. You also can either prohibit pets entirely ( No Pets Rule) or establish your own rules and restrictions relating to pets on the rental property. Make Sure You Make the Distinction between Deposits and Non-Refundable Fees Fees designated as non-refundable will not be retuned to the tenant under any circumstances. If you decide to charge a non-refundable fee, you must have a written rental agreement and must clearly state that the fee will not be returned. You may not legally call a non-refundable fee a deposit. If I Charge Last Month s Rent, What Does It Apply To? If you decide to require that your tenant pay last month s rent in advance, it cannot be used for anything but payment of rent for the last month of the tenancy. This charge is not technically a deposit, so you cannot use it or keep it for damages.

4 Issues During the Tenacy What Are My Responsibilities as the Landlord? Under the RLTA, you as the landlord are responsible for: Maintaining the rental property so it does not violate state and local laws that protect the tenant s health and safety Fixing damage to structural parts of the rental property (chimney, roof, floors, other parts) Making repairs except if damage is caused by normal wear and tear Providing fixtures necessary to supply heat, electricity, and hot and cold water Fixing electrical, plumbing, and heating systems if they break Making repairs necessary to make the rental property weather-tight Providing working smoke detectors Providing working locks and keys to the rental property Providing your tenant with your name and address or the name and address of your agent Keeping shared or common areas reasonably clean and safe Making sure the rental property is not infested by any insects, rodents, or pests Fixing other appliances that come with the rental property Setting water heaters at the required temperature when a new tenant moves in Providing receipts to tenant of their rental payments especially if rent is paid in cash New Carbon Monoxide Requirements Starts on January 1, 2013 Under the State Building Code Act (RCW 19.27), all rental properties in Washington must be equipped with carbon monoxide detectors. These detectors, as the name implies, are designed to detect carbon monoxide, a toxic gas that is colorless, odorless, tasteless, and initially non-irritating. Even if a rental property does not have a carbon monoxide source such as a garage or fuel source, all landlords must install one or more carbon monoxide detectors. Like smoke alarms, once installed, the burden shifts to the tenant to maintain. What Are My Tenant s Responsibilities? Under the RLTA, your tenant is responsible for: Paying rent and his or her utility bills Keeping the rental property clean and sanitary If caused by tenant, paying for the fumigation of pest infestations Following city, county, and state regulations Disposing of garbage properly Properly using the plumbing, electrical, and heating systems Restoring the rental property in the same condition as when he or she moved in, except for normal wear and tear What Is My Tenant Prohibited From Doing During the Tenancy? Under the RLTA, your tenant is prohibited from: Engaging in or permitting any gang-related activity on the rental property If in a mult-tenant property, causing a nuisance or interfering with another tenant s use of his or her rental property Permitting damage to the rental property Engaging in or permitting any drug-related activity on the rental property Allowing excessive garbage to collect in or around the rental property

5 What Other Restrictions Can I Add to a Lease? Generally, you can include any rules and regulations you want to impose on your tenant while on the rental property. But you should be aware that certain rules, regulations, and provisions are illegal under Washington law. What Actions and Provisions Are Illegal? There are certain actions and provisions that are illegal under the law. For instance, you are not allowed to lock the tenant out of the rental property. That means you cannot change the locks, add new locks, or prevent your tenant from entering the rental property, even if your tenant is behind in the rent. You are also prohibited from shutting off the utilities to the rental property or intentionally failing to pay the utility bills, even if your tenant is behind in the rent. If your tenant takes legal action against you, you are not allowed to retaliate against his or her by raising the rent, reducing services, or evicting him or her. Other Illegal Provisions in a Rental Agreement Include: Requiring your tenant to waive any right given to tenants under the RLTA Requiring your tenant to pay for your attorneys fees under any circumstances if a dispute goes to court Requiring your tenant to agree to a specific arbitrator at the time of signing the rental agreement Requiring your tenant to surrender his or her right to defend themselves in court Allowing yourself to take your tenant s property (unless he or she has abandoned the rental property) Limiting your liability in situations where you would normally be responsible Allowing yourself to enter the rental property at any time without proper notice Requiring your tenant to pay for all damages to the rental property, even if not caused by him or her (or guest) What Procedures Must I Follow when Repairs Are Requested? When you receive notice from your tenant about a problem, you have a certain number of days to begin to make the repairs. The amount of time you have depends on the problem. If there is an issue with hot or cold water, you must begin the repair within 24 hours of notice from your tenant If there is an issue with heat or electricity, you must begin the repair within 24 hours of notice from your tenant If there is a life-threatening problem, you must begin the repair within 24 hours of notice from your tenant If the refrigerator, stove, oven or major plumbing fixture is broken, you must begin the repair within 72 hours of notice from your tenant For all other repairs, you must begin the repair within 10 days of notice from your tenant When Can I Enter the Rental Property during the Tenancy? You must give your tenant at least two (2) days written notice before entering the rental property. The notice must state the date and time of entry and must include a phone number where the tenant can reach you to object to the entry date or time or to reschedule. If you want to show the rental property to a prospective tenant, you only need to provide one (1) day written notice. In the case of an emergency or abandonment, you may enter the rental property without any notice.

6 I m Thinking of Selling the Property... What Must I Tell My Tenant? While you are free to sell your property at any time, be aware that the sale doesn t automatically terminate the rental. If you sell, you must provide your tenant with the name and address of the new owner. This notice can be: 1) personally delivered to your tenant or 2) mailed to your tenant and posted on the rental property. If there are tenant deposits, all deposits must be transferred to the new owner. The new owner must put all tenant deposits into a trust at a bank or escrow account and notify the tenant of the name and address of the new bank or escrow company. For landlords with a single-family dwelling unit located in Seattle, your tenant is entitled to at least 60 days prior written notice of the sale. My Property is Being Foreclosed on What Do I Need to Do? Going through a foreclosure is stressful enough, but there are specific requirements that you must follow if there is a tenant on the rental property. Under Washington state law, the foreclosing party must provide the tenant with written notice that the property may be sold 90 days or more after the date of the notice at a foreclosure sale. Before the new owner can evict your tenant from the rental property, he or she must provide the tenant with 60 days notice before the eviction is scheduled. As the previous landlord, you must either refund any tenant deposits or transfer the deposits to the new owner after the foreclosure. If you fail to refund or transfer the deposits, you may be liable to your tenant for twice the amount of the deposits and attorneys fees. Ending the Tenancy and Issues After the Tenacy What Notices are Required for Terminating or Ending the Lease? In a month-to-month agreement, your tenant is required to inform you that he or she is moving out. The tenant should provide you with written notice of his or her intent to move out and this notice should be provided to you at least 20 days before the end of the rental period. The end of the rental period is the day before the next period s rent is due. There are specific exceptions to this notice requirement for tenants who are victims of assault or domestic violence or those tenants who are members of the Armed Services. In a lease agreement, the terms usually dictate when, and if, your tenant needs to provide you with any notice that he or she is moving out. If your tenant remains on the rental property after the lease term ends and you accept the rent payment for the next month, then your lease agreement becomes a month-to-month agreement. Now all the rules that apply to month-to-month agreements apply to this tenancy. Can the Tenant Terminate the Rental Agreement Without Proper Notice or Before the Rental Period Ends? Under a month-to-month rental agreement, if your tenant fails to provide you with sufficient written notice in advance, he or she is responsible for rent for the month after he or she moves out or rent for 30 days from the day you learn that he or she has moved out, whichever occurs first. Once you find out that your tenant has moved out without providing you with proper notice, you are required to try to rent out the rental property as soon as possible. Under a lease Agreement, if your tenant terminates the lease early, he or she is responsible for paying the lesser for: All the rent that would be owed for the remainder of the lease; or If you were able to re-rent the rental property, all the rent that was owed before you were able to re-rent the rental property plus the difference between the rent agreed in the lease and the new rental amount, and all actual costs you incurred to re-rent the rental property, including court costs and reasonable attorneys fees.

7 What are the Grounds to Evict my Tenant? There are several reasons you can force your tenant to move out: Tenant fails to pay rent or is late in paying rent Tenant uses the rental property for drugrelated activity Tenant engages in an activity that creates an imminent hazard to the physical safety of other persons on the rental property Tenant breaches the terms of the rental agreement and fails to fix the breach within the statutory timeframe Tenant engages in gang-related activity Tenant physically assaults another person on the premises or uses a firearm or other deadly weapon Some cities have "Just Cause Eviction" ordinances that limit your ability to evict a tenant under these grounds. Contact us for details. What do I Need to Do to Evict my Tenant? Before you can take legal action to evict your tenant, you must first give notice that complies with Washington s Unlawful Detainer Law. If the tenant still remains on the property in violation of the notice, you should contact your attorney for assistance in going to court and filing an unlawful detainer lawsuit. This is the only legal way you can physically force a tenant to move out. You should also discuss with your attorney how to comply with the Just Cause Eviction Process in Seattle. The Tenant Abandoned the Rental Property and Left Behind Personal Belongings. Can I Just Throw His Personal Belongings Away? Abandonment occurs when your tenant has fallen behind in rent and clearly indicated by words or actions that he does not intend to continue living in the rental property. Once abandoned, you are allowed to enter the rental property and remove any personal belongings. However, you are required to store the personal belongings in a reasonably secure place. You are also required to mail notice to the tenant stating where his personal belongings are stored and when they will be sold. If you fail to follow the laws, you will be responsible for compensating the tenant for the loss of his personal belongings and paying his court costs and attorneys fees! We Can Help! The rules and requirements under the Washington Residential Landlord-Tenant Act, the Seattle Landlord Tenant Act, State Building Code, and the numerous city and county codes can be confusing. The attorneys at Helsell Fetterman LLP can help you whether you re drafting your first or updating your existing written lease agreement. To learn more, contact our attorneys in our Business and Real Estate groups. Helsell Fetterman LLP Seattle 1001 Fourth Avenue, Suite 4200 Seattle, WA Bellevue NE Fourth Street, Suite 2300 Bellevue, WA