Open Letter to Washington State Senator Kuderer

Dear Senator Kuderer,

I am writing to share concerns over SB 5600.  As I read the proposed language, I am struck by the extent to which it goes beyond protection of tenants rights, and instead fundamentally infringes upon property owners rights.

It seems as though the legislation’s authors envision landlords as fat-cat tycoons.  In my experience of managing properties for individuals in our state over the past 20+ years, that is far from the normal situation.  Most of the thousands of landlords that my office has and does represent have one to three rental properties that they have come to own.  Their concerns are breaking even as, although rents have been rising, they have not been rising in proportion to property values and the resulting properties taxes.  Nor have they been rising at the same pace as the costs of materials and labor to maintain their properties.  Most of the landlords we represent rely upon the regular collection of rent in order to be able to pay their properties bills in a timely manner.  When tenants are late with rent payments, it in turn causes Landlords to incur additional costs in terms of time, stress, potentially late fees of their own, and even adverse impacts on their credit.

So- to address those well-known realities, late fees have historically been negotiated into the leases that landlords and tenants agree to enter into.  Those fees are useful in both incentivizing tenants to pay their obligations in the manner they’ve contractually agreed to, and the late fees act to mitigate the costs that Landlords experience if tenants fail to meet their contractual obligations.  There are already laws in place that limit the late fees that landlords can collect to not be more than 10% of the rental rate for a given month.  This new legislation, which limits the late fees that tenants would have to pay in order to overcome an unlawful detainer judgment to just $75, actually incentivizes tenants to NOT pay the late fees that they are contractually obligated to pay then (in cases where the rent is either over $750/ month, or in cases that they’ve accrued late fees over multiple months that exceed $75).  Further, it removes the compensation that landlords should receive from tenants for the hardship that tenant’s failure to fulfill their contractual duty to pay rent in a timely manner causes to the landlords.

Of even greater concern is the concept this bill introduces that:  Even after a judge has determined that there is a valid basis for issuance of an unlawful detainer order, the judge should then subjectively consider factors outside the lease contract, such as whether or not an eviction cause the tenant a hardship, in letting that order be implemented.  I have never once witnessed an eviction that DIDN’T cause the tenant a hardship.  I’ve also never witnessed an eviction that wasn’t the result of hardship already caused to the landlord.  That’s the nature of evictions.  The language presented in this new bill would essentially take away a landlord’s ultimate remedy for a tenant’s failure to pay rent.  Other language implies that: if the tenant isn’t ‘willingly’ not paying the rent, than it isn’t the tenants fault, so the tenant shouldn’t be evicted.  Unless the legislature is willing to extend that protection to landlords from their mortgage holders, you’ll simply have grown the problem from an eviction to instead be a foreclosure.

Criminal law necessarily considers intent; contract law reasonably doesn’t typically consider intent.  A party either fulfills a contractual duty, or they don’t.  The reason that’s reasonable is that there are two equal sides to a contract, and just because one party may have had ‘bad luck’ (circumstances beyond their control), it doesn’t mean that the other party was in any way responsible for that bad luck.  This legislation attempts to make Landlords the victim of their tenants bad luck.  To open pandora’s box by asking judges to know why a party didn’t fulfill a duty is to invite arbitrary, discriminatory, and inconsistent outcomes.  The further result will be to increase the costs that landlords have to factor in when arriving at what rent they can afford to charge.  So- it will chase landlords out of the market, make them more restrictive of the tenants they will rent to, and cause them to have to increase rents.

You may also find the most recent Freakonomics podcast pertinent, which discusses the unintended consequences of similar rent-control legislation.

Thank you for your time and consideration.

Sincerely,

J. Michael Wilson

To see where this Bill is in the process: Go Here

This is what this what SB5600 seeks to change to the Residential Landlord-Tenant Act (RLTA)

Let us know what you think in the comments.