Legislative Update: Half Way - Not Half Time

March 13 marks the last day the house of origin (the House of Representatives or Senate) may consider any bill introduced in the respective chamber in the 2019 legislative session, with exceptions. Generally speaking, if a bill has not been voted on by the full chamber of origin, it is considered dead for the session. You can read more about how a bill becomes a law here, and follow the legislative schedule here.  

Last week we provided a detailed summary of the status of the bills.  Take a look at this blog to find out more.

In this update: 

1. More information on termination notices, including military notices and terminations resulting from rehabilitation, requirements for installment payments and rent increase notices.  
2. Details how eviction actions will change, including changes to the notice to pay or vacate.
3. An update on tax-related issues, including a proposal to change the real estate excise tax. 

Extending Military Notices:

• Engrossed Substitute House Bill 1138 passed the House of Representatives by a vote of 95-0 with three excused absences. It is scheduled for a hearing in the Senate Financial Institutions, Economic Development & Trade Committee on March 14 for further consideration. 
• This bill provides clarity on the notice a servicemember is required to provide when terminating a residential tenancy after a permanent change of station. The bill also defines a permanent change of station, to include retirement and separation from the military, and orders to return to the base. 

Extending Rent Increase Notices:

• Engrossed Substitute House Bill 1440 passed the House of Representatives by a vote of 62-36. It has not been scheduled for a hearing in the Senate but has been referred to the Senate Financial Institutions, Economic Development & Trade Committee for further consideration.
• This would increase the notice required to increase the rent of any amount from 30 days to 60 days and requires that the effective date of any rent increase become effective at the end of the term, except where rent is determined by income. 

Permitting Installment Payments

• HB 1694 passed the House Committee on Civil Rights & Judiciary committee on February 15 and has not received further consideration by the House of Representatives to date. 
• The bill permits a tenant to request an installment payment for move-in fees (security deposit, last month's rent, nonrefundable fees) in up to three months' equal monthly payments in leases longer than 3 months.

Eviction Reform:

• Engross Substitute House Bill 1453 passed the House of Representatives by a vote of 54-44. The bill has been referred to the Senate Housing Stability & Affordability Committee for further consideration.
  • Three House Democrats voted against the bill; two of the three are African-American. After the vot,e the Seattle-King County NAACP sent a letter to the House of Representatives calling these democrats white supremacists and voting to continue institutionalized racism. 
• Engrossed Second Substitute Senate Bill 5600 passed the Senate on Saturday by a vote of 31-15, with three excused.  The bill will be referred to the House Judiciary Committee for further consideration. 

While ESHB 1453 and ESSB 5600 are not identical, they are considered companion bills. ESSB 5600 represents the negotiations to date and a compromise obtained by the stakeholders. The bill makes the following changes:

• Increases the notice to termination from 3 days to 14 days for rent and all other recurring charges, including utilities. This does not include late fees. 
• Defines rent to include all recurring monthly charges (think parking, storage, pet rent, and utilities)
• Creates a statutory 14-day notice. The notice will be provided in multiple languages on the Attorney General's website, though there is no requirement to provide a notice in the tenant's native language.
• Requires that any payments made be first applied to the rent (all recurring and monthly charges identified in the rental agreement and utilities) before applying it to late fees.
• Caps late fees at $75, plus an additional $50 for each subsequent judicial reinstatement
• Sets limitations on the amount of attorney fees that can be collected:
  • In default judgments, an award of attorney fees cannot be awarded unless the judgment is for more than two month's rent or if the total judgment is less than $1,200. 
  • If the tenant then seeks a stay, the court may award attorney fees as a part of the right to reinstatement.
• Permits "automatic" reinstatement by payment of the entire judgment within 5 court days, including an additional $50 for each time the tenant reinstates the tenancy. 
• Provides "judicial discretion" in eviction actions
  • Permits a court to reinstate a tenancy only after the court receives a request from the tenant after a judgment considering eight factors surrounding behavior and nonpayment of rent. 
  • Allows the court to separate any portion of a judgment or on appropriate terms. Provides the following limitations to any reinstatement:
    • Limits the stay of any writ to three months maximum
    • Requires payment of one month's rent within 5 court days of the order
    • Requires the sheriff, in any subsequent default in the terms of the reinstatement, to re-serve the writ before execution. Any default must be cured in three days. 
    • Permits additional stay if an emergency or government nonprofit program is available to pay upon sufficient documentation

Limits the opportunity for judicial reinstatement to tenants who have not received three 14-day pay or vacate notices in the prior 12 month period. 

• • Allows a landlord to recover unpaid rent through the Landlord Mitigation Fund in an eviction action but if said claim is denied, the landlord may renew the request for a writ with additional amounts owing. 
• Amends the Summons to provide more clarity in the language of the document. 
• Removes the requirement to obtain an Order of Alternative Service and simply permits the landlord to serve the notice, by posting in a conspicuous place not less than nine days from the date in the summons and mailed to the tenant.
  • In default judgments, the court will require an affidavit from the person attempting service that describes the efforts at personal service before alternative service was used and an affidavit by the landlord indicating the tenant cannot be found. 
    • The exercise of due diligence means an attempt at personal service at least three times over not less than two days at different times of the day. 
  • Amends the Landlord Mitigation Fund enacting legislation to include the opportunity to reclaim amounts owing from a judgment for rent, late fees, attorney's fees, and costs.
    • Requires the tenant to repay the Department of Commerce the amount expended on their behalf to reinstate the tenancy. The burden is on the tenant and state to order disbursement to the state.

Termination of the Tenancy:

• House Bill 1462 passed out of the House of Representatives 94-4 and is scheduled for a public hearing in the Senate Financial Institutions, Economic Development & Trade Committee on March 14. 
• This bill increases the notice required when the owner of a rental property intends to terminate a tenancy to substantially renovate, demolish or change the use of a rental property. 
• Just Cause eviction: House Bill 1656 and Senate Bill 5733 have not passed out of their house of origin. Failure to move by 5:00 pm on March 13 will render these bills dead this session. 

Isolated Worker Protection:

• Engrossed Substitute Senate Bill 5258 passed out of the Senate by a vote of 47-0, with two excused. The bill was referred to the House Committee on Labor and Workplace Standards. A hearing has not been scheduled. 
• The bill requires the development of a sexual harassment training program when employees are isolated or working alone and away from their primary residence. 

Tax-Related Legislation:

• Engrossed House Bill 1219 passed the House 74-24 and has been referred to the Senate Committee on Housing Stability and Affordability. A hearing has not been scheduled. 
  • The bill permits local cities and counties to use up to 25% of REET II funds for planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation or improvements of facilities serving the homeless and affordable housing. 
• Substitute Senate Bill 5363 proposes to extend the property tax exemption (MFTE) for new and rehabilitated properties in multiple unit dwellings in urban centers. The Senate has not taken action on this bill.
• Substitute Senate Bill 5366 proposes to expand the property tax exemption (MFTE) for new and rehabilitated properties in multiple unit dwellings in urban centers. The Senate has not taken action on this bill.

House Bill 1921 would enact a tiered real estate excise tax in Washington State. The bill remains in the House Finance committee but is not considered dead because it has been given the designation "necessary to implement the budget" and can be revived throughout the remainder of the legislative session. You can find more information about this proposal here. WMFHA is opposed to HB 1921.  

The House of Representatives will release their proposed budget towards the end of the month when issues around how to fund the priorities gain steam and speed.  

Discrimination Based on Citizenship & Immigration Status:

• Engrossed Senate Bill 5165 passed the Senate in a party line vote 29-20. It was referred to the House Committee on Judiciary and is scheduled for a hearing on March 15. 
• The bill seeks to add citizenship and immigration status to the statewide protected classes.