Source of Income Discrimination in Washington State

The practice of a landlord choosing whether to accept an alternative source of income will be illegal beginning September 30, 2018. Landlords will no longer be able to discriminate against tenants who use federal, state or locally issued benefits to pay their rent. A law passed in the 2018 legislative session makes refusal to consider an applicant's or existing tenant's alternative source of income, including subsidies, illegal.  

What is covered by the new law? 

1) A landlord may not, based on the source of income of an otherwise eligible prospective tenant or current tenant:

(a) Refuse to lease or rent any real property to a prospective tenant or current tenant, unless the:

(i) Prospective tenant’s or current tenant’s source of income is conditioned on the real property passing inspection
(ii) written estimate of the cost of improvements necessary to pass inspection is more than $1,500
(iii) landlord has not received moneys from the landlord mitigation program account to make the improvements

(b) Expel a prospective tenant or current tenant from any real property

(c) Make any distinction, discrimination, or restriction against a prospective tenant or current tenant in the price, terms, conditions, fees, or privileges relating to the rental, lease, or occupancy of real property or in the furnishing of any facilities or services in connection with the rental, lease, or occupancy of real property

(d) Attempt to discourage the rental or lease of any real property to a prospective tenant or current tenant

(e) Assist, induce, incite, or coerce another person to commit an act or engage in a practice that violates this section

(f) Coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or on account of the person having exercised or enjoyed or having aided or encouraged any other person in the exercise or enjoyment of, any right granted or protected under this section

(g) Represent to a person that a dwelling unit is not available for inspection or rental when the dwelling unit, in fact, is available for inspection or rental

(h) Otherwise make unavailable or deny a dwelling unit to a prospective tenant or current tenant that, but for his or her source of income, would be eligible to rent real property

2) A landlord may not publish, circulate, issue, or display, or cause to be published, circulated, issued, or displayed, any communication, notice, advertisement, or sign of any kind relating to the rental or lease of real property that indicates a preference, limitation, or requirement based on any source of income.

If a landlord requires that a prospective tenant or current tenant have a certain threshold level of income, any source of income in the form of a rent voucher or subsidy must be subtracted from the total of the monthly rent prior to calculating if the income criteria have been met.

“Source of Income” includes:

benefits or subsidy programs including housing assistance, public assistance, emergency rental assistance, veterans benefits, social security, supplemental security income or other retirement programs, and other programs administered by any federal, state, local, or nonprofit entity. “Source of income” does not include income derived in an illegal manner.

Landlord Mitigation Fund 

Who is covered by the new law?

Any landlord who provides or offers to provide housing to a tenant that receives a long- or short-term housing subsidy during their tenancy.  

What types of claims can a landlord seek reimbursement for from the fund?

A part of the negotiations on this law included the creation of the Landlord Mitigation Fund.  The requirements to obtain reimbursement from the Landlord Mitigation Fund include:

1.Reimbursement for repairs resulting from a failed inspection: 

The landlord can claim reimbursement of up to one thousand dollars for repairs, to make a unit that fails an HQS inspection pass the subsidy inspection.  The landlord must have paid the first $500 in repairs.

2. Reimbursement of lost Rental Income:

Reimbursement may also include up to fourteen days of lost rental income from the date of offer of housing to the applicant whose housing subsidy program was conditioned on the rental property passing inspection until move in by that applicant or delays resulting from the inspection. 

3. Reimbursement for lost rent and/or damages resulting from renting to a low-income tenant using a subsidy:

The landlord must make repairs and then apply for reimbursement to the department as stated on the government website.

  • Reimbursement for damages beyond wear and tear.  Items that are eligible for reimbursement include, but are not limited to: Interior wall gouges and holes; damage to doors and cabinets, including hardware; carpet stains or burns; cracked tiles or hard surfaces; broken windows; damage to household fixtures such as disposal, toilet, sink, sink handle, ceiling fan, and lighting. Other property damages beyond normal wear and tear may also be eligible for reimbursement at the department’s discretion.
    • Claims for reimbursement may be made at any time during the tenancy, up to $5,000 in total reimbursement. 
Limitations to the Program:
  • While claims or damages may exceed $5,000, total reimbursement from the program may not exceed five thousand dollars per tenancy.
  • If a landlord obtains reimbursement from the program, the landlord may not seek any further collection action from the tenant.  
  • The landlord must submit to the department copies of the following documents in order to receive reimbursement from the Landlord Mitigation Fund:
    1. Proof of a Washington Statewide Vendor Identification Number;
    2. A Rental Assistance Agreement (or adequate proof of housing assistance);
    3. A Rental Assistance Inspection Report from a subsidy program;
    4. A completed Move-In Condition Report (this is not a Rental Assistance Inspection Report) signed and dated by both Landlord and Tenant(s);
    5. A Tenant ledger showing any unpaid portion of rent and other charges being claimed and application of Security Deposit (if post-move out);
    6. Notices related to unpaid charges;
    7. Before and after photos of damage and photos of the affected area following repairs;
    8. Copies of all repair invoices for damages that are included on the claim; and
    9. Complete the entire claim submission form found here. 

All reimbursements for eligible claims shall be made on a first-come, first served basis, to the extent of available funds.

Landlords may also submit a judgment from an unlawful detainer action or small claims civil action to obtain reimbursement from the Landlord Mitigation Fund.

Frequently Asked Question

Landlord Mitigation Program

  • Is this program only for landlords that serve low-income households?
    • Eligibility is based on the tenant receiving a subsidy. While subsidies are primarily income based, we will not be reviewing income qualifications for landlords to receive an award.
    • Properties owned by a Housing Authority are the only properties that are not permitted to use the Landlord Mitigation Program.
  • Why do you require a Statewide Vendor ID (SWV) number?
    • All payees from State offices are required to have a State Vendor ID number. This will require the payee to complete an application and W-9 and submit to the state.
    • Property Managers may use one SWV for all properties but the State will send the owner of the SWV a 1099 at the beginning of the following year. Commerce recommends using a unique SWV for each individual owner.
    • Important note: Do not submit a claim without this number. It will be denied if the number is not included.
  • Will Commerce consider claims for tenants that moved in/out prior to June 7th, 2018?
    • Unfortunately, the Landlord Mitigation Program is not a retroactive law and claims for move-in or move-out repairs or rent loss that occurred prior to this date will not be considered. For clarification, post-move in claims will be considered for tenants that occupied the property prior to June 7th, 2018 so long as the damages occurred after June 7th, 2018.
    • As of June 7th, 2019 claims for damages that occurred over twelve months prior to the date of claim submission will not be reimbursed.
  • What if I didn’t get a copy of the housing voucher or Housing Assistance Inspection form?
    • The easiest solution to satisfy this requirement is to contact the housing assistance program that provided the landlord with the rent assistance and ask them to provide copies.
    • If a landlord not able to collect copies from the Housing Assistance program, a signed statement from the tenant or case manager stating the amount and length of rent assistance will suffice.
  • What is the difference between a Housing Assistance Inspection Report and a Move-In Condition Report?
    • A Housing Assistance Inspection Report is the form that is completed to verify that the property is habitable and meets the minimum standards of the Housing Assistance program that is offering a rental subsidy.
    • A Move-In Condition Report is a form that is completed by the tenant and landlord to document the condition of the property at the time of move-in. Often, this same form is used again to document the condition of the property at move-out for ease of comparison. Go to comer.WA.gov/landlord fund for a sample form (Landlords have permission to use this form to satisfy this requirement).
    • Both documents are required for a landlord’s claim.
  • When can I submit a claim?
    • Landlords may submit as many claims as needed during the life of a tenancy. It is important to note the consequences to being awarded a claim
      • Each individual claim must exceed $500
      • Any combination of claims can be submitted but the maximum of all awarded combined claims cannot exceed $5000.
      • Any claim awarded prohibits the landlord (or any collection agency) to take legal action against the tenant for damages attributable to the same tenancy.
    • Landlords may only submit one claim for modifications required to pass an occupancy inspection.
  • How much can be reimbursed for a pre-move in claim?
    • Landlords can receive up to $1000 in reimbursement for repairs required for the property to pass a housing assistance inspection. The initial $500 of the repairs will not be reimbursed. Any amount (up to $1000) over the initial $500 will be reimbursed if the claim is approved.
    • In addition to the amount listed above, landlords may claim up to fourteen days of rent loss that caused the move-in to be delayed by the needed inspection and/or repairs. Evidence of the delay must be submitted with the claim.
  • How much can be reimbursed for damages after move-in?
    • Landlords can receive up to $5000 in repair reimbursement.
    • The minimum claim must be at least $500. Unlike the pre-move in reimbursement, the initial $500 is claimable.
    • Important note: Any monies paid on a post-move in claim will nullify the landlord’s ability to pursue any other funds owed from the tenant through any means or agency.
  • What damages can a landlord claim?
    • Damages include (but are not limited to) physical damage to a property beyond  normal wear and tear,  unpaid rent and charges associate with tenancy including late charges, non- compliance charges, legal expenses and utility charges.
    • Important note: The program does not pay fees or lease-break charges.
  • How do I use the Security Deposit?
    • Any claim that is submitted for move-out charges must first have the security deposit applied to the charges owed first.
  • How long does the review process take?
    • Landlords will receive receipt of their claim submission immediately upon submission of the online form. Claimants that mail the claim to Commerce will receive a receipt within ten business days.
    • Claims are reviewed in order of submission. Commerce cannot guarantee a specific timeline, only that each application will be reviewed in the order received.
    • Funds will be disbursed to claims upon approval and then fund availability. If funds are not available at the time of approval, the claim will be held in a pending status until funds are available in order of submission (approved claims will be paid in order received).
    • Claimants with a denied claims will be notified immediately upon decision.
  • Can I appeal a denial of my claim?
    • Most denials will be denied due to lack of supporting documentation, photos or simply lacking information on the form. If the claim is denied for any of these reasons, please submit a new claim with all corrected information and supporting documents included. The new claim will drop to the bottom of the cue and may significantly delay a decision.
    • Claims that are denied for any other reason may only be resubmitted with a judgement against the tenant included.
  • Can a Rental Assistance Agency obtain reimbursement from the program?
    • Unfortunately, this program is designed to reimburse landlords only. Third-party agencies and subsidy providers may not receive funds from this program.
  • Can a property management company collect reimbursement on behalf of a Housing Authority?
    • The law is clear on the only exception that was included. That exception is that the program will not pay for damages to a property that is owned by the Housing Authority. This is primarily due to the fact that HUD offers their own form of a Landlord Mitigation Program.
    • In short, no, property management companies cannot claim funds on behalf of the Housing Authority. Details on the HUD reimbursement process can be found at https://www.hud.gov/sites/documents/HSG-06-01GC5GUID.PDF
  • Why is the information provided for a claim subject to Public Record Requests?
    • Public Disclosure Act, chapter 42.56 requires that most information gathered for the purpose of State business be readily available for public review. While most information is readily available, landlord and tenant direct contact information is not publicly shared nor are the supporting documents, claim findings or fraud identification that contain sensitive information.

Updated September 18, 2018