The Department of Commerce was directed by the 2016 Washington State Legislature to develop and implement a Landlord Mitigation Program. The program is designed to provide financial assistance to landlords of private market units to mitigate qualifying damages caused by tenants who use HUD’s Housing Choice Voucher Program to pay for their rent. Specifically, Section 1010 of ESHB-2380 (Laws of 2016) stated:
"$125,000 of the appropriation is provided solely for landlord mitigation for the cost of damages that may be caused to private market units renting to housing choice voucher holders. In order to be eligible for assistance, a landlord must obtain a judgment against a tenant from the county in which the property is located. Participation is restricted to units within jurisdictions that prohibit denying tenancy based solely on the applicant's source of income. Reimbursement is allowed only for amounts related to property damage, unpaid rent, and other damages caused as a result of the voucher-holder tenant's occupancy. Damages must exceed normal wear and tear on the property and be in excess of $500 but not more than $5,000 per tenancy. A claim must be submitted within one year of obtaining a judgment against a tenant."
Who can apply?
To be eligible for the program, a landlord must have leased a private market unit to a tenant using the HUD Housing Choice Voucher Program. For more details on the various Housing Choice Voucher types, visit HUD’s Housing Choice Voucher Program website. The damages to the rented unit/property must exceed normal wear and tear.
To qualify for this assistance, the landlord must first obtain a judgment against the tenant from a court in the county in which the rental property is located. The judgment claim must have been initiated no earlier than April 18, 2016 (which is the date the bill became law). An application for reimbursement under the Landlord Mitigation Program must be submitted to Department of Commerce within one year of the date of the judgment.
The rented unit/property in question must also be located in a jurisdiction that prohibits landlords from denying tenancy based solely on the tenant's source of income. To the Department of Commerce’s knowledge, the following locations currently have such protections in place. We recommend you check with authorities in your community, as local landlord-tenant ordinances vary and may change.
Reimbursements are limited to those amounts covered in a final judgment against a tenant who was a Housing Choice Voucher-holder during their tenancy. The landlord must submit an application for mitigation assistance to the Department of Commerce within one year of obtaining a judgment against a qualified tenant. The timeframe to appeal a judgment must have expired without appeal or there must be no outstanding appeal on the judgment.
How much can I be reimbursed?
Damages must exceed normal wear and tear on the property and must be in excess of $500, but not more than $5,000 per tenancy. Program assistance may be available on a judgment that exceeds $5,000, but the amount of assistance provided will not exceed $5,000.
For example, for a judgment of $7,000 in qualifying damages, a landlord may seek reimbursement for up to $5,000 of the qualifying damages. In such cases, the damages covered by this program must be clearly identified in the application submitted to the Department of Commerce. All reimbursement requests must be clearly substantiated by paid invoices of work performed. We cannot disburse funds for requests based solely on estimates.
What damages are covered?
The following costs can be considered "damages" eligible for reimbursement under the Landlord Mitigation Program:
If the judgment is $5,000 or less, and the landlord received payment from the tenant or a third party for some amount included in the judgment (such as any deposits retained by the landlord), the amount must be deducted from the request for reimbursement from the Landlord Mitigation Program. If a judgment exceeds the $5,000 program reimbursement limit, and the payment received, if any, does not reduce the total unpaid amount of the judgment below $5,000, the landlord may request assistance up to the $5,000 program limit.
For example, if $500 has been received toward satisfaction of a $7,000 court judgment, the landlord may still apply for the full $5,000 allowable from the program. However, if, after submitting an application for program assistance, a landlord receives payment for any claimed damages from a tenant or a third party, the landlord must notify the Department of Commerce within 10 days of such payment. If payment from another source (the tenant or a third party) results in an overpayment by Commerce, the landlord must provide restitution to the department for the overpaid assistance within 45 days. The Department of Commerce will maintain a record of mitigation assistance provided to landlords in order to determine if there have been any overpayments.
What is the process for applying and receiving the funds?
The application and submittal instructions are available for download here. After submitting the application and supporting materials, the Department of Commerce will notify the landlord within 10 days that the application was received and ask for additional information or clarifications, if needed. The department will process applications on a first come, first served basis. If all criteria for reimbursement are met, payments will be provided to the landlord within 45 days from the date the application is received.
Within 30 days of receiving financial assistance from the Department of Commerce, the landlord must file a satisfaction of judgment in the amount of assistance received from Commerce. A "partial satisfaction" must be filed if the judgment is more than the amount received. The landlord must file satisfaction documents in the court that issued the judgment against the tenant. Landlords have 40 days from the date they received assistance to deliver a copy of the filed satisfaction of judgment to the Department of Commerce. If the assistance received from the department did not cover the full amount of the judgment, the landlord may pursue other means to complete the judgment.