Seattle Landlord-Tenant Law Reference Guide

Definitions:

“Short term rental” means a lodging use, other than a hotel or motel, offered for rent for fewer than 30 consecutive nights. A dwelling used for more than 30 consecutive nights is not a short term rental. 

• Short-term rentals are not live/work units, dwellings in commercial or industrial buildings, floating residences or waterfront homes. Where prohibited by shoreline code, RV’s, tents, garages, boats, or other spaces that are not considered a “dwelling unit.”
• Short-term rentals are not housing units owned, operated, or managed by a major educational or medical institution or by a third party for that institution.

“Owner” means any individual, firm, corporation, or partnership and their agents alone or with other people who have an interest in any building and unit therein, with or without actual possession of the building or unit.

“Short term rental operator” means any person who is the owner, or a lawful tenant, of a unit provided as a short term rental.

License Requirements:

All operators of short term rentals must have a short term rental operator license. The annual cost for this license is $75. The license must be in the name of the owner. The license must be renewed annually.

• This license is in addition to a City of Seattle Business license.
• The Washington State Department of Health may also require a “Transient Accommodation License.”

Rules:

• Every listing of an available short term rental must include the department-issued operator license number
• Must comply with the Rental Registration and Inspection Ordinance, if the short term rental unit is not the primary residence of the owner
• Must maintain minimum health and safety standards and minimum building code requires for the unit
• Must ensure all units have working smoke and carbon monoxide detectors in every bedroom and on all habitable floors
• Must comply with parking, noise, and other code requirements of the specific type of property rented as a short-term rental
• Must provide a properly maintained and charged fire extinguisher
• Must post the following information in a conspicuous place:
  • Emergency contact information for emergency services (911)
  • The address of the short term rental unit
  • A floor plan indicating fire exits and escapes
  • Contact information for the city Customer Service Bureau
  • Maintain maximum occupancy limits (max 8 people in any unit)
  • Provide a local (in King County, WA) contact for all guests available to respond to guests during their stay
• Must maintain at least $1,000,000 in liability insurance or conduct business through a platform that provides equal or greater coverage
• Must pay federal, state and local taxes as they are due

Limitations and Exceptions on the Number of Short Term Rental Units:

Generally, operators may manage a maximum of two short term rentals within Seattle city limits. The following exceptions exist for operators of short term rentals:

• In the Downtown Urban Center, if short term rentals were operating prior to September 30, 2017, all units may continue to be rented provided they comply with the requirements of the law.
• In the First Hill/Capitol Hill Urban Center, short term rentals in multifamily buildings with five units or less and constructed after 2012 and operating prior to September 30, 2017 may operate up to two additional units if one of the additional units is the owner’s primary residence.
• After one year of operations, the operator may operate a maximum of three units, if the third unit is the operator’s primary residence.

Qualifications for Exceptions:

To qualify for the described exception areas, the owner must provide:

• A business license tax certificate in effect on or prior to September 30, 2017
• Records reflecting remittance of federal, state, and local taxes within the 12-month period prior to September 30, 2017
• A registry of dates the unit was used as a short-term rental within the 12-month period prior to September 30, 2017

Protected Classes

In Seattle, it is an unlawful practice to provide different treatment, different terms or conditions or or otherwise treat a person different based on the following classes:

• Race
• Color
• National Origin
• Ancestry
• Religion
• Creed
• Sex
• Disability
• Parental Status
• Marital Status
• Sexual Orientation
• Gender Identity
• Age
• Section 8 or other subsidy programs
• Alternative Source of Income
• Political Ideology
• Veteran/Military Status
• Service or Assistive Animal
• Retaliation
• Source of Income

Source of Income

It is an unfair practice to refuse to rent to a person based on their source of income. Source of income is defined as any subsidy, whether federal, state, local, private or non-profit, and for any duration, and all other income earned through employment or otherwise provided by the federal, state, or local government.  

If the subsidy requires an inspection and the inspection fails based on repairs of less than $1,500, the housing provider is required to make those repairs and offer the home to the subsidy holder. 

Income to Rent Ratio

Prior to calculating any income to rent ratio, the housing provider must subtract any subsidies from the total cost of rent.  Income to rent ratios must then be calculated using the applicant’s portion of the rent. 

Community Pledges

When a resident fails to pay their rent on time, the resident may secure a pledge prior to the end of the 3-day notice to pay or vacate period.  After the expiration of the 3-day pay or vacate, housing providers are not required to accept any pledge. Any pledge that is accepted must be paid within 5 days.

Preferred Employer Discounts

Discounts targeted to employees of specific employers or trades cannot be advertised or offered to any individuals of any company without offering the same discount to all qualified applicants. An exception exists for individuals who are public employees (i.e. military discount). 

Comprehensive Reusable Tenant Screening Reports

The State authorized a Comprehensive Reusable Tenant Screening Report (CRTSR). A CRTSR is a tenant screening report that can be used an unlimited number of times during a 30-day period It is intended to limit the cost of multiple application fees for one applicant at different communities

The law requires housing providers to include:

• A statement in the screening criteria identifying whether the community accepts a CRTSR; and 
• A statement on any property website indicating whether the community accepts a CRTSR.

Note: The State law requires a CRTSR to include criminal history information which is prohibited within the City of Seattle limits.

Criminal History

**A legal challenge was filed in April 2018 challenging the constitutionality of the law. The challenge is pending.**

The use of criminal history in tenant screening is prohibited.  However, housing providers may ask about and obtain information relating to requirements to register on a local, state or national sex offender registry.  Denial of tenancy based on registry information must be based upon a legitimate business reason, after consideration of the following factors:

• The nature and severity of the crime
• The number and types of convictions
• The time that has elapsed since the date of conviction
• Age of the individual at the time of conviction;
• Evidence of good tenant history
• Any supplemental information related to rehabilitation, good conduct, etc.

The city interprets the law to prevent the use of the Office of Foreign Asset Control (aka terrorist watch list) maintained by the United States Department of Treasury.

The law also requires housing providers to include a statement on the application:

“[Housing Provider] is prohibited from requiring disclosure, asking about, rejecting an applicant, or taking adverse action based on any arrest record, conviction record, or criminal history, except sex offender registry information.”

First in Time

**In March 2018 a King County Superior Court judge overturned this law.  An appeal is pending and the law remains invalid at this time.**  

All screening criteria must include the minimum criterion necessary to qualify for a rental home, including all documentation necessary for an individualized assessment or other screening. 

Screening criteria must include whether units are set aside for individuals with income below the average of the area (i.e. MFTE, tax credit, etc.). Also, screening criteria must include information on how to request additional time. 

The complete screening criteria must be included in any online advertising or must be directly linked to the criteria when a unit is advertised for rent. 

All completed applications must include the date and time the completed application is received by the housing provider. If an applicant asks for more time because they are of Limited English Proficiency or because of disability, the time and date the request for additional time is made is the time and date of the completed application. 

Housing providers must screen applicants in the order the housing provider receives the completed applications, and offer tenancy to the first applicant that provides a completed application and qualifies under the housing provider’s screening criteria. 

An applicant has 48 hours to accept tenancy.  Individuals required to provide additional information (e.g. conditional approval) must be given 72 hours to provide that information.

Rent Bidding Websites

 A law passed in early 2018 prohibits the use of rent bidding websites that provide services to allow applicants to bid rent up or down.  The law does not prohibit the act of bidding, but prohibits the use of websites that promote the act of rent bidding.

**A lawsuit has been filed challenging the constitutionality of this law.** 

Security Deposits

**A legal challenge was filed in April 2018 challenging the legality of this law. The challenge is pending.**

Seattle limits the amount of money that can be collected at the initiation of tenancy (at move-in).  The following limitations apply:

• Limits the maximum security deposit to one month’s rent less any nonrefundable fees charged.
• Permits up to a 6-month payment plan, when the resident makes a request, which includes the security deposit and non-refundable fees and last month's rent.
• Payment plans are not applicable when the security deposit is less than 25% of the first full month’s rent and the housing provider does not require payment of last month’s rent.
• Failure to make payments pursuant to a payment plan is subject to a 10-day notice.

Nonrefundable Fees:

• Limits one-time nonrefundable fees charged at move-in to:
  • The application fee, which cannot exceed the actual cost of the screening report received; and
  • The cleaning fee. Any costs for cleaning cannot then be deducted at the end of the lease when the resident moves out.
  • Combined the application fee and cleaning fee cannot exceed 10 percent of the first full month’s rents except when the application fee exceeds 10 percent of the first month’s rent.
  • If the application fee is paid directly to the screening provider, the cost is not included in any screening calculation.
  • All recurring fees are permitted.
  • All other one-time nonrefundable fees charged at move-in are prohibited.

Pets:

• Nonrefundable fees are not allowed for the keeping of a pet.
• A pet damage deposit is permissible up to 25% of the first full month’s rent for each pet.
• The pet damage deposit can be paid by a 3-month payment plan if requested by the resident.
• Additional rent for keeping a pet is permissible and may be separately itemized in a rental agreement

Written Checklist & Security Deposit

At the initiation of tenancy, the landlord must provide the tenant with a written checklist to inspect the apartment home. In order to collect, and keep either a portion of or all of the security deposit, the written checklist must be signed by both the landlord and the tenant.

The lease agreement must include the name, address, and location of the bank where the security deposit is held. 

Packet of Seattle Laws

Seattle requires all residents to receive a Summary of Landlord-Tenant Laws prepared by the City. The packet also requires voter registration information be included with this Summary. Now called the “Packet,” it must be provided to residents when they sign their lease and with any renewal. For residents with month-to-month tenancies, the Packet must be provided annually. The packet must also be provided whenever the Summary of Laws document is updated by the City, or reasonably thereafter.

If you haven’t already, take some time to read the document, so you and your teams know what is being provided to residents of your communities.

Parking Requirements and the Lease

Apartment homes cannot “come with” a parking spot. Any parking provided by the housing provider to the resident must be specifically described in an addendum, including any rent due for use of the parking space.  An exception exists when the apartment home has an attached garage to the unit, like a townhouse over a garage. 

There is no requirement to charge for the use of parking, however, this is a supplemental revenue opportunity for rental housing providers provided the micro-market supports parking rent.  In certain areas, residential parking may be rented commercially to transit riders.  To learn more about commercially renting residential parking, contact the Seattle Department of Construction and Inspections.

Any lease agreement that includes parking, may be amended upon lease renewal.  All new leases must comply with this law.

Rental Inspections

In 2012, Seattle created the Rental Registration and Inspection Ordinance, which requires all rental properties to register with the City. Once every 10 years, the property will be inspected to make sure the rental property is in compliance with basic life-safety issues.  The City has created an inspection checklist that either a city-inspector or private inspector will use to determine whether the property is in compliance with the law.  

By now you should have registered with the City and some of you may have received inspection notices to inspect 20% of your homes, up to a maximum of 50 units in each community. 

When you receive a notice of inspection from the City, notify your all your residents of an upcoming inspection and ask that each resident identifies and reports any maintenance issues they need to be fixed.

Complete an annual inspection of every home in your community to identify any life safety issues that may be present.

At least two days prior to the inspection date, notify your residents of the units that will be inspected by a proper notice. 

Rent Increases

Seattle requires 30 days’ notice for rent increases less than 10% and 60 days’ notice for rent increases greater than 10%.

All rent increase notices must include a statement where a resident can obtain information about their rights and responsibilities.

The resident may suspend a rent increase, prior to the effective date, if the resident has made requests for repairs of significant life and safety issues, and those repairs have not been completed before the effective date of the rent increase. 

Any rent increase can only become effective at the beginning of a rental period. 

Ratio Utility Billing Systems

The rules require a landlord or billing agent to provide tenants with specific information about their bills and to disclose their billing practices, either in a rental agreement or in a separate written notice. It is a violation of the ordinance if a landlord imposes a new billing practice without appropriate notice. 

Landlords must post, or hand-deliver or mail to tenants if posting isn't possible, a written description of the methodology used to allocate each utility service and a copy of Seattle Municipal Code Chapter 7.25.

Billing must include:

• The name, business address and telephone number of the landlord or third party billing agent, whichever one sent the bill to the tenant.
• Show the basis for each separate charge, including service charges and late fees, if any, as a line item, and show the total amount of the bill.
• If the units are submetered, include the current and previous meter readings, the current read date, and the amount consumed.
• Specify the due date, the date upon which the bill becomes overdue, the amount of any late charges or penalties that may apply, and the date upon which such late charges or penalties may be imposed.
• Any past due dollar amounts.
• The name, mailing address and telephone number for billing inquiries and disputes, the business hours and days of availability, and the process used to resolve disputes related to bills.

A tenant can dispute a third-party billing by notifying the billing agent and explaining the basis for the dispute. This must be done within 30 days of receiving a bill. The billing agent must contact the tenant to discuss the dispute within 30 days of receiving notice of the dispute.

What utility charges can be passed through to tenants?

• A service charge of no more than $2 per utility per month, not to exceed a cumulative service charge of $5 per month for all the utilities.
• Late payment charges of no more than $5 per month plus interest at a rate not to exceed 1% per month.
• Late payment charges shall not accrue until at least 30 days after the tenant receives the bill.
• Insufficient funds check charges for dishonored checks must not exceed $31 per dishonored check

Landlords must make the prior two years utility bills available for review by residents and post or make available the most recent three months’ utility bills for residents to view. 

Changes to Rules, Lease Provisions and Community Policies

All changes to rules, lease provisions and community policies must be given with 30 days' advance written notice prior to the end of term of rental agreement, unless agreed to by mutual consent.  (E.g. a smoking property that becomes non-smoking).  This may result in a rolling roll out of a community policy change.  

Notice of Sale

In properties with residents earning 80 percent AMI or less, the owner must provide at least 60 days’ notice of sale prior to advertising the property for sale or listing it with a listing service. 

Just Cause Eviction

The City of Seattle requires “just cause” to terminate a month-to-month tenancy. There are 18 limited reasons available to terminate a tenancy.  Here are some of the most relevant to multifamily housing:

• Failure to pay rent or habitual failure to pay rent four or more times in a 12-month period
• Material violation of the rights and responsibilities identified by law
• Habitual failure to follow the terms of the lease agreement and community policies resulting in three 10-day notices in a 12-month period
• Removal of the unit from the rental market
• Occupancy of the apartment home is conditioned on employment
• Resident engages in criminal activity on the premises

Relocation Assistance

Relocation assistance is required when the owner intends on making upgrades to existing units and must be paid to residents who earn less than 50% of AMI. The City requires an application and information from residents when an application for relocation is submitted. 

Condo Conversions

• Residents are afforded the right to purchase the apartment home they reside in prior to the unit be listed for sale
• Residents must be provided 120 days’ notice prior to terminating a lease.
• Residents must be notified of their rights to relocation assistance and information about ending rental agreements
• Apartments must also be inspected by the City prior to sale and any housing, building maintenance code violations repaired
• Residents may be eligible for relocation assistance if they elect not to buy their apartment home, and earn less than 80 percent area median income. Elderly and disabled residents may be entitled to additional relocation assistance.  Relocation assistance is paid 100% by the owner/developer.