Rent Control Coming to Washington?

There is a widely-held consensus among economists—of both the “left” and “right” of economic thought—that rent control is bad economic policy. Consider these observations of economist Paul Krugman:

The analysis of rent control is among the best-understood issues in all of economics, and among economists, anyway—one of the least controversial.  In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that “a ceiling on rents reduced the quality and quantity of housing.” Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand.[1]

Wherever rent control has been implemented, adverse side effects have followed.  Rents of uncontrolled apartments go sky-high. Builders fear extension of rent controls and simply stop building new apartments in favor of condominiums, office buildings, and other structures not subject to rent control, exacerbating the shortage of affordable housing. Bitter relationships ensue between landlords and tenants as, with cash flow from rents capped, landlords fail to maintain properties, and seek ever more clever ways to curtail rent controls and get rid of tenants. This leads to a proliferation of government regulations.  Economists consider all these adverse side effects of rent control “predictable”, according to Paul Krugman.

Some economists go even further.  Rent control is “the most effective technique presently known to destroy a city–except for bombing,” according to a celebrated quote from a prominent Swedish economist.[2]

Even leaders of communist countries have become disenchanted with rent control. “The Americans couldn’t destroy Hanoi, but we destroyed our city by very low rents and controls. We realized that it was stupid and that we must change policy,” Vietnamese revolutionary, diplomat, and politician Nguyen Co Thach has said in a well known quote.[3]

More than nine out of ten economists agree rent control is bad policy.  Yet in Washington state a movement is afoot to impose rent controls. Rent control by Washington cities has long been banned under state law.[4]  New legislative proposals would lift this ban as to residential rentals.[5] Seattle is widely expected to pass rent control if the state-wide ban is lifted.

______________________________

[1] Paul Krugman, Reckonings; A Rent Affair, New York Times (June 7, 2000).

[2] Assar Lindbeck, The Political Economy of the New Left (New York: Harper and Row, 1972); cited in Sven Rydenfelt, “The Rise, Fall and Revival of Swedish Rent Control,” in Rent Control: Myths and Realities, Walter Block and Edgar Olsen, eds. (Vancouver: The Fraser Institute, 1981), pp. 213, 230.

[3] See, for example, Britain Goes Wild as Ed Miliband Proposes Rent Controls, Forbes April 27, 2015;

[4] RCW 35.21.830.

[5] HB 1082; SB 5286.

Washington Court of Appeals Rules on Late Fees

The Washington Court of Appeals ruled that late fees may be demanded on a three-day notice to pay rent or vacate, rather than on a separate 10-day notice to comply or vacate.  However, the opinion is unpublished and therefore has no value except to the parties to the particular case.

A motion to publish is pending.
For more information see Court of Appeals Upholds Late Fees in 3-Day Notice.

Just the Fax – The Tenant May Appear and Defend the Eviction by Fax

A tenant who responds to a summons and complaint has appeared in the eviction action and is entitled to notice. Victory by default is no longer possible and the landlord must set a hearing in order to evict the tenant.

Though courts have held phone calls to an attorney constitute an appearance, there has been no clear and unambiguous legal authority for appearance by fax until now. A new law makes it explicit that a tenant may serve the response to the summons and complaint by fax. The new law also changes the mandatory language in the summons so notice is given to the tenants that they may respond by fax.

Failure to use the new summons form could result in the eviction being dismissed. Contact landlord attorney Scott Eller for more information.

New Mold Disclosure Law

New Mold Disclosure Requirement

A new law went into effect July 24, 2005 that requires Washington landlords to make disclosures to all tenants regarding potential health hazards of mold. 

The legislature found that “residents of the state face preventable exposures to mold” and that such exposure has “been found to have adverse health effects”.

The new mold disclosure law further states in the legislative findings that “steps can be taken by landlords and tenants to minimize exposure to indoor mold”.  And that as “the reduction of exposure to mold in buildings could reduce the rising number of mold-related claims submitted to insurance companies and increase the availability of coverage, the legislature supports providing tenants and landlords with information designed to minimize the public’s exposure to mold”.
 

The new law requires landlords to provide all new tenants with information provided or approved by the Department of Health about the health hazards associated with exposure to indoor mold.  The information must be provided in writing either individually to each tenant, or may be posted in a visible, public location at the dwelling unit property. 

The landlord must provide the information:

1) to new tenants at the time the lease or rental agreement is signed, and

2) to current tenants no later than January 1, 2006, or post the mold information in a visible, public location at the dwelling unit property beginning the effective date of the act  (July 24, 2005).

A mold disclosure pamphlet approved by the Department of Health is available for download on our Evictions Forms page.

 

Washington landlord attorney Scott Eller

New Law Makes Taking a Default Judgment Against Tenants More Difficult

A recently enacted law requires all plaintiffs, including landlords, to provide evidence that defendants, including tenants, are not in military service before taking a default judgment.  This affects virtually all civil actions, including evictions.   

Alternatively, the landlord may submit a declaration establishing that the landlord has no knowledge as to whether the tenant is in the military.  Presumably, though the statute does not so state, courts will require a showing of diligence on the part of the plaintiff to ascertain the military status of the tenant. 

The statute is silent as to just what sort of supporting facts will suffice to establish that the defendant is not in the military or that after a diligence effort the plaintiff is unable to ascertain the military status of the tenant.  It is therefore up to each court to decide on a case by case basis. As this law is freshly minted, there is little to suggest what types of supporting evidence will gain currency.