What happens when a tenant doesn’t pay rent?

As landlords in Washington State area well aware, the Landlord-Tenant Act (RCW 59.18 et seq.) and Seattle Just-Cause Eviction Ordinance (SMC 22.206 et seq.) are heavily weighted in favor of tenants’ rights. These laws have created a daunting and oft confusing legal process for landlords to navigate when an eviction becomes necessary. The first step in evicting a tenant is to place the tenant on notice that they are in default of their lease.  The type of default and issues surrounding the tenancy will dictate the type of notice a landlord is required to serve.

The most common notice a landlord will utilize is when the tenant fails to pay rent.  This post will address some of the pitfalls that landlords often fall victim to when serving a 3-Day Notice.

One of the most frequent mistakes our firm sees landlords make is what dollar amounts to include in the 3-Day Notice. Simply put, a landlord should include only the amount of unpaid rent.  Nothing more.  Do not include utilities, unpaid deposits, late fees or other miscellaneous charges; just the unpaid rent should be listed on the 3-Day Notice.

The next step is service of the 3-Day Notice. Ineffective service is perhaps the biggest and most costly mistake we see landlords make. A landlord’s failure to strictly adhere to the guidelines associated with serving a 3-Day Notice can lead to a dismissal of the court eviction, costing extra time, money, and leaving the tenant in the unit.  In order for service of the 3-Day to be considered effective, it is critical to serve the notice according to RCW 59.12.040. We encourage all landlords to become familiar with service requirements. In a nutshell, the 3-Day Notice must be served in one of two ways, however, a landlord must always knock first. If the tenant answers, one copy per each tenant of the 3-Day Notice must be hand-delivered to any person 18+ years of age. If the knock goes unanswered, then again, one copy per each tenant of the 3 Day Notice must be posted in a conspicuous place at the premises AND mailed to the tenant.  When mailing is necessary, one day is added by rule to the tenant’s response time; therefore, a 3-Day Notice in reality becomes a four day notice. Finally, the day after the 3-Day Notice is served is when the clock starts to tick on the tenant’s time to respond by curing the default or by vacating the premises.

In a legal environment that favors tenants’ rights, a good offense is the best defense, and knowledge is power.  Landlords must arm themselves with a working knowledge of the eviction process, both on a county and municipal level.  While the purpose of this and future blogs is to provide a legal overview of the procedural processes involved in evictions, there is no better offense than having an experienced legal team.  Holmquist & Gardiner, PLLC has been assisting both residential and commercial real property landlords for years. If you find yourself in the unfortunate position of dealing with deadbeat tenants, please call our firm at 206-438-9083, and we would be happy to help.

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Seattle’s 61% Minimum Wage – Now What?

On June 2, 2014, after great debate and protracted negotiations among various business and labor representatives throughout the City, the Seattle City Council made history by voting unanimously to pass Mayor Ed Murray’s $15 per hour minimum wage plan. The goal of the plan, according to the Mayor, is to “grow the middle class.”  This new minimum wage will eventually be a sixty one percent (61%) increase over the current state minimum wage of $9.32 per hour (already the highest state minimum wage in the United States), and is a dramatic wage escalation for those affected businesses.

So, what now? If you conduct or own a business in the City of Seattle, you need to know how and when your business will be impacted by this ordinance. The plan is complicated and will be implemented in series of phases over a period of three to seven years, with the first phase starting on April 1, 2015. The implementation of the different phases depends on two factors: the size of your workforce and whether or not you offer benefits. The chart below attempts to illustrate the timeline for the different phases and is included for your reference. Unfortunately, how your business will be impacted cannot be neatly illustrated in a graph, so if you would like to discuss and plan a strategy to minimize the impact this plan may have on your business from a legal perspective, please contact us at 206-438-9083 to set up a consultation.


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Seattle’s Paid Sick and Safety Time Requirements

Starting on September 1, 2012, employees of businesses operating in Seattle began accruing paid sick and paid safe time (PSST), defined as the “same hourly wage that the employee would have earned during the time PSST was taken.”  The new requirements apply to employers with more than four (4) full-time equivalent employees and cover all full and part-time employees, as well as temporary and occasional employees who work more than 240 hours in a calendar year.  Employers must also be aware that these regulations extend to employees who telecommute in Seattle as well as those who stop in Seattle for any purposes related to their employment. Employees working in business employing up to 249 employees accrue 1 hour of PSST for every 40 hours worked; in businesses with 250 or more employees, an hour of PSST is accrued for every 30 hours worked.

In addition to time off to address their own health conditions, employees are entitled to use their accrued time to care for family members with health conditions, as well as “for reasons related to domestic violence, sexual assault, or stalking.”  Relatedly, employees can take up to three (3) consecutive days of PSST without providing any documentation to the employer.  The benefit will continue to accrue even if the business is closed by order.

Employees cannot waive their PSST rights except by collective bargaining agreements.  But, the ordinance has a built-in two-year exemption for new small and medium-sized employers (up to 249 employees) beginning on the date the first employee is hired.  However, it is critical to understand that there are rather onerous record-keeping and notice requirements imposed upon employers.

If you have any questions about this new law and how it may impact your business, please feel free to contact a Holmquist & Gardiner PLLC attorney.

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Interpretation of Indemnity Clauses

A February 2012 Washington State Supreme Court decision, Snohomish County Public Transportation Benefit Area Corp. v. First Group America, Inc., clarified how Washington courts are to interpret indemnification clauses.  The facts of the case are interesting and the ruling provides a tie in to our daily work since indemnification clauses often arise in lease and purchase and sale negotiations.  Specifically, the case addressed the question of whether a party can receive indemnity from another party for its own negligence and described the type of contractual language required to secure indemnity.  These issues come up frequently in leases and often the word “solely” is included or stricken depending on which side of the table you are on.

According to the facts of the case, First America Group (d.b.a. First Transit) and the Snohomish County Public Transportation Benefit Area Corporation (d.b.a. Community Transit) entered into a contract where First Transit agreed to provide bus service on behalf of Community Transit between Snohomish County and parts of King County.  An indemnification clause was included in the contract, which stated that First Transit shall indemnify Community Transit “from any and every claim and risk…and all losses…in connection with the work performed under this contract…except only for those losses resulting solely from the negligence of Community Transit.”

Subsequently, a multiple vehicle accident occurred on I-5.  A driver of a Toyota Corolla braked suddenly which prompted a chain reaction accident.  Essentially, a driver of a Honda Accord (which was the second car behind the Corolla) was unable to stop in time.  The Accord smashed into the car immediately in front of it, and that car rear-ended the Corolla.  As a result, the Corolla was pushed into the adjacent High Occupancy Vehicle lane where it was struck by an oncoming First Transit bus.  Then, a Community Transit bus traveling immediately behind the First Transit bus rear-ended the First Transit bus.  As a result, Community Transit was left with 42 claims for damages.  However, when it sought indemnity on the claims, First Transit refused to pay and the case was argued all the way to the state Supreme Court.  At trial, the parties stipulated that both the driver of the Corolla and the driver of the Community Transit bus were negligent.  The driver of the First Transit bus was not negligent.

The issue in the case was whether the indemnity agreement between the parties “clearly and unequivocally show[ed] the parties’ intent that First Transit would be required to indemnify Community Transit for losses resulting from Community Transit’s own negligence.”  In deciding the case, the Supreme Court applied a general rule of contract interpretation adopted by many other states.  This general rule states that indemnity contracts will not be construed to indemnify a party against losses resulting from its own negligence unless that intention is “expressed in clear and unequivocal terms.”  The Court reasoned that First Transit was required to indemnify Community Transit because the express language of the contract revealed a clear and unequivocal intent to indemnify Community Transit for any amount of negligence unless it was solely negligent.  The opinion states:

“It cannot be said that the parties did not consider the possibility of losses resulting from[Community Transit]’s own negligence or the effect of such negligence.  The language shows that the parties consciously and deliberately considered the question of indemnity in connection with [Community Transit]’s negligence and, having done so, decided to exclude only [Community Transit]’s sole negligence as a trigger.”

This case is important because it shows the need for scrutiny of these clauses in the negotiation process.  If an indemnity clause is not articulated with specificity, a Tenant or Buyer may be inadvertently granting full indemnity to a Landlord or Seller for Landlord or Seller’s own negligence.  Prior to this opinion, there was a variety of case law on point. With this opinion the Court confirms that it will allow this result in commercial settings if the language of the contract shows that it was the clear and unequivocal intent of the parties.

Please call Imants at (206) 438-3851 if you would like to discuss this further.  If nothing else, reading the case should give you some insight into how these indemnification clauses will likely be construed by Washington courts.

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Washington “Fair Tenant Screening Act”

Recently, the Washington State legislature passed SB 6315 which affects the Residential Landlord-Tenant Act (RCW 59.18 et seq.):


The changes to the law went into effect on June 7, 2012, and imposes new notice requirements on Washington residential landlords.  The new law requires that, prior to obtaining any information on a prospective tenant, the landlord first provide written or posted notice to the tenant of the following:

  1. the types of information that will be accessed to conduct the tenant screening;
  2. what criteria may result in a denial of the tenant’s application;
  3. the name and address of the consumer reporting agency (if applicable);
  4. the tenant’s right to obtain a free copy of the report in the event of a denial; and
  5. the tenant’s right to dispute the accuracy of information appearing in the consumer report.

The landlord will only be able to charge the prospective tenant for the costs associated with obtaining the screening report if the landlord has followed these notice requirements.  Additionally, if a landlord decides to take an adverse action relating to the tenant’s application, the tenant must first be informed in writing of both the nature of and reason for the action.  Some examples include: rejection of the application, approving the application subject to certain conditions, or requiring an increased security deposit.  In addition to this new writing requirement, the law also proscribes a specific format for providing the tenant with notice of the adverse action.  Failure to comply with the new written adverse action notice requirements or the new pre-screening notices may subject the landlord to civil liability of $100.00 per violation plus court costs and reasonable attorney fees.

If you have any questions about this new law and how it may impact your business, please feel free to contact Hamilton at hamilton@lawhg.net.

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