Landlords Cannot Deny Prospective Tenants Based on Source of Income

Effective September 30, 2018

Oftentimes, landlords require income verification from prospective tenants to better understand tenants’ financial circumstances and ability to make monthly rent payments. If you require such information from tenants, you should carefully review the new statewide “Source of Income” law (RCW 59.18.255) that becomes effective September 30, 2018. This new regulation includes guidelines and prohibitions for landlords when a prospective tenants’ source and amount of income is requested.

First, the landlord must not discriminate against tenants based on their source of income and may not deny a unit to a prospective tenant who, but for their “source of income,” could rent the unit. Source of income includes housing assistance, social security or other retirement income, veterans’ benefits, and any other assistance from a federal, state, local, or non-profit entity.

Additionally, landlords cannot make a distinction or restriction against tenants in price, terms, fees, privileges, or in any of the facilities or services of the rental property based on tenants’ source of income. In short, landlords must avoid acts that preference any source of income over another.

However, a landlord can deny an applicant from renting based on their source of income if: (a) the source of income is conditioned on the unit passing inspection; (b) a written cost estimate of the improvements needed to pass inspection is more than $1,500; and (c) the landlord has not received funds from the landlord mitigation program account to make the improvements. The landlord mitigation fund provides financial assistance to landlords to pay for damages caused by tenants who use HUD’s Housing Choice Voucher Program.

RCW 59.18.255 also recognizes that some landlords require prospective tenants to meet a certain threshold of income to be eligible for rent. Because of this, the new law requires that income from a rent voucher or subsidy be subtracted from the total monthly rent prior to calculating whether the income criteria have been met. For example, if an applicant receives $700 per month in rental vouchers, the unit rents for $1,000 per month, and the landlord requires income of at least twice the amount of rent, then the applicant must make at least $600 per month to be eligible. ($1,000 - $700 = $300; $300 x 2 = $600).

If you have any questions or concerns about these requirements or any other landlord/tenant issues, please feel free reach out to the attorneys at Holmquist & Gardiner, PLLC. 

This is intended to be a source of general information, not an opinion or legal advice on any specific situation, and does not create an attorney-client relationship with our readers. If you would like more information regarding whether we may assist you in any particular matter, please contact one of our lawyers, using care not to provide us with any confidential information until we have notified you in writing that there are conflicts of interest and that we have agreed to represent you on the specific matter that is the subject of your inquiry.