King County Superior Court Upholds Seattle Ordinance’s Cap on Move-in Fees and Security Deposits for Tenants

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The King County Superior Court recently upheld a Seattle Ordinance that limits the amount tenants are required to pay for move-in fees and security deposits.

Seattle Ordinance No. 125222 (the “Ordinance”), which was adopted by the Seattle City Council on December 12, 2016, limits the amount that landlords can charge tenants in up-front charges, including move-in fees, security deposits, pet security deposits, and last month’s rent.  Specifically, the Ordinance limits security deposits and move-in fees to one month’s rent; pet damage deposits to one-quarter (25%) of the first month’s rent; and non-refundable move-in fees to ten (10) percent of the first month’s rent.  The Ordinance also allows tenants to pay for these costs in installments over a six-month period.

Shortly after the enactment of the Ordinance, a local landlord group brought an action against the City of Seattle (the “City”), arguing among other things, that the Ordinance violated the state’s ban on rental control (RCW 35.21.830) and the taking clause of the Washington State Constitution.

In upholding the Ordinance, the Court held that security deposits and other costs regulated by the Ordinance do not fall within the definition of “rent.”   The Court examined the definition of rent under both Webster’s Dictionary and the Washington Residential Landlord Tenant Act.  In doing so, the Court held that “rent” means the periodic payments made by the tenant to the landlord at fixed intervals (i.e. on a monthly basis) for the purposes of using the landlord’s property, and therefore, the Ordinance’s regulation on these type of up-front fees was not preempted nor prohibited by RCW 35.21.830.

If you have any questions about landlord-tenant matters, please contact one of the attorneys in Helsell Fetterman’s Real Estate and Land Use Practice Group.

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