Senate Bill Report ESHB 2535 (Feb. 21, 2020)

Summary

A Senate Bill Report on ESHB 2535, as of February 21, 2020, prepared by nonpartisan staff for the Senate Committee on Financial Institutions, Economic Development & Trade. The bill, sponsored by the House Committee on Civil Rights & Judiciary, provides a grace period before late fees may be imposed for past due rent, and the report records that it passed the House on February 16, 2020, 92-4. The background describes the Residential Landlord-Tenant Act, including prohibited rental agreement provisions, the definition of rent and the 14-day notice to pay rent or vacate. Under the bill summary, a landlord may not charge late fees unless rent is at least five days past due, and may still serve a notice to pay rent or vacate after rent becomes due. The report lists no appropriation and no fiscal note requested.

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                             SENATE BILL REPORT
                                  ESHB 2535

                                      As of February 21, 2020

Title: An act relating to providing for a grace period before late fees may be imposed for past
    due rent.

Brief Description: Providing for a grace period before late fees may be imposed for past due
   rent.

Sponsors:   House Committee on Civil Rights & Judiciary (originally sponsored by
   Representatives Kirby, Pollet, Ormsby and Santos).

Brief History: Passed House: 2/16/20, 92-4.
   Committee Activity: Financial Institutions, Economic Development & Trade: 2/25/20.

                                      Brief Summary of Bill
          Ÿ Provides that a landlord may not charge late fees for past due rent unless
            the rent is at least five days past due.
          Ÿ Provides that if rent is more than five days past due, the landlord may
            charge late fees commencing from the first day after the due date, until
            paid.
          Ÿ Allows a landlord to serve a notice to pay rent or vacate at any point after
            the rent becomes due.


SENATE  COMMITTEE                  ON      FINANCIAL          INSTITUTIONS,           ECONOMIC
DEVELOPMENT & TRADE

    Staff: Clint McCarthy (786-7319)

    Background: Residential Landlord-Tenant Act. The Residential Landlord-Tenant Act
    (RLTA) regulates the relationship between residential landlords and tenants, defines terms,
    and includes provisions regarding the duties of tenants and landlords, as well as remedies for
    violations of those duties. With some statutory exceptions, the rental of a dwelling unit for
    living purposes is generally covered under the RLTA. "Dwelling unit" is a structure or that
    part of a structure which is used as a home, resident, or sleeping place.


––––––––––––––––––––––
    This analysis was prepared by non-partisan legislative staff for the use of legislative
    members in their deliberations. This analysis is not a part of the legislation nor does it
    constitute a statement of legislative intent.

Senate Bill Report                              -1-                                       ESHB 2535
    One section of the RLTA provides that any provision of a lease or rental agreement that
    waives an RLTA provision is deemed against public policy and is unenforceable. That section
    also expressly prohibits rental agreements from including certain types of provisions,
    including those that:
         Ÿ waive or forgo rights or remedies under the RLTA;
         Ÿ authorize any person to confess judgment on a claim arising out of the agreement;
         Ÿ agree to pay the landlord's attorneys' fees, except as authorized by the RLTA;
         Ÿ agree to exculpation or limit liability of the landlord arising under the law or to
           indemnify the landlord for that liability; and
         Ÿ agree to a particular arbitrator at the time that the rental agreement is executed.

    If a landlord deliberately uses a rental agreement containing provisions they know to be
    prohibited, the tenant may recover actual damages together with statutory damages not
    exceeding $500, costs of suit, and reasonable attorneys' fees.

    Rent. The terms "rent" and "rental amount" are defined under the RLTA to mean recurring
    and periodic charges identified in the rental agreement for the use and occupancy of the
    premises, which may include charges for utilities. It is specified in the definition that these
    terms do not include nonrecurring charges for costs incurred due to late payment, damages,
    deposits, legal costs, or other fees, including attorneys' fees. An exception is included for
    nonrefundable fees or deposits which a landlord permits to be paid in installments.

    A landlord must first apply any payment made by a tenant toward rent, before applying any
    payment toward late fees, damages, legal costs, or other fees, including attorneys' fees. A
    tenant's right to possession of the premises may not be conditioned on the payment of any
    amount other than rent. A landlord is not foreclosed from pursuing other lawful remedies to
    collect late fees, legal costs, or other fees, including attorneys' fees.

    A tenant is liable for unlawful detainer when they continue in possession of the dwelling unit
    after a default in rent, and after a 14-day notice to pay rent or vacate has been served, without
    paying the rent during that 14-day period.

    Summary of Bill: The RLTA is amended to provide that a landlord may not charge late fees
    for past due rent unless the rent is at least five days past due. If the rent is more than five days
    past due, the landlord may charge late fees commencing from the first day after the due date,
    until paid. A landlord is not prohibited from serving a notice to pay rent or vacate at any time
    after the rent becomes due. A rental agreement may not include a provision pursuant to which
    the tenant agrees to pay late fees for rent that is paid within five days following its due date.
    If rent is more than five days past due, the landlord may charge late fees commencing from
    the first day after the due date until paid, and a landlord is not prohibited from serving a
    notice to pay rent or vacate at any time after the rent becomes due.

    Appropriation: None.

    Fiscal Note: Not requested.

    Creates Committee/Commission/Task Force that includes Legislative members: No.



Senate Bill Report                               -2-                                        ESHB 2535
    Effective Date: Ninety days after adjournment of session in which bill is passed.




Senate Bill Report                            -3-                                       ESHB 2535


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