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Wed Feb 8 2017

Seattle's New "First in Time" Ordinance—What Property Owners and Landlords Need to Know in Order to Comply

Back in the fall of 2016, the Seattle City Council issued its final action on Ordinance No. 125114, which included what has become known as the “first in time” policy. The "first in time" policy went into effect January 1, 2017 and affects residential and apartment leasing in the Seattle area. Under this new law, residential landlords must accept the first prospective tenant who has submitted a complete application and meets all of the screening criteria necessary for approval. This new ordinance is shaping up to be quite onerous for Seattle Landlords/property owners and property managers.

Significantly, on December 16, 2016, the Seattle City Council held a special meeting and decided to delay enforcement of the ordinance until July 1, 2017. Their reasoning for this delay was not clear from the Council’s meeting minutes.

Details of the Ordinance

Under the new tenant screening process that will be enforced in July, before accepting a prospective tenant’s application, a landlord must first provide the prospective tenant with information on the landlord’s minimum screening criteria. This notice must include:

  • The criteria the landlord will use to screen prospective tenants and the minimum threshold for each criterion that the candidate must meet, including any criteria that will be used related to the landlord’s consideration of criminal records
  • All information, documentation, and other submissions necessary for the landlord to complete the screening
  • Information explaining how to request additional time to complete an application

If the landlord uses income as a screening requirement, such as income to rent ratios, it must:

  • Subtract any payment from a Section 8 or other subsidy program that reduces the amount of rent for which the prospective tenant would be responsible for from the total monthly rent
  • Include all sources of income as a part of the prospective tenant’s total income (including unemployment benefits and child support), except when the unit is subject to income and/or rent restrictions as part of a housing regulatory or subsidy agreement

After the landlord then receives a completed application (by personal, electronic, or postal delivery), the landlord must note the date and time of receipt. Documenting the chronological order of receipt of applications will be critical for landlords.

If an application is missing any information, the landlord may not automatically deem the application incomplete. Instead, the landlord must notify the prospective tenant of the additional information needed and provide at least 72 hours for the prospective tenant to provide such information. If the prospective tenant is able to provide the additional information by the stated deadline, the prospective tenant will maintain their place in line, based on the timing of their original application.

If a prospective tenant can show that they need extra time to complete an application due to need to ensure meaningful access to the application or for a reasonable accommodation (such as if they have a disability), the ordinance requires the landlord to document the date and time of the request (which will serve as the date and time of receipt if the request is not denied) and not unreasonably deny a request for additional time. If the request is denied, then the date and time of the receipt of the complete application will serve as the date and time of receipt.

Under this process, the landlord must screen applications in the order in which they were received and make offers to qualified tenants in that order. A prospective tenant will not necessarily know his specific position in line, but they can ask the Seattle Office of Civil Rights to investigate by checking the landlord’s records.

Potential Liability

Prospective tenants will have the option to sue a landlord if they believe they have been unlawfully skipped. The potential penalties a violator faces are fairly significant. In addition to any damages a "rejected" tenant may claim, a violator could be assessed up to $11,000 through $55,000 in civil penalties by the City, depending on how many prior unfair practices the landlord had been determined to have committed.

Narrow Exemptions

Certain residential landlords may be exempt from this ordinance. Landlords who rent to a specific vulnerable population, such as domestic-violence survivors, and landlords who are maintaining permanent residence in a single-family dwelling, which they are also renting out (including accessory dwelling units), are not subject to the "first in time" policy.

Our Suggestions

Landlords and property owners who are not exempt should consider implementing at least the following practices to begin compliance with the new policy, even though enforcement is now delayed until July 1, 2017:

  • Itemize all tenant screening criteria you will use in your prospective tenant application form. Be very specific about what criteria you consider, so it is clear you disclosed this to prospective tenants in case you ever get investigated. Who knows—maybe more specific criteria will scare off some "bad apples"
  • Keep detailed records (such as a time stamp) documenting the date and time of your initial receipt of applications and any subsequent request for additional information or request for time extension, in case of a subsequent audit or investigation by the Seattle Office of Civil Rights

But Wait, There's More

The "first in time" ordinance has other onerous features. It adds teeth to existing anti-discrimination regulations, including prohibiting discrimination against renters who use subsidies or "alternative sources of income." Landlords are also now barred from implementing preferred employer programs that give discounts or other incentives to potential tenants who work for specific employers. Furthermore, a landlord must accept a written pledge of payment within 5 days from a Section 8 or other subsidy program, when individuals and families are working to settle their bills and stay in their home.

Need a "pick me up" after all of that? Landlords can take some solace in the fact that the City Auditor will conduct an evaluation of the Ordinance's impact by the end of 2018 to help the City Council determine whether the Ordinance should be amended or repealed.

You can access a copy of the Legislative Summary issued by the Seattle City Council here. Landlords are also encouraged to review the Ordinance Summary issued by the Seattle office for Civil Rights here.

You can contact John McDowall, Tammy Spellacy or Parker Keehn with additional questions at mcdowall@carneylaw.com, spellacy@carneylaw.com or keehn@carneylaw.com.