Councilmember Mosqueda Proposes New Tenant Protections for Buildings Up for Sale

The Seattle City Council’s housing committee will take up further discussion and possibly vote on a new tenant protection measure sponsored by Councilmember Teresa Mosqueda today. Her proposal would expand the notice of intent to sell an affordable housing rental building. The current law only applies to multifamily buildings with five or more units when at least one dwelling unit rents at or below 80% of the area median income. In such a circumstance, the property owner is obliged to provide notice to the Seattle Office of Housing (OH) and Seattle Housing Authority (SHA) 60 days before listing the property for sale.

Councilmember Mosqueda’s bill would increase the noticing period to 90 days and expand the requirement to all multifamily buildings (that is, two or more dwelling units). Property owners would need to conspicuously post in the building a notice of intent to sell so that tenants are aware. The notice would need to include information provided by OH on how tenants might be able to obtain funding to aid in purchasing the building. It would also need to provide a link to OH’s website, which contains information on other programs that might assist tenants if the building is sold.

Property owners would be preempted from immediately accepting unsolicited purchase and sale agreements. The property owner would still need to post on-site notices and send written notice to OH and SHA within two days of an offer that would be accepted. The base legislation would subject the property owner to the full 90-day notice period before executing an agreement to sell.

Existing notice requirements specify that the property owner’s name, phone number, and the address of the building to be offered for sale. A new requirement would entail submission of a declaration stating that the property owner has complied with the noticing requirements by transmitting a signed declaration to OH once the 90-day period has begun. Violation of the law would allow the Seattle Department of Construction and Inspections to impose a one-time penalty of $2,000, up from $500 today.

However, an amendment could further modify the the legislation by clarifying how the 90-day notice of intent period would operate procedurally and even shorten it if there is not interest by tenants or affordable housing providers to purchase a building. As drafted, the amendment would do the following:

1. Buildings with two to four rental housing units, tenants, OH, SHA, or a qualified non-profit housing developer would have 15 days from notice of intent to sell to notify the property owner and OH of their interest to purchase the building. If none of those entities express interest in purchasing the building, the property owner would then be eligible to proceed with listing or selling the building.
2. If there is interest, the property owner would be required within three business days to provide the interest party or parties with information on the number of rental units in the building and the rent charged for each unit.
3. Any tenant or tenant group that has expressed interest in purchasing the building would have 15 calendar days to provide documentation from a financial institution or mortgage lender or other bona fide funding source to the property owner that would provide for purchase of the building. If a tenant or tenant group does not provide the required documentation, the property owner would then be eligible to proceed with listing or selling the building.
4. Ultimately, any tenant or tenant group, OH, SHA, or a qualified non-profit housing developer that has provided notice of interest to purchase would have 30 days to accomplish an agreement with the property owner. If an agreement cannot be accomplished during that timeframe then the property owner would then be eligible to proceed with listing or selling the building.

For buildings with five or more rental housing unit units, the process is essentially the same, except that timeframes are slightly extended. Tenants, OH, SHA, or a qualified non-profit housing developer would have 30 days instead of 15 days from notice of intent to sell to notify the property owner and OH of their interest to purchase the building. Any tenant or tenant group, OH, SHA, or a qualified non-profit housing developer that has provided notice of interest to purchase would have 90 days instead of 30 days to accomplish an agreement with the property owner.

Additional tenant protection measures are coming down the pike. Mayor Jenny Durkan intends to transmit legislation to align city law on “just cause” evictions with new state laws that provide greater protection to tenants, including a landmark eviction reform spearheaded by Representative Nicole Macri (D-Seattle) and backed by grassroots advocacy by groups like Washington CAN (pictured in and credited for the featured image). Councilmember Lisa Herbold will be introducing legislation that implements tenant protection recommendations developed by the Seattle Women’s Commission.

Although generally already secured by the aforementioned reform at the state level, the Mayor’s Office says the City’s new “just cause” eviction legislation seeks to protect tenants by:

• “Extending the amount of time tenants are given to respond to a potential eviction by increasing the minimum response time to a notice to pay or vacate from three-days to 14 days;”
• “Granting more advanced notification to tenants for any increase in rental costs by requiring at least 60 days’ notice for all rent increases;”
• “Limiting the potential for eviction for non-payment of fees unrelated to the rental costs of a unit by harmonizing the definition of “rent” to match new state law;”
• “Creating consistency with relocation assistance available to tenants who are forced to move as a result of emergency orders or code violations;”
• “Expanding the eligibility for low-income tenants to receive emergency relocation assistance upfront; and”
• “Improving transactions and notices between landlords and tenants related to non-electronic payments of rent, reasonable notice for planned utility shut-offs, and the distribution of information about the availability of assistance via the Renting in Seattle website.” 

Councilmember Herbold’s legislation would make three targeted changes, according to the Mayor’s Office:

• “Protect domestic violence victims from being held liable by their landlord for property damage caused by their abuser;”
• “Address the financial impacts of tenant-initiated lease terminations; and” 
• “Address affordability barriers created by both lease limitations on roommates at the beginning of tenancy and family members not on leases, in the case of death of a leaseholder, at the end of tenancies.”

These pieces of legislation should be moving forward quickly this summer.