HOUSE BILL ANALYSIS
SSB 6663
Title: An act relating to preserving federally assisted
housing and minimizing the involuntary displacement of tenants residing in such
housing.
Brief
Description: Preserving federally
assisted housing and minimizing the involuntary displacement of tenants
residing in such housing.
Sponsors: Senators Wojahn, Prentice, Winsley and
Kohl-Welles.
BRIEF SUMMARY OF BILL
CProvides an exemption from the
12-month advance notice requirements for owners of federally assisted housing
that enter into an agreement to continue the low-income use restrictions.
CRequires additional information
in the 12-month advance notice that is sent to tenants, public housing
agencies, local governments, and the Department of Community, Trade, and
Economic Development.
CMakes owners of federally
assisted housing subject to statutory damages for failure to provide adequate
notice to tenants and civil penalties for failure to comply a written notice to
comply with the notification requirements
HOUSE ECONOMIC DEVELOPMENT, HOUSING & TRADE
COMMITTEE
Staff: Kenny Pittman (786-7392)
Background:
The State=s Residential Landlord-Tenant Act
requires owners of federally assisted multifamily rental housing developments
to give tenants a written 12-month advance notice prior to the expiration of a
rental assistance contract, or prepayment of an obligation that would allow
early termination of specific low-income occupancy requirements. The federal
assistance is provided either through the U.S. Department of Housing and Urban
Development or the U.S. Department of Agriculture--Rural Development, and can
be in the form of direct loans, loan guarantees, mortgage insurance, or
project-based rental subsidies. The owner of the federally assisted housing is
not prohibited from terminating a rental assistance contract or prepaying the
federally assisted mortgage or loan.
The 12-month advance notice must
be given to each tenant, local government officials, and the Department of
Community, Trade, and Economic Development (DCTED). The notice to the tenants
must include the date of expiration or prepayment and the effects, if any, that
the expiration or prepayment will have on the tenant=s rent and other terms of their
rental agreement. The notice to the DCTED and local governments must contain a
variety of information designed to help them assess the impact of the
expiration or prepayment.
During the 12 months following
the notice, tenants may not be evicted (except for good cause), rents may not
be raised, and the terms of the rental agreements cannot be modified except as
permitted under the existing agreement.
The owner of the federally
assisted multifamily rental housing development is liable for damages suffered
by tenants, plus reasonable attorney fees, as a result of not providing proper
notification to tenants and governmental bodies.
The 12-month advance notice
requirements do not apply to owners participating in the section 8 rental
assistance certificate or voucher programs.
Summary of Bill:
12-Month Advance Notification--Application
An owner of federally assisted
housing is not required to give the 12-month notice on either the prepayment of
a mortgage or loan or termination of a rental assistance contract if: (1) For
prepayment of a subsidized mortgage or loan, the owner has entered into an
agreement with a governmental agency to either continue existing or impose new
low-income use restriction for a period of at least 20 years; or (2) For
expiration of a rental assistance contract, the owner has entered into an
agreement to renew the rental assistance contract for a minimum of 5 years,
subject to available funds.
The 12-month notice given to the
DCTED and local governments must also be given to public housing agencies that
would be impacted by the termination of the rental assistance contract or
prepayment of the mortgage. A copy of the agreement must be posted in a
conspicuous place at the housing development.
12-Month Advance Notification--Owner=s Duty
The parties required to receive
the 12-month notice of possible prepayment of the mortgage or loan or
expiration of the rental assistance contract is expanded to include public
housing agencies that would be responsible for administering tenant-based rental
assistance to tenant that would be displaced by the prepayment of the mortgage
or loan or expiration of the rental assistance contract.
The owner of the federally
assisted housing must provide a copy of the 12-month notice of possible
prepayment of the mortgage or loan or expiration of the rental assistance
contract to new tenants that move in after the notice has been given, but
before the prepayment or expiration dates. The notice must be given before the
execution of the rental agreement or payment of any deposits.
12 Month Advance Notification--Contents
The required contents in the
12-month notice is expanded to include: (1) whether the owner (i) intends to
prepay the mortgage or loan or renew the rental assistance contract subject to
available funding or (ii) is seeking additional financial incentives or higher
rents as a condition of remaining in the federal program; (2) the owner=s reason for their action; (3)
the owner=s plans for the housing
development, including any timetables and deadlines for actions to be taken by
the owner and any required governmental approvals; (4) the anticipated date of
prepayment of the mortgage or loan or termination of the rental assistance
contract; (5) the effect of the prepayment or termination on the tenants= rents and other terms of their
rental agreement; and (6) a statement that the additional information will be
provided on the local government, on the local public housing agency, and on
the DCTED.
The required notice to the clerk
of the local government where the housing development is located is revised to
require information: (1) on the current rents and projected rent increases for
each affected tenant, without disclosing the identities of individual tenants;
and (2) the age, race, family size, and estimated incomes of applicants on the
waiting list of the housing development, without disclosing the identities of
individuals on the waiting list.
All owners of federally assisted
housing must: (1) post a copy of any notices they send to the clerk of the
local government where the housing development is located, the local public
housing agency, and the DCTED; and (2) provide copies, to a state or local
government agency, of any feasibility or market analysis, or property
inspection reports required by a federal agency.
12 Month Advance Notification--Failure
to Comply/Penalties
A tenant of federally assisted
housing may recover statutory damages of not less than $500, but not more than
$2,500 if the owner fails to provide the 12-month notice. An owner that fails
to comply with a written demand to provide the required notification, may be
subject to civil penalties of $1,000 per month for each housing unit in the
federally assisted housing development, up to a maximum of $12,000 per unit.
All civil penalties collected must be deposited into the Washington Housing
Trust Fund.
Department of Community, Trade, and
Economic Development--Responsibilities
The DCTED must: (1) consult with
interested stakeholders and develop information on the legal rights,
responsibilities, and options of owners and tenants when the owner of federally
assisted housing prepays the mortgage or loan or terminates the rental
assistance contract; and (2) provide written information to owners of federally
assisted housing to assist them in meeting the state=s 12-month notice requirements.
Miscellaneous Provisions
An owner of federally assisted
housing that prepays the mortgage or loan or whose rental assistance contract
expires, but continues to operate the property as residential housing may not
evict a tenant residing in the housing unit, except as authorized by the
applicable federal assistance program.
It is considered an unfair
practice for an owner who continues to rent housing units, to refuse to rent a
housing unit to any tenant who resided in the housing unit while it was
federally assisted housing because the tenant will have to rely on tenant-based
rental assistance to pay for a portion of the rent or the owner does not wish
to participate in a government funded tenant-based rental assistance program.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill
contains an emergency clause and takes effect immediately.