HOUSE BILL REPORT

HB 2437

BYRepresentatives Nutley, Leonard, Winsley and Todd

Regulating tenant application fees.

House Committe on Housing

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (7)

      Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Winsley, Ranking Republican Member; Anderson, Ballard, Rector and Todd.

Minority Report:  Do not pass.  (1)

      Signed by Representative Padden.

House Staff:Bill Lynch (786-7092)

AS REPORTED BY COMMITTEE ON HOUSING JANUARY 26, 1990

BACKGROUND:

Concerns have been expressed by advocates for low income people that some landlords use application fees as a means of screening away low income people as tenants.  Since many application fees are nonrefundable, a low income person may lose a significant amount of money by paying several application fees and still have no shelter.

SUMMARY:

SUBSTITUTE BILL:  A landlord may not charge a fee for the privilege of putting a person's name on a list to be considered as a tenant.  A landlord may charge a fee for a background check so long as the fee does not exceed the landlord's actual costs of obtaining the information. A landlord may charge for the costs of using a tenant screening service.  If the landlord does his or her own tenant screening, then the landlord may charge an amount comparable to costs charged by an outside screening service.  A landlord must inform a prospective tenant about his or her rights to correct information provided by tenant screening services or other entities, and must provide the tenant with the names and addresses of any tenant screening service used.  If a landlord requires a deposit to ensure that a tenant will move into the unit, then the landlord must reduce this transaction to writing.  A landlord must credit this deposit to either the tenant's first month's rent or security deposit.

A landlord who violates the provisions concerning application fees may be liable to the applicant for an amount not to exceed $100 .  The prevailing party may also recover court costs and reasonable attorney fees.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The provisions which limited tenant application fees to $25, and required the fee to either be refunded or applied to the tenant's first month's rent are deleted.

A landlord may not charge a fee for the privilege of putting a person's name on a list to be considered as a tenant. A landlord may charge a fee for a background check so long as the fee does not exceed the landlord's actual costs of obtaining the information.  A landlord may charge for the costs of using a tenant screening service.  If the landlord does his or her own tenant screening, then the landlord may charge an amount comparable to costs charged by an outside screening service.  A landlord must inform a prospective tenant about his or her rights to correct information provided by tenant screening services or other entities, and must provide the tenant with the names and addresses of any tenant screening service used.  If a landlord requires a deposit to ensure that a tenant will move into the unit, then the landlord must reduce this transaction to writing.  A landlord must credit this deposit to either the tenant's first month's rent or security deposit.

Fiscal Note:      Not Requested.

Effective Date:The bill contains an emergency clause and takes effect on April 1, 1990.

House Committee ‑ Testified For:    David Pordon, Seattle Tenants' Union.

House Committee - Testified Against:      Nancy Gaxiola, James Griffin Company; Larry Lambeth, Tenant Information Services; Joan Schield; Tenant Screening; Jim Palzer, Premiere Management Company; Gary Schneider, Trans Union Credit Information Company; Arnold Fox, South Sound Rental Association; Ed Weilpp, Inland Empire Rental Association; Evelyn Drews, Park Place Asset Management; Paul Reeder, Reeder Management, Inc.; Julie Watson, Apartment Services; Craig Angelo, The Al Angelo Company; Bruce Schmidt, Rental Research, Inc.; Dean Quest, Prime Locations; Jeff Powell, Washington Association of Realtors; Pam Barrett, Washington Association of Realtors; Willis Cole, I. S., Inc.

House Committee - Testimony For:    The bill will help address abuses that are occurring because of the tight housing market. Most tenants do not realize they have the right to find out why they are turned down for credit.

House Committee - Testimony Against:      Landlords should be able to pass along the costs of a background check to the tenant and charge the market rate.  Tenant screening provides protection to the residents of the community. It is not possible to provide a refund within a 24 hour period.  Tenants are well-served by the current system.