All Forum Posts by: Brian Hughes

Thanks @Michael Haas.    I have a path toward all those things.   I'm pretty sure my building,   which is currently 4 units, was constructed with the intent/expectation that this storage area which is about 350sf and is already drywalled and painted could either be converted to another unit,  or used to expand the unit above it via an interior staircase.  The meter base has room for a 6th meter already,  adding the plumbing and breaker panel would be relatively easy (crawlspace access under the entire lower floor where this space and the meter base/laundry area are) and adding egress windows is also possible.  The area is entirely above grade on 3 sides and about 3/4 below grade on the back wall,  so windows would get installed along the front.   The building already has 7 parking spaces.

I suspect the reason it wasn't built out as a unit originally was probably so that the property could be financed with conventional fanny/freddy loan.   but then it was built in 1980 I have no idea what the rules were like then.   The other reason may be that zoning did not allow for the additional unit when built.

When I looked into finishing this area in about 2016, (this is city of Burien, not seattle btw)  the sticking points were that they wanted the entire building retrofitted for current insulation standards and firewall ratings and addition of sprinkler system.   This would have required gutting the entire building even though the newly finished area would barely exceed 10% of the floor area of the overall building. 

That said, now that we have been in 'housing crisis' mode for a few more years, and more construction and architect types are available due to economic slowdown, it might be worth revisiting. If somebody who is familiar with working with permitting were to interface with the city maybe they would know how to get things done. Like perhaps the zoning issue (the lot was actually downzoned after the building was constructed, it isn't even technically legal for number of units present right now) could be gotten around if the new unit was classified as an ADU.

Thanks
 

@Michael Haas out of curiosity what does it usually take to legalize an existing unit (lets say it was basically well constructed basement ADU, but built a decade or more ago without any permits/etc

I don't have any such situation so just a hypothetical question,   though I do have some extra storerooms at one of my properties that would be best converted to a studio unit ; but when I investigated this with the local municipality they basically wanted me to upgrade the entire building to current code standards in order to be able to finish out that space as a 5th unit.   I would have been fine with doing some reasonable upgrades in the space to be redone and some minimal-impact work elsewhere but I was not about to gut the entire building to upgrade all the insulation and firewalls and add a sprinkler system which is what they wanted.   (building built 1980)

Presumably the rule that most SFR lots can now accomodate 2 ADU's in addition to primary home (either 1 DADU and one ADU or 2 ADUs) and owner occupancy is no longer required. In other words, SF zoning is really triplex zoning.

Of course this is tempered by extremely anti-landlord policies put out by city council over the last 5-7 years.

The problem with the payment plan requirement,  at least the city of seattle implementation, is if the tenant defaults on it,  I believe the ordinance specifically states that this default cannot result in additional fees, ever; and cannot be used as grounds for eviction.   In other words,   the deposit and last months rent are optional (at least, the 5 installments after the initial move in)

Mitigations:  charge full month for deposit and full month for last months rent if market will bear.   You are at least guaranteed 1/3 month up front then,   not a huge cushion but in the range of some deposits before the rule.    Advertise in advance of availability, and charge a holding deposit equal to security deposit for the new occupant,  holding deposits I believe are still allowed.   And,  of course,  review your criteria insofar as creditworthiness,  rental history,  etc.

You also don't have to offer a payment plan if the total of move in costs is less than 1/4 months rent,  I think.    That's practically nothing though insofar as a deposit goes,  unless you have a rental you can charge $2000+ in rent on.

I typed most of this from memory,  so anybody reading this should ignore me and go read the ordinance instead to make sure I got my facts right.

@Corban Anderson

https://www.rhawa.org (rental housing association of washington) is a great resource - they offer frequent new landlord orientations and other trainings, as well as networking/mixer opportunities.  If you are at all serious about this join the group.   On an annual basis its very inexpensive and the education opportunity is huge.   There are also lots of real estate focused groups on meetup.com and similar to choose from for various types of property and regions.   City of Seattle puts on its own 'renting in seattle' trainings monthly - very worthwhile if considering being a landlord in city:  https://www.seattle.gov/rentinginseattle and https://www.seattle.gov/rentinginseattle/news-and-events

For a viewpoint from the other side,  but aside from the (unsurpisingly) tenant-advocacy centric point of view pretty factual when it comes to actually describing landlord tenant law is the tenants union website:  https://tenantsunion.org - this is where your tenants would likely go at some point or other if they are having a contract dispute with you so worth looking at.

Other municipalities and counties have their own patchwork of landlord tenant rules on top of statewide RLTA - best thing to do is go to the city/county website typically cityname.gov and look for landlord/tenant ordinances.    Also look for local newsletter/blogs to get a feel for the level of tenant advocacy/activity in the area.

@Corban Anderson

Seattle is also at the forefront of 'progressive' policies around renter/tenant protections.   These invariably are designed to shift risk, expense, responsibility, bureaucratic hoops, and blame to the landlord/owner.   Don't invest in seattle unless you have reviewed all of this and are willing to work within it and any other progressive goal for housing policy, since pretty much everything proposed here has eventually been adopted.   For example,  while theoretically temporary right now nobody can evict a tenant for nonpayment or behavior in violation of rental agreement, unless it presents an immediate health and safety risk,  period.    So right now if you have a renter in seattle and they either cannot or will not pay rent,  or they decide to sell all your apartment appliances and fixtures on craigslist,  you have zero legal recourse until late this year at the earliest.  In the meantime you are still expected to meet all your responsibilities as a landlord.

This is one example of MANY.  

That said,  other municipalities in the region while perhaps still more tenant friendly than say much of the midwest/south might be are still much more balanced overall,  and might be worth focusing on.   That's my plan anyway.

Good luck.

Unfortunately the COVID situation is the excuse that some members of Seattle leadership needed to try out housing policies they have been wanting long before the emergency declaration - no late fees on rent,  no evictions for any reason,  housing payments basically optional,  landlords unable to enforce any rental agreement terms.

They aren't done yet either - another ordinance is already in the works preventing us from using eviction history in screening potential applicants also supposedly temporary for 6 months after the emergency orders end,   and it also extends the prohibition on any late fees for a year.

I hate to say it but I have before and I will again - do not invest new money in rental properties in Seattle without pricing in all these additional risks.    If you have rental property now,  especially if you only have one or a few units,  make sure you have an exit strategy.

Note:  right now all indications in Seattle, at least from what I have seen from my limited but invested point of view seem to be that most tenants are doing their very best to keep paying their rent.  We should all thank them for that.   I have one tenant out of 7 that is 1/2 month behind for April but they payed all of May - and May was supposed to be worse.  Nationally it may be May is worse, but at least in Seattle things seem to be holding up OK so far but it is still early.   Also the much ballyhooed rent strikes for May being pushed by some of our local city council memberships I haven't heard anything about,  probably meaning they didn't amount to much.    I suspect this is also an indicator that despite the loud calls by some factions for this type of action,  most people realize its a lose/lose proposition.

The risk with all these eviction and late fee bans is in the long term it probably will 1) erode the sense of responsibility around paying rent (and costs for any other essential services) and 2) attract the type of people who are more likely to take advantage of such a situation for their own gain.

Make sure you study up on landlord tenant laws in the jursidiction(s) you are interested in.   Whatever you see now is likely to get worse before it gets better as well.

keep in mind also that assuming the emergency declarations end as scheduled in june,  this 6 month extension will end just as seattle's winter eviction ban kicks in,  so for many owners its really March 2021 before you can realistically evict again.   (the winter ban doesn't apply I think with less than 4 units (confirm this,  i don't remember if its less than 4 or less than or equal 4) 

Technically the 6 month ban does require the tenant to demonstrate that they actually suffered financial distress due to COVID,  but my understanding (not a lawyer!) is that its very broad.  basically they only have to self affirm they were affected,  and it doesn't give any minimum thresholds,   so if they paid money for a face mask they would not otherwise have purchased that probably qualifies.

I am not an attorney.

There is currently a WA STATEWIDE moratorium on evictions and other actions by landlords to enforce collection of rent through June 4th:   

https://www.governor.wa.gov/sites/default/files/20-19.1%20-%20COVID-19%20Moratorium%20on%20Evictions%20Extension%20%28tmp%29.pdf?utm_medium=email&utm_source=govdelivery

Your own local jurisdiction may have additional or different rules,  and your mortgage if any may put you under federal rules too.  Research all of that.

Be sure that any actions you take are in compliance with above.   The WA statewide emergency order explicitly calls out that landlords cannot threaten late fees or evictions during this time. (Yes, is annoying and stupid and your situation is exactly the grade A example why)

I would verbally communicate with the tenant and explain (in a 'nonthreatening') manner - don't use the terms like fine, fee, or "eviction" - that based on your understanding that they have not been impacted personally by COVID-19 insofar as income or ability to work that they should be able to, and you do expect them to continue to pay rent,   and while you will comply with all emergency orders, unpaid rent will continue to accrue and is expected to be repaid.    

Once the emergency is over,   propose a payment plan to them per the emergency rules.   If they have still been working,   start by offering 3 months to catch up.   They will probably counter at something a lot longer,    so counter at 6 months and remind them that since they haven't paid rent and haven't lost income they should have the funds on hand.   (Don't imply they have wasted the money elsewhere,  even if there is a brand new car in the driveway,  etc)   This all needs to be documented so do it in something like an email chain making sure to identify their full name, the property,  and reference important lease terms like the effective date, deposit amount, rent amount,  how much they are behind, etc.  If they still refuse,   at this point you have offered a reasonable payment plan,  AND have adjusted it to more favorable terms during the negotiation.

Document everything, and if it comes to it hire a professional firm that handles evictions. I haven't had the pleasure of dealing with one myself yet but I would never try to do it any other way. If you have your property under an LLC you cannot DIY represent yourself anyway.

Also,  consider approaching your local media outlet or writing a letter to editor of newspaper and contacting your representative government officials to let them know that you are a landlord who has a tenant who is able to pay rent but has taken advantage of the terms of the emergency eviction moratorium and refuses to pay rent.   Be factual and concise and don't name call or disparage the tenant,  just describe their actual behavior.

+1 on groups like WA LL association and RHA  (rental housing association of WA)