WA Supreme Court upholds Seattle’s first-come, first-served law

19 Replies

https://www.seattletimes.com/seattle-news/politics/washington-state-supreme-court-upholds-seattles-first-come-first-served-law-for-renters/

The Washington state Supreme Court has upheld Seattle’s first-come, first-served law for renters, believed to be the first of its kind in the country.

In a unanimous written opinion published Thursday, the court rejected claims by landlords who said the groundbreaking law amounted to a regulatory taking of private property and who said it violated their due-process and free-speech rights under the state Constitution.

Other cities will follow suit. Typical politics by trying to make housing fairer, they only restrict it. Soon, it will not be worth being in the landlord business.


The measure will require landlords to disclose screening criteria with their listings and keep track of the date and time they receive each application


Talk about Government intrusion into private business - but it is Seattle, expect nothing less.

Definitely government intrusion and not surprising that a major city is dictating what a private citizen can do with their property. If you haven't been paying attention the last 100 years, please know that this will continue. And what happens in Seattle or San Diego or New York will eventually make it's way to the small towns.

As a private Landlord and Property Manager, this practice makes sense. If you set the criteria necessary to qualify for your rental and someone meets that criteria, why wouldn't you rent to them? Holding out for someone that's potentially better is unfair to the original applicant that already met your standard.

It also protects the Landlord from claims of discrimination. Example: A black, single mother applies for your apartment on Monday at 9am. She has poor credit but manages to squeak through and is approved that same day at 3pm. At 3:05pm, a white male submits an application for the same rental. You screen him and discover he is about the same as the single mom but has a significantly better credit score. You approve the male and tell the female she's denied.

Even if your screening were based solely on the data, the single mother could claim you discriminated against her because she is black or because she is a single mother, both protected classes. It doesn't matter if it's true; you would have to prove your case in court and you would have a hard time doing so because she met your criteria and should have been approved.

If you are in a state that allows you to choose the "best" applicant instead of "first come, first served" then you should clearly disclose that to your applicants up front and heavily document your decision to protect yourself from any claims of discrimination.

Personally, I think it's best practice to offer the rental to the first qualified applicant.

Originally posted by @Nathan G. :


Personally, I think it's best practice to offer the rental to the first qualified applicant.

I always offer it to the first qualified candidate anyways as well.  I always kind of think if you are getting 5 qualified applicants...you probably set your rent too low to begin with if you are getting a ton of applications.

 

@Nathan G. True I agree that it helps prevent against discrimination. In Seattle I have had a few friends who applied and paid a fee for rental applications only to lose out in the end. They were qualified but weren’t the “most qualified”. In Seattle we can’t do background checks as well, only credit checks. We have a socialist on our city council that is also talking rent control. I feel the restrictions on landlords are getting tighter. Do I raise my standards and potentially have a harder time filling vacancies or lower them and fill it with someone less qualified? I’ve only been doing this 4 years. What qualities should I be looking for or screening in a potential tenant? All things I need to consider.

Originally posted by @Jess Haas :

@Nathan G. True I agree that it helps prevent against discrimination. In Seattle I have had a few friends who applied and paid a fee for rental applications only to lose out in the end. They were qualified but weren’t the “most qualified”. In Seattle we can’t do background checks as well, only credit checks. We have a socialist on our city council that is also talking rent control. I feel the restrictions on landlords are getting tighter. Do I raise my standards and potentially have a harder time filling vacancies or lower them and fill it with someone less qualified? I’ve only been doing this 4 years. What qualities should I be looking for or screening in a potential tenant? All things I need to consider.

Ya seems to me landlords will raise their standards that they advertise.. then i guess if they want they can take someone with lower standards but dont have to take first come first served since they did not meet the standard..   ???  Oregon just passed state wide rent control. although its mainly moot it allows rents to rise higher per year than what is reality in the free market.. were it does affect is those looking for value add situations  IE syndicaators looking to snag troubled properties raise rents real quick and retrade.. that could be tough. 

 


Results I expect to see (@Jess Haas ):

~Higher FICO req

~4-5x Income-to-rent req (avg 2bd is around $2,200/month so about $9-10k/month combined income if 2 applicants or a couple)

~More referrals from previous landlords

Amazon trying to buy the elections totally backfired after Warren and Sanders decided to become involved. The current city council became more progressive after our recent elections so expect more regulations to come in the future: rent control, lax penalties for eviction and late payments, more checks and balances on landlords, increased property taxes.

Who votes for these people?


part of me wants to feel bad for property owners. But fact is, the writing has been on the wall for many years. Anyone who’s bought a property there in the last decade knew what they were getting. Regulatory risk is just as much a risk factor as anything else. 

Well, the laws might be anti property owner but at least the returns are low :)

Originally posted by @Ned Carey :

@Nathan G. Well why shouldn't I be able to show the property many times on a weekend and then choose the best of those applicants?

I think that's different. If you receive multiple applications and process them all at once, that's a pretty fair system. This is talking about an application that is approved but held while continuing to accept applications from others to see if you can find someone better.

There is a very successful property manager in San Antonio that chooses the "best" applicant. He was sued and it allegedly went to the Texas Supreme Court and he won by proving his system was not discriminating against any protected class. But it still sounds risky to me and it just doesn't seem like an honest, fair way to treat people.

 

I implemented  a better more advanced screening system that I use . By utilizing it I can mitigate risk , end this foolishness and the government intrusion . I call it “ I’ll rent to whoever the he€€ I want to “ system

Originally posted by @Nathan G. :
Originally posted by @Ned Carey:

@Nathan G. Well why shouldn't I be able to show the property many times on a weekend and then choose the best of those applicants?

I think that's different. If you receive multiple applications and process them all at once, that's a pretty fair system. This is talking about an application that is approved but held while continuing to accept applications from others to see if you can find someone better.

There is a very successful property manager in San Antonio that chooses the "best" applicant. He was sued and it allegedly went to the Texas Supreme Court and he won by proving his system was not discriminating against any protected class. But it still sounds risky to me and it just doesn't seem like an honest, fair way to treat people. 

 Maybe I'm setting my rents too low, but I am getting multiple applications for my rentals. But with this new law it seems like I have to give it to the first person who finishes applying. I am not trying to discriminate but if I had to choose between young college kids or a family, Im going to want to go with family. 

Originally posted by @Jess Haas :

 Maybe I'm setting my rents too low, but I am getting multiple applications for my rentals. But with this new law it seems like I have to give it to the first person who finishes applying. I am not trying to discriminate but if I had to choose between young college kids or a family, Im going to want to go with family. 

No, you have to offer it to the first "qualified" applicant.

If you have several people applying at once, your standards may be too low or you're failing to pre-screen them. Talk to them on the phone or in person. Let them know your basic qualifications like verifiable income that is 3x the rent or greater, no criminal history, no pets, no smokers, Landlord references for the past two years. If they say they can meet that, then let them apply and screen them to prove they are worthy.

 

While it annoys me that the city council would not consider a carve-out for small landlords (those who hold just a few units), there are many ways to protect one's investment that I have learned about, but not needed to test yet.  I had one unit turn over during the few months that this law was in effect, and I was clear with applicants about what was expected.  Things fell in line naturally, with the most qualified candidate immediately submitting a full application and the less qualified holding back because of screening fees.  In a case where there is an open house or multiple showings on one day, it is possible to only accept applications via snail mail, ensuring that they all arrive on the same day, thus allowing the landlord to pick among them which is the "first" he/she opens.  It's probably good for landlords to learn to be super clear about their expectations in advance anyway.  It's less clear how a court would handle an expectation of a specific skill such as gardening required in a tenant, or if landlords can state high expectations and then choose when to "relax" certain standards such as credit score.

Would this apply to owners that are house hacking? Especially in a SFH when you are renting by the room, wouldn't it be expected that you will be slightly biased as you choose your renters since they will also become your roommates?

Originally posted by @Jeff Willis :

Other cities will follow suit. Typical politics by trying to make housing fairer, they only restrict it. Soon, it will not be worth being in the landlord business. 


The measure will require landlords to disclose screening criteria with their listings and keep track of the date and time they receive each application


Talk about Government intrusion into private business - but it is Seattle, expect nothing less.

any online landlord SaaS service will easily keep track of dates and times of each application.  Disclosing criteria is a no brainer. why would NOT want to do that? 


I have been operating on the first come first served idea since I started. This really helps me ....   The first qualified candidate  wins. simple.

And I will say again, landlords only have themselves to b lame for the tightening of the rentals laws. There are some that really do damage to the perception of the rest of us. 

Originally posted by @Trevor Jaye :

Would this apply to owners that are house hacking? Especially in a SFH when you are renting by the room, wouldn't it be expected that you will be slightly biased as you choose your renters since they will also become your roommates?

The Seattle law of First in Time does not apply to mother in law units or backyard cottages, but does apply to duplexes/triplexes where the owner lives. It will be interesting to see how this plays out, because this last July, Seattle also passed new land use legislation that allows up to 2 additional units on a single family home property (one attached accessory dwelling unit and one detached ADU). So if the owner lives in one, they can be as choosy as they want as long as it's not zoned as a duplex/triplex.

 

The ruling should make it easier for otherwise qualified registered sex offenders to rent an apartment.  Ok, you may be able to add "no registered sex offender need apply" to a list of qualifications.  No convicted murderers either.  No armed robbers... oh, wait... you may have to clear this with an attorney because such a requirement might discriminate against certain disadvantaged demographics.

But what if a prospective tenant arrives at an interview with you piss drunk and/or mile high?  Are you going to require all tenants to undergo alcohol and drug testing?

^^ thats the problem with not having any leeway in the screening process.    You sit down (either in a vaccuum or with your laywer, some acquianance with a rental, etc and hash out your criteria,  then somebody shows up who meets those criteria but are exhibiting some behavior,  or something comes up in the screening you didn't anticipate but which is a huge red flag,  but now you are stuck and would have to offer them the unit.

It seems nuts,  but the what if somebody shows up totally drunk has happened to me - multiple times.   It seems to be such a no brainer,  but yet once I had a group of three show up,  a couple and some friend,  and the friend was so drunk he tripped and fell and knocked over a bunch of the current tenant's belongings.   At that point I kicked them all out  (this was before first in time)  -  another time different unit a completely drunk, belligerent guy drove to the appointment, and when he saw that I was already taking an application from another party ahead of him, got belligerent,  and also argumentative when I tried to explain my screening process was not negotiable.  Again, kicked him out.   with first in time if I don't have "applicant must not be under influence of drugs or alcohol" and "must not be beliggerent or aggressive" on my criteria, then legally I cannot consider it.

Like most of these other renter protections,  first in time is designed to shift risk onto the landlord,  and corner them into having to offer housing to somebody unqualified.