BOMA has been engaged with Seattle City Council Members on what they have labeled a moratorium on rent increases in certain commercial situations.
This Monday, April 13th, the Seattle City Council voted unanimously to pass legislation that establishes a moratorium on commercial rent increases. It will become effective if the Mayor signs the ordinance.
BOMA’s advocacy leadership will continue to engage on behalf of our members and the commercial real estate industry. We are experiencing unprecedented times that have led elected officials to enact moratoriums on evictions and preventing rent increases in some circumstance.
Moratorium on Commercial Tenant Evictions
On March 17th, Seattle Mayor Durkin put in place a moratorium on commercial evictions within the powers of the association with the declaration of a civil emergency and for the duration of the civil emergency. The tenants covered under the moratorium are small businesses (less than 50 or less employees) and non-profit organizations.
Under this order, evictions for non-payment of rent or due to the expiration of the lease's term are prohibited, the property owner will work out a payment plan; and there is to be no assessment of late fees, interest, or other charges due to late payment of rent under this order.
Moratorium on Commercial Tenant Rent Increases
This past Monday, April 13th, the City Council voted unanimously to pass legislation that puts a moratorium on commercial rent increases. This again, covers small businesses and non-profit organizations and will be in place until the civil emergency is terminated.
The range of tenants is defined in more detail and includes tenants that are a franchisee with five or fewer franchise units;have been forced to close due to an emergency order issued by the Governor or Mayor; have gross income that is less than 70 percent than the same period last year.
Actions by the landlord that are prohibited are:
Renew the lease or enter a new lease if the new lease requires a rental payment that exceeds the payment due under the expired lease;
Increase the amount of rent charged for the premises during the lease term unless the increase was authorized in a written lease in effect before the effective date of the ordinance.
Payment Agreements
A tenant that fails to pay rent when due during or within six months after the termination of the civil emergency may elect to pay overdue rent in installments during that period on a payment schedule. The repayment schedule may not require more than 1/3 of late rent within any month unless agreed by the tenant.
Rent in arrears shall be paid in full to the lessor no later than one year after the termination of the civil emergency.
No late fees, interest, or other charges due to late payment of rent shall accrue during or within one year after the termination of the civil emergency.
BOMA’s leadership is very concerned about these steps or any actions that take away the landlord’s rights to manage their properties in a way that is best not only for the property, but also for the tenant. While it is challenging during the stay at home orders, we have been engaged with legislative staff to educate them on the real-world challenges that owners and property managers have and the steps most have already undertaken to work with their tenants.
We are keenly aware of the impact of the stay at home order, especially on our small retail tenants. We are sympathetic to the extreme hardships many of them are enduring and want to work with them in ways that are appropriate, recognizing that owner’s own capital situations vary widely.
However, among our policy makers, there seems to be a disconnect in understanding that there are costs associated with operating a commercial building and the impact the loss of rents will have on properties.
The legislation does not take into account that every landlord tenant relationship is unique and attempts to put one-size-fits-all regulations in place.
We will continue to engage with our elected officials.
Print Page
Email to a Friend
