Protection of Seller Opportunities to “Rent-Back” Following Closing

In 2023, REALTORS® won an important victory when the legislature exempted short-term seller rent-back agreements from the coverage of the Washington Residential Landlord-Tenant Act (RLTA).

However, a trial court eviscerated the exemption in Federal Way where voters approved eviction protections for tenants that are broader than renter protections in state law.

As a result, earlier this year when Tukwila was considering opportunities for expansion of tenant protections, SKCR weighed-in with the Planning Commission and staff. We explained the importance of not exceeding the scope of state law when defining “just cause” evictions. Our admonitions were well-received.

We were especially encouraged because Tukwila, Burien and SeaTac have been at the forefront of efforts in South King County to expand tenant protections, apparently not realizing the potential negative impact on buyers and sellers in real estate transactions, as well as the potential for consequences on city REET revenues if transactions are delayed, or sales fail.

Now, there is more encouraging news: In a case involving Auburn’s rental protections, the Washington state Court of Appeals ruled recently that eviction protections in Auburn are invalid because they place limits on landlords that are more onerous than state law.

The case, Valley Cities v. Eddines (#84964-6-1), involved a holdover tenant who was no longer eligible to continue renting subsidized housing because he had completed a training or educational program. Valley City sought to evict him under the RLTA, and the tenant refused to vacate based on Auburn’s ordinance. But the Court of Appeals said, “…Because the city ordinance categorically forbids what state law permits, the superior court correctly concluded that the ordinance is preempted by state law.”