Please click here to view our first article regarding commercial landlord and tenant rights with regards to evictions during the COVID 19 global pandemic.
In this article we are providing updates on the various emergency orders and proclamations in Washington state affecting commercial landlords and tenants:
Orders Applying to All Commercial Landlords and Tenants in Washington:
On December 31, 2020, the Governor of Washington executed Proclamation 20-19.5. This proclamation expires on March 31, 2021.
The only section of Proclamation 20-19.5 that applies specifically to commercial properties is the section on increasing rent. If you are party to a lease executed after February 29, 2020, and the tenant “has been materially impacted by the COVID-19, whether personally impacted and is unable to work or whether the business itself was deemed non-essential pursuant to Proclamation 20-25 or otherwise lost staff or customers due to the COVID-19 outbreak,” then, the landlord cannot increase or threaten to increase the rate of rent.
It is important to also note that all landlords are “prohibited from retaliating against individuals for invoking their rights or protections under Proclamations 20-19 et seq., or any other state or federal law providing rights or protections for residential dwellings.”
The full proclamation can be accessed here.
Orders Applying to All Commercial Landlords and Tenants in King County:
On June 30, 2020, the King County Council enacted Ordinance No. 2020-0191. This Ordinance applies to “Small Commercial Tenant[s]” which are defined as a business entity, including sole proprietorship, corporation, partnership, or other legal entity that:
- Is owned and operated independently from all other businesses. A franchisee with five or fewer franchise units shall be considered owned and operated independently form its franchisor;
- Has fifty or fewer employees per establishment or premises;
- Has either been forced to close due to an emergency order issued by the Governor or has gross receipts from the previous calendar month of 2020 that are less than seventy percent of its gross receipts for the same month in 2019; and
- Is neither a general sales or service business with ten or more establishments in operation located anywhere in the world nor an entertainment use business with five or more establishments in operation located anywhere in the world.
If a small commercial tenant fails to pay rent when due between March 1, 2020 and March 1, 2021 due to circumstances occurring because of the COVID-19 pandemic, then the tenant is entitled to repay rent through a repayment plan. A landlord can only evict a small commercial tenant for failing to pay rent when due between March 1, 2020 and March 1, 2021, if the tenant was offered, and refused or failed to comply with, a repayment plan that was reasonable based on the individual financial, health, and other circumstances of the tenant.
Landlords cannot assess late fees, interest, or other charges arising from the late payment of rent between March 1, 2020 and March 1, 2021.
The full ordinance can be found here.
Orders Applying to All Commercial Landlords and Tenants in City of Seattle:
On December 15, 2020, the City of Seattle Mayor issued Executive Order 2020-12. This order continued the moratorium of evictions and lease terminations of tenancies of any small businesses (50 or fewer employees) and nonprofit corporations. This moratorium is effective until the earlier of (i) the date the Mayor of Seattle terminates the order, or (ii) March 31, 2021. During the moratorium, the commercial landlord is not only restricted from evicting the tenant or terminating the tenancy, but the commercial landlord also cannot charge late fees, interest, or other charges due to the late payment of rent.
For the purpose of the Mayor’s Order, a small business is defined as “any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independently from all other businesses, and that has fifty or fewer employees per establishment or premises.”
A copy of the Mayor’s order can be found here.
The City of Seattle Council Ordinance enacted on April 13, 2020, remains in effect until the civil emergency order proclaimed by the Mayor on March 3, 2020, is terminated. This ordinance provides that landlords in leases with small business or nonprofit tenants, shall not:
- Increase rent during the lease term unless the increase was authorized in a written lease in effect before April 13, 2020; and,
- Renew the lease or enter into a new lease, if the new lease requires a rental payment that exceeds the payment due under the expired lease.
This ordinance also provides small business and nonprofit tenants with the following additional relief:
- If the tenant fails to pay rent when due during or within six months after the termination of the Civil Emergency Proclaimed by Mayor Durkan, the tenant may elect to pay its overdue rent in installments during that period on a payment schedule.
- A written installment payment schedule shall be negotiated between the lessor and the tenant for the payment of rent in arrears, provided that
- the repayment schedule may not require the tenant to pay, in addition to rent due for the month or period, more than 1/3 of late rent within any month or period following the month or period for which full rent was not paid unless agreed by the tenant, and
- rent in arrears shall be paid in full to the lessor no later than one year after the termination of the Civil Emergency Proclaimed by Mayor Durkan
- 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 Proclaimed by Mayor Durkan
A copy of the signed ordinance can be found here.
If you are a commercial landlord looking for options to deal with non-paying tenants, or if you are a commercial tenant looking to enter a payment plan with your landlord, we can help. Please contact shareholder Katie Comstock at email@example.com or 206-960-4596.