By Katie Wilson
On June 30, 2023, tenants at three Seattle apartment buildings owned by Artspace, a national nonprofit real estate corporation, received notice of a rent increase effective January 1, 2024. Almost everyone was on month-to-month leases, and if they continued that way, their rent would go up 9.5 percent. But if they signed a new year-long lease, the increase would be only 8 percent.
“After asking for months to view a copy of the new lease, tenants finally received it late on the day after Christmas,” said Zade Gueble, an organizer with the Puget Sound Tenants Union who has been assisting some of the tenants. “They were expected to sign it by that Friday, three days later.” Gueble says tenants at one of the three buildings may have received the lease about a week earlier.
The email landed in some residents’ spam folders. Others were on vacation and didn’t see it until after the new year, automatically bumping them to the more expensive month-to-month option.
Washington state has robust consumer protection laws to protect people from unfair, deceptive and abusive business practices, but these laws don’t protect residential tenants. If your local car dealer tries to scam you, the state might actually do something about it. But if it’s your landlord, you’re out of luck.
The residents of the Hiawatha, Mt. Baker, and Tashiro Kaplan Lofts are all artists—painters, sculptors, dancers, playwrights, and musicians. They’re also low-income, as the units are designated for households making between 50 and 60 percent of the Seattle area median income. Tom Nelson, a tenant at the Tashiro Kaplan who asked to be identified by a pseudonym, says he was on the waitlist for six years before getting an apartment. “There is little to no turnover,” he says. “Many have lived here since the building opened for residential living over 20 years ago, and rarely does someone move out.”
When the tenants examined the new lease language, many were taken aback. It seemed to suggest that their rent could be bumped up to market rate the following year; that the landlord could take, alter, and publish their photos at will; that pets, which many residents have, would now be prohibited without written permission; and that residents weren’t allowed to conduct business from home without written approval.
“For many, the late lease delivery felt like an attempt to coerce them into accepting unfair terms that they had no chance to review or negotiate,” said Gueble.
In a statement responding to questions from PubliCola, Indigo claimed the problem was isolated to the manager of the Tashiro-Kaplan building. “[W]e acknowledge that our dedicated property manager should have proactively communicated with residents well before this date [December 26th], and we regret that this did not happen as expected.” However, both Nelson and Gueble maintain that tenants of all three buildings are facing the same issues.
The state Attorney General’s Office routinely prosecutes businesses that deceive their customers, whether it’s a lingerie company sneakily signing people up for monthly “VIP Membership” payments, or debt adjusters charging students excessive fees and misrepresenting their services and expertise.
Residents of mobile home parks, who own their homes but rent the land underneath, can also turn to the state for help; Washington’s Consumer Protection Act has been interpreted by the courts to cover the Manufactured/Mobile Housing Landlord-Tenant Act. But these laws are useless to the Artspace tenants, because in 1985 the Washington Supreme Court ruled that other renters aren’t protected by the Consumer Protection Act.
Talk to anyone whose job involves trying to assist distressed tenants, and you’ll hear about plenty of unfair and deceptive practices.
“The classic one is security deposit retention,” said Edmund Witter, senior managing attorney of the King County Bar Association’s Housing Justice Project. A tenant moves out and a landlord refuses to return their deposit, citing costs for which the tenant isn’t actually liable under state law. Or a landlord may tell tenants that it’s their responsibility to pay for repairs or pest control (it’s not). Or a landlord may give incorrect termination notices, representing to tenants that they have less time to come up with back rent than they are actually allowed under the law.
Then there’s the Artspace tenants’ new lease, which reads: “At the expiration of your lease term, should you choose not to renew with another lease, your current lease will convert to a month-to-month lease at the current market rate.”
But the three buildings receive low-income housing tax credits and other public subsidies. “They have a covenant with the city that this is supposed to be low-income housing and it’s supposed to stay that way,” said Nelson.
“Threatening to raise the rent to market rate when a landlord can’t is clearly deceptive,” says Witter.
Asked about this provision, Indigo responded, “The term ‘market rate’ as used in the lease agreement does not imply a shift to conventional market rates but rather refers to the highest permissible rents under the affordable housing program, or to the established rates for month-to-month leases.” In other words, according to Indigo, “market rate” doesn’t mean market rate.
What recourse do tenants have when landlords engage in unfair, deceptive, and abusive practices? If a Seattle landlord actually breaks the law—by refusing to do repairs or wrongly withholding a deposit, for example—a tenant can file a complaint with the city and hope for intervention. The state and most other jurisdictions don’t actively enforce tenant protections, so tenants outside Seattle would have to sue to force the landlord to comply with the law. Or, if there are clear monetary damages involved, they could try small claims court.
But what if the problem is language in a lease or notice that contradicts the law? A tenant can point it out, and the landlord may back down. That’s good news for that particular tenant. But the landlord has every incentive to continue putting that same deceptive language into future leases and notices, since the vast majority of tenants won’t realize that it misrepresents their rights. The deception itself has no consequences.
When an unfair, deceptive or abusive practice doesn’t involve unambiguously breaking or misrepresenting a law, tenants have even less recourse. The Artspace tenants’ new lease included extensive language giving the landlord permission to “take, use, reuse, and publish” photos and videos of the tenants “and any minor occupants,” and to use their “name, picture, written comments, and statements” for any lawful purpose, including advertising.
The notion that a person should have to license their own and their children’s identities to a landlord to rent a home is bizarre, and potentially dangerous. “What if a parent and their child are hiding and trying to protect their location from an abusive ex-spouse?” Nelson said. For a building full of artists whose images may be part of their livelihood, it’s doubly offensive. The new lease, he said, “violates the heart of what this place is.”
But there’s nothing outright illegal about this provision. Nor is it illegal to suddenly disallow pets, or prohibit a building full of artists from working at home. Indeed, Indigo says that these terms are “aligned with standard National Apartment Association (NAA) lease provisions” and that the language about photos and licensing allows the company to “use photos from items such as community functions for promotional purposes.”
The company added that they now “recognize concerns about this and will introduce an addendum to remove this clause, affirming there’s no intent to infringe upon residents’ privacy.”
But what if a landlord refuses to bend? “A tenant could bring an action to have a term declared unreasonable and thereby unenforceable, but that’s it,” Witter said. And, he added, “a tenant isn’t likely to do that because no attorney would take that case, since there’s no money in it.”
Of course, tenants can also band together and try to negotiate with their landlord collectively. But they won’t have much support from the law.
Lawmakers have the power to improve this situation. At the state level, the obvious solution is to make landlords liable for damages under the Consumer Protection Act and give the Attorney General the authority to enforce tenants’ rights under both that act and the Residential Landlord-Tenant Act. One of the two rent stabilization bills introduced in the 2023 session, HB 1388, would have done this.
This year’s version, HB 2114, would have given the Attorney General the authority to enforce landlord-tenant laws related to security deposits, just cause eviction, rent increases, and rent increase notices. That bill also failed to pass out of the legislature this year.
But local elected officials don’t have to wait for state lawmakers to act. Seattle City Councilmembers can pass their own ordinances banning unfair, abusive, and deceptive practices, as unincorporated King County and the city of Kenmore have already done.
In Kenmore, a landlord who violates the law banning deceptive practices has to pay the tenant “the greater of double the tenant’s economic and noneconomic damages or three times the monthly rent of the dwelling unit at issue, and reasonable litigation costs and attorneys’ fees.” By attaching meaningful consequences to unfair, deceptive and abusive practices, landlords might actually get sued sometimes, creating a stronger incentive for them to clean up their act.
“This is what makes consumer protection laws work in general,” Witter said. “Even when you are suing over a $15 toaster, UDAP [unfair, deceptive and abusive practice] laws encourage a person and an attorney to bring them.”
Until then, tenants are at the mercy of landlords and management companies. Indigo says their “ethos” includes “[e]ncouraging our residents to engage with their lease agreement. … We believe in clear communication and have always been here to provide answers and clarity when needed.”
“Indigo management has not responded to a single email or certified letter about the lease, and their onsite manager is unable to help,” Nelson said.