Court Tosses Seattle Law That Limited Tenant Screening

by Chris on April 9, 2018

Last year, Seattle’s City Council passed an ordinance that required landlords there to establish minimum qualifications, to advertise those minimum standards, and then accept the first minimally qualified applicant. Dubbed the “first-in-time” rule, the ordinance prohibited landlords from considering applicants with higher qualifications, or applicants interested in better leasing terms, such as long-term leases.

Under the rules, the initial applicant could apply, and then wait several days to complete the application process, including providing supplemental documentation. While that time period ran, landlords were forced to turn away more eager applicants.

Landlords in the city, represented by Pacific Legal Foundation, mounted a legal challenge to the first-in-time rule based on alleged violations of constitutional rights. This week, the judge ruled in favor of the landlords on those constitutional challenges.

In the written order, the judge praised the intent of the law, which was to eliminate unconscious bias in rental housing, as well as the resulting requirement that landlords standardize their tenant screening criteria.

However, citing the rule’s “sweeping overbreadth”, the court found the first-in-time rule an unreasonable means of pursuing anti-discrimination initiatives. The law violates Washington’s state constitution because it unfairly impacts a landlord’s ability to exercise discretion when choosing between several qualified candidates, according to the court.

Relying on a previous case involving a mandatory right of first refusal provided to occupants of a mobile home park, the court ruled that the discretion to lease to specific tenants is synonymous with the discretion to sell a property to whom the owner sees fit. The government cannot take this right without due process of law and payment of fair compensation. The court deemed choosing a tenant a “fundamental attribute of property ownership.”

The court found that the law was not balanced despite a few concessions offered to landlords, specifically the ability to set their own rental criteria. Taking away the right to negotiate with a specific tenant is a key element of the right to freely dispose of property, the court found. The court states that the city cannot “eliminate ordinary discretion because of the possibility that some people may have unconscious biases” because that goes beyond the power of government.

The judge also rejected the city’s argument that the rule supported public policy. Here, the court found that the “taking” of property was not for public, but rather private use, a violation of the state’s constitution.

Landlords also complained that the rule’s notice requirements — which dictate how landlords could communicate with rental applicants — unfairly limited free speech. The court agreed, ruling that the rule bypasses less oppressive alternatives for addressing unconscious bias. The notice requirements “not only constrains the means by which landlords communicate, it also controls the content of that communication.” The judge cited as an example the inability to communicate informally with specific rental applicants. The city violated free speech rights by “prohibiting advertisements based on content and dictating how landlords can advertise.”

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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