City Bans Landlords From Using Rent-Bidding Websites

by | Jul 30, 2018 | Rental Property Management Tips

Seattle landlords are battling the city’s new moratorium on using rental platforms that allow tenants to bid on rent. The move to ban the use of the websites is ironic given Seattle’s reputation as the “new center” of the tech boom.

Local lawmakers specifically singled-out Rentberry and Biddwell. In addition to allowing tenants to bid on what they’d be willing to pay for a market-rate rental and how long they’d be willing to stay, Rentberry also provides other interfaces allowing landlords and tenants to interact and conduct business. For that reason, Rentberry joined with landlord rights advocates Pacific Legal Foundation to bring a lawsuit challenging the ban.

In the complaint, PLF challenges the basis for the moratorium — that the bidding process could drive up prices and violate the city’s rental code. At the time the website ban was adopted, Seattle’s rental code included a “first-in-time” rule that required landlords to list the rental price along with minimum qualifications and to offer the unit to the first qualified applicant. However, the first-in-time law has since been declared unconstitutional.

Attorneys for PLF argue that the city has presented no evidence that the use of the specific websites would cause any harm, and that the preemptive banning of the websites violates landlords’ free speech rights.

While the city perceives that rent-bidding will force rents up, lawyers for the PLF argue that the bidding process is a more efficient and transparent way to arrive at market rent given that the figure a landlord unilaterally determines could be too low or too high, depending on tenant demand at that time.

Landlords who violate the ban could pay a $500 fine for the first violation and a $1,000 fine for each subsequent violation within a five-year period. The moratorium currently is scheduled to remain in effect for one year, until April 2019.

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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