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ESB 6413: SHIFTING THE DYNAMICS IN EVICTION COURT

Eric Dunn, Staff AttorneyNorthwest Justice Project

401 Second Ave. S., Ste. 407Seattle, Washington 98104

Tel. (206) 464-1519EricD@nwjustice.org

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• Establishes “comprehensive reusable tenant-screening report”– LLs must disclose whether CRTSRs are accepted– LL that accepts CRTSR cannot charge screening fee

• Creates “order for limited dissemination” – Applies to unlawful detainer (eviction) case records– Tenant-screening companies cannot report if OLD

entered

• Increases deadline for returning security deposits (boo)– (Or explaining basis for withholding)– From 14 days to 21 days

ESB 6413 OF 2016: OVERVIEW

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PART 1

Orders for Limited Dissemination (of unlawful detainer records)

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“’It is the policy of 99 percent of our customers in New York to flat out reject anybody with a landlord-tenant record, no matter what the reason is and no matter what the outcome is, because if their dispute has escalated to going to court, an owner will view them as a pain,’ said Jake Harrington, founder of On-Site.com.”

--New York Times, Nov. 26, 2006

EVICTION RECORDS

• Electronic records of eviction case filings– Data entered by court clerk when case is filed– Publicly-accessible and searchable by name

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• Applicants who have been sued for eviction can’t get housing

• Tenants who have been served with eviction notices move out to avoid having a case filed

• Tenants who fear reprisals avoid taking actions they LLs may not appreciate

CATEGORICAL DENIALS: RIPPLE EFFECTS

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State v. Schwab, 103 Wn.2d 542, 693 P.2d 108 (1985)

– Washington Attorney General had brought proceedings to enforce state Consumer Protection Act (RCW 19.86) against a residential landlord

– Court held that residential LL-T transactions lie within the exclusive purview of the RLTA, Consumer Protection Act does not apply

• Hence, substantial enforcement of RLTA is only possible through private litigation

NO STATE AGENCY ENFORCES THE RESIDENTIAL LANDLORD-TENANT ACT (RLTA)

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“…the landlord shall not take or threaten to take reprisals or retaliatory action against the tenant because of any good faith and lawful: (1) Complaints or reports by the tenant to a governmental authority concerning the failure of the landlord to substantially comply with any code, statute, ordinance, or regulation governing the maintenance or operation of the premises, if such condition may endanger or impair the health or safety of the tenant; or(2) Assertions or enforcement by the tenant of his or her rights and remedies under this chapter.”

RCW 59.18.240

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• “Sealing” a court record removes the record from public view– No member of the public

can view the record unless and until the record is unsealed by court order

• Redaction: seals part of a record

REDACTION & SEALING OF COURT RECORDS

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• Theoretically authorized under Wash. court rule GR 15(c)– Indigo Real Estate v. Rousey, 151 Wn.App. 941, 215 P.3d 977 (2009)– Court may redact or seal court record if it finds identified

compelling privacy or safety interests that outweigh public interest in access Sealing or redaction must be temporary & narrowly-tailored

– Reconciles tension between Art. I, Sec. 7 and 10 of state constitution

• Practically impossible to meet requirements– Hundtofte v. Encarnacion, 181 Wn.2d 1, 330 P.3d 168 (2014) (by 4-

4-1 vote, held that trial judge abused discretion by redacting names of tenants who “were sued for unlawful detainer even though they had a valid lease and did nothing to warrant eviction,” and who had already been denied admission to one property because of the record)

– May be exception for DV survivors under Rousey

REDACTION & SEALING – GR 15(C)

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Footnote 2 to Justice Owens’ plurality opinion:

“Despite our conclusions in this case, we recognize the problems innocent renters face when they are named as defendants to unlawful detainer actions. We note that petitioners and amici could seek a statutory remedy for similarly situated renters.”

THE SILVER LINING FROM ENCARNACION

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• “The legislature finds that residential landlords frequently use tenant screening reports in evaluating and selecting tenants for their rental properties.” – Laws of 2012, Ch. 41, § 1

• “An estimated four out of five landlords employ background

checks to screen out prospective tenants with criminal records. Many landlords utilize credit checks as well.”

– Vallas, Rebecca and Sharon Dietrich, One Strike and You’re Out: How We Can Eliminate Barriers to Economic Security and Mobility for People with Criminal Records (Dec. 2014)

MOST TENANT-SCREENING DONE THROUGH THIRD-PARTY BACKGROUND CHECKS

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Credit Information

ID Verification

Employment Verification

Terrorist Database

SearchPublic Records

Disclaimer

Miscellaneous Disclaimers

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Reference Check

Criminal History

Sex Offender Check

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Eviction History

Collection Accounts & Civil

Judgments

Recommendations

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• All information available from SCOMISo SCOMIS: Superior Court Management

Information System

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A system for performing rapid tenant screening and lease recommendation… includes determining a value for each of said plurality of acceptance criteria [and] a score for each of said plurality of acceptance criteria based on said value [and] combining said scores into one composite score for a tenant by taking a weighted average of scores for said plurality of acceptance criteria according to the expression:y = ∑i = n yi[2 Π2 + (yi-7)2]∑i = n[2 Π2 + (yi-7)2] wherein i represents an index of said plurality of acceptance criteria, pi represents an importance rating for each acceptance criteria, yi represents a score for each acceptance criteria, and y represents said composite score; and determining said recommendation based on said composite score.

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• Three typical outcomes:– Admission– Admission with conditions

• Cosigner• Increased security

deposit– Denial

• Most housing providers routinely defer to screening company’s recommendation– Some receive only the

recommendation, not the underlying data

ADMISSION DECISIONS

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SCORE/RECOMMENDATION ONLY

Rental reports include detailed credit, criminal and civil records, but there's no raw data for your team to decipher. You get a simple thumbs up, thumbs down recommendation and rental score with scoring breakdown highlighting any areas where applicants may fall short.

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• Court enters “order for limited dissemination” of the unlawful detainer case record as to one or more persons– Tenant-screening company may not disclose existence of

unlawful detainer case on report pertaining to tenant– Cannot use the case in scoring or making recommendation

ORDER FOR LIMITED DISSEMINATION

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• Order for limited dissemination: must be entered by court– Order is entered in docket of unlawful detainer

action– No restrictions on when court can enter the order

• Judge or commissioner• Show cause hearing• Separate motion• Stipulation/agreed order

• Local courts could adopt their own procedures• Order for limited dissemination must be in writing

ORDERS FOR LIMITED DISSEMINATION: MECHANICS (1)

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Order for limited dissemination may be entered on showing of “good cause:”

– Much lower standard that GR 15(c)– Tenant automatically has good cause if:– Tenant wins:

• “plaintiff’s case is found sufficiently without basis in law or fact;” or

– Tenancy reinstated• RCW 59.18.410: tenant, during term

lease, pays non-payment of rent judgment within 5 days

• RCW 59.18.190: equitable ground within 30 days

ORDERS FOR LIMITED DISSEMINATION: MECHANICS (2)

LIMITED DISSEMINATION: MECHANICS (3)

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• Limits dissemination as to one or more persons– If multiple defendants, order may or may not include all of

them– Exclusion of culpable actor may help persuade court to enter

• Prohibits disclosure in tenant-screening reports only– “’ Tenant screening report’ means a consumer report as

defined in RCW 19.182.010 and any other information collected by a tenant screening service.” RCW 59.18.030(27)

– Consumer report: communication bearing on a person’s “credit capacity, character, general reputation, personal characteristics, or mode of living” that is collected or used in determining terms or eligibility for credit or other personal, family, or household or transactions.” RCW 19.182.010(4).

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An order for limited dissemination:

– Does not remove record from public view

– Tenant probably needs to take proactive steps to make sure screening companies know of OLD

– Legal remedy for violations is unclear

LIMITATIONS

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• Tenant can send a copy of the order to a screening company before he or she applies to a property which uses that company for screening– RCW 59.18.257(1)(a) gives applicants

the right to find out which screening company a LL uses before applying there

• Tenant can send copies to all the major tenant-screening companies

• Tenant can give screening companies “constructive” notice of the OLD by filing docket entry with descriptive title

NOTIFYING TENANT-SCREENERS OF ORDERS FOR LIMITED DISSEMINATION

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“Prior to obtaining any information about a prospective tenant, the prospective landlord shall first notify the prospective tenant in writing, or by posting, of the following: …(iii) If a consumer report is used, the name and address of the consumer reporting agency…”

RCW 59.18.257(1)(A)

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• On-Site Manger, Inc.• Moco, Inc. • RealPage• Orca Information, Inc.• ACRANET (Airfactz)

MAJOR TENANT-SCREENERS ACTIVE IN WASHINGTON

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GIVING CONSTRUCTIVE NOTICE VIA COURT DATABASES

Hyperlink to docket entries

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• ESB 6413 provision does not provide a remedy for violations, but…

“Where appropriate, a cause of action may be implied from a statutory provision when the legislature creates a right or obligation without a corresponding remedy.”

Ducote v. DSHS, 167 Wn.2d 697, 222 P.3d 785 (2009)

ENFORCEMENT

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Screening company was not notified of OLD: Injunctive relief (designed to rectify violations) Contempt (coercive)

Screening company had constructive knowledge of OLD:

Damages (caused by violation) Contempt (remedial)

Screening company had actual knowledge of OLD:

Consumer Protection Act or FCRA liability Contempt (sanctions)

LOGICAL JUDICIALLY-IMPLIED REMEDIES

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• Old cases:– Tenants can file motions for OLDs on cases < 7 years old

• Dismissed cases especially • FCRA prohibits reporting of suits beyond 7 years, RCW

19.182.040(1)(b)– Lawyers should consider notifying former clients of the option

• New cases:– Tenants who may be sued for UD should be advised of remedy– Limited dissemination clause should appear in proposed orders

to dismiss– Agreement to OLD becomes a bargaining chip in negotiations

HOW LAWYERS CAN USE THE NEW LAW TO HELP TENANTS (OR, POTENTIALLY, HOW PRO SE TENANTS CAN HELP THEMSELVES)

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PART 2Comprehensive reusable screening reports

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PORTABLE TENANT-SCREENING REPORTS

• Consumer purchases report• On self

• Screening company generates report • Report uploaded to secure website• Accessible (by password) for 30

days • Consumer applies for housing

• Landlords can view the report for free using the password from the applicant

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• Defines “comprehensive reusable tenant screening report”– Credit report, criminal history,

eviction history, employment verification, applicant’s address & rental history

– No more than 30 days old– Screening company provides

directly to LL (at applicant’s direction)

• Requires landlords to disclose whether CRTSRs accepted– Pre-application disclosures– On landlord’s website (if it has

one)– If landlords accepts CRTSRs, may

not charge for separate report

ESB 6413:

C-O-M-P-R-E-H-E-N-S……..

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PART 3Changes to Security Deposit Requirements

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CURRENT SECURITY DEPOSIT LAW

RCW 59.18.280:– Landlord must give “full and specific statement of the basis for

retaining any of the [security] deposit” – Statement due “within fourteen days after the termination of

the rental agreement and vacation of the premises”• Exception for “circumstances beyond the landlord’s control”

– If landlord fails to give timely statement:• Landlord liable for return of full deposit, twice deposit if willful • Landlord counterclaims barred if tenant sues to recover deposit

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Goodeill v. Madison, 191 Wn. App. 88, 362 P.3d 302 (2015)

– Estimate of charges is not a “full and specific statement”

– Landlord claiming “circumstances beyond landlord’s control” must account for all active and passive delays

GOODEILL V. MADISON

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• Deadline for refund or statement of grounds for withholding deposit will increase by one week– New deadline: 21 days– Takes effect June 9, 2016;

no apparent basis for retroactivity

• Goodeill v. Madison not otherwise affected:– LL still cannot rely on just

an estimate of damages– LL must still account for

any delays to claim circumstances beyond control

SECURITY DEPOSIT REFUNDS: CHANGE IN ESB 6413