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Temporary Restrictions on Evictions and Foreclosures in Seattle

The spread of the Novel Coronavirus (COVID-19), and the government imposed and suggested restrictions and guidance to attempt to slow that spread, have resulted in significant impacts to the economy as a whole and to individuals and small businesses throughout the United States. The City of Seattle, the State of Washington and the federal government have recently taken steps to try to protect individuals and small businesses who may be financially impacted by business closures and loss of work. This alert provides an overview of some of the protections currently available for individuals and small businesses in Seattle.

Residential Evictions

On March 16, 2020, the Seattle City Council passed a civil emergency order, creating a moratorium on residential evictions. This moratorium went into effect immediately and will be in place until the City’s declaration of a civil emergency is terminated, or until May 15, 2020, whichever is earlier. This moratorium prohibits any residential landlords from initiating an unlawful detainer action, issuing a notice of lease termination, or otherwise acting on any termination notice during this period unless the lease termination is due to actions by the tenant which constitute an imminent threat to the health or safety of others. In addition, the landlord cannot charge late fees during this time.

On March 18, 2020, Washington Governor Jay Inslee issued a proclamation prohibiting residential evictions until April 17, 2020. Before April 17, 2020, residential landlords in Washington are prohibited from (1) serving a notice of unlawful detainer for default on the payment of rent, (2) issuing a 20-day notice for unlawful detainer unless the landlord attaches an affidavit attesting that the action is necessary to ensure the health and safety of the tenant or other individuals, and (3) initiating judicial action seeking a writ of restitution if the basis for the writ is the failure to pay rent. Pursuant to this proclamation, Washington law enforcement is prohibited from now until April 17, 2020, from serving or acting on eviction orders that are solely based on the failure to pay rent.

In response to Governor Inslee’s proclamation on March 18, 2020, the King County Sheriff’s Office stated it will generally not be enforcing eviction orders in King County.  If the eviction orders are based on waste, nuisance or commission of a crime, however, the King County Sheriff’s Office will review those cases on an individual basis to determine whether it will proceed with the eviction. It appears that the King County Sheriff’s Office is currently treating residential and commercial evictions the same.

Commercial Evictions

The City of Seattle has also acted to prevent commercial evictions during this pandemic. On March 17, 2020, Seattle Mayor Jenny Durkan signed a civil emergency order prohibiting evictions of small business and nonprofit tenants for non-payment of rent or due to the expiration of the lease’s term. This prohibition, which went into effect immediately, will last until the termination of the City’s declaration of a civil emergency is terminated, or May 16, 2020, whichever is earlier.

Small businesses are identified in the order 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.”

In addition to the prohibition on terminating a lease during its effective period, the emergency order also states that an owner of property shall “endeavor to enter into a payment plan, or other workout agreement to assist a distressed small business or nonprofit in rent relief, including but not limited to the deferred payment of rent, discount to rent, or other strategies to address the economic disruption caused by the COVID-19 civil emergency.” The order also prohibits a landlord from charging late fees, interest, or other charges because of late payments during the moratorium.

It appears that this emergency order has not yet been presented to the City Council, which will have the right to modify, reject or approve it. However, until the City Council acts, the emergency order is in effect. Given the Council’s recent actions, it is unlikely that this emergency order will be rejected.

Mortgage Foreclosures

In addition to the local eviction protections, the United States government has also acted to prevent foreclosures and evictions for single family homeowners who may not be able to pay their mortgages because of the coronavirus pandemic.

On March 18, 2020, the U.S. Department of Housing and Urban Development (“HUD”) authorized the Federal Housing Administration (the “FHA”) to implement an immediate foreclosure and eviction moratorium for single-family homeowners with FHA-insured mortgages for the next 60 days (until May 17, 2020). The guidance issued by HUD directs mortgage servicers to halt all new foreclosure actions and suspend all foreclosure actions currently in process where the mortgage is FHA-insured, and to cease all evictions of persons from FHA-insured single-family properties.

Finally, on March 18, 2020, the Federal Housing Finance Agency announced that it is directing Fannie Mae and Freddie Mac to suspend foreclosures and evictions until at least May 17, 2020. This guidance applies to homeowners whose single-family mortgage is backed by either Fannie Mae or Freddie Mac.

If the attorneys of Karr Tuttle Campbell can be of assistance to you or your business in addressing the impacts of the COVID-19 civil emergency, please contact us.

This Client Alert was prepared by Jacque St. Romain. Please feel free to contact her with any questions.