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Seattle City Council passes commercial rent control
The Seattle City Council has unanimously passed legislation to freeze storefront rent increases for some small businesses and nonprofits and allow some small businesses and nonprofits the ability to negotiate a payment plan for their rents with their commercial landlords. The legislation enacts a moratorium on commercial property rent increases for small businesses and nonprofits while the City’s civil emergency is in effect.
The legislation also requires commercial property landlords to negotiate payment plans for overdue rent for small businesses and nonprofit tenants financially affected by the COVID-19 crisis.
The new law applies to nonprofits, and to small businesses with 50 or fewer employees that have been closed due to public orders from the Mayor or the Governor or with gross receipts of at least a 30 percent drop in business from the prior month in 2020 or the same month in 2019. The legislation also applied to franchisees with five or fewer franchise units.
If a business is in the middle of their lease or on a month-to-month basis, the property owner is banned from a rent increase unless it appears in writing in a previously agreed upon lease. If lease comes to an end while the civil emergency is in effect, the landlord cannot renew the lease at a higher rate, or enter into a new lease with higher rental payments than the previously expired lease.
Landlords will be required to work out payment plans with their small business and nonprofit tenants up to six months after the end of the civil emergency. However, the repayment plans would need to meet the following conditions:
- The repayment schedule could not require the small business or nonprofit to pay more than 1/3 of late rent within any month or period,
- The repayment schedule must require that all late rent will be repaid within a year of the end of the civil emergency, and
- No late fees, interest or other charges could be added to the late rent payments.
To see the full text of the legislation, click here.