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In many cases, the legal burden of a tenant dispute can fall on the property owner or manager. Today we are speaking with Enrique Jevons, Regional Director with Mynd for the Pacific Northwest. Enrique is here to discuss one such scenario and how failing to keep up-to-date on changing laws can ultimately cost both time and money.
Steve Rozenberg: Hey, everyone. My name is Steve Rozenberg with Mynd Property Management and I'm joined today by my good friend, Enrique Jevons, who is the Regional Director for Mynd Property Management Seattle, WA. Today we want to talk about this pretty new law and something that's pretty serious that you need to know about. Enrique, first of all, thank you so much for joining me today. I really appreciate having you on.
Enrique Jevons: Yeah, thank you. It's great to see you again, Steve.
Steve Rozenberg: So what I want to know today is a new law change where, if I'm an investor and I want to evict in the state of Washington for non-payment of, let's say, late fees pet fees or any other fees that's not rent, am I allowed to do that still?
Enrique Jevons: So that is the crazy thing is that, in the state of Washington, it is no longer permissible to evict for anything other than rent, essentially. And so, when I first heard about this, when the law was just first being proposed, I thought, “that is crazy.” What if they rack up thousands of dollars in late fees or unpaid utility bills or other stuff, what's going to happen?
Yeah, they made this a statewide law. So that's another reason why you’ve got to really make sure you're just up on the law for wherever your properties located, not just the state law, but make sure you're up on all the city ordinances or HOA rules condo rules, because there are all sorts of laws that are applicable to rental properties and they're only becoming more restrictive over time.
There is no single repository where you can just go to this one website and it's going to magically tell you every lots of applicable to your property. So it does take a bit of just making sure you're staying in touch with all the new ordinances in laws that that happen and federal laws—I should mention that, as well—that you have to abide by.
So now, in the state of Washington, let's say somebody does rack up late fees. You can no longer evict them. You can still collect that money, though. And that is something that a lot of landlords in the state of Washington haven't quite grasped the concept yet. You still may collect that money. The thing of it is that you're going to have to ultimately collect in small claims court.
It's part of your lease so you should a ten-day-to-comply notice for not complying with the lease for not paying the late fees, right? And then, after that 10 days, then what you can do is file in small claims court, get a judgment, pass that on to a collections agency. And you can try and garnish yourself. It's a very difficult process. My recommendation is always use a collection agency so that they can then take that judgment and garnish an individual’s wages so that you can still have a means of being able to collect that money. It just means that you can no longer evict for that purpose if they're paying rent and they're just not paying…
Steven Rozenberg: So now, let me ask you this. And something that we do in the state of Texas, which is maybe different is, if they owe money in late fees, rent: that is always paid first. So all late fees and everything are paid first what ends up being delinquent is rent. Is that not allowed now? is that something that you cannot do?Enrique Jevons: Used to be allowed up until this last year when the new law came into effect. It used to be allowed that you could choose how your payments were applied to who the money is owed. W
hat we used to do before was, any money that was paid in was applied to the oldest amount due regardless of what the amount was, whether it was a pet fee, rent, late fee, or maybe a RUBs utility bill, whatever it might be, we would take that payment and apply it to the oldest invoice, right? And it makes the most sense. I mean, that's a generally-accepted accounting practice. But now that has changed such that all monies received must first be applied to rent then may be applied to any other balance due.
Steve Rozenberg: Wow, so to me, that just goes to show for anyone watching here that, number one, the laws are always changing. It is your responsibility as an investor to be up on those laws and if you don't want to take the time to learn them and be up on them, the fines are way outweighing what you're going to get. That's when it may make sense to hire a professional company, talk to someone like Enrique. Get them to get their opinions on what the laws are and how they're changing because, unfortunately, as Enrique and I know, they don't come out with some sort of news circular to let you know the laws have changed.
You don't know they’ve changed until you get notified that you've done something illegal and now you have to defend yourself because we all know ignorance is no excuse for not knowing the law.And so, Enrique if somebody wants to get ahold of you and learn more about these laws and maybe talk to you about managing their properties, how do they do that?
Enrique Jevons: Sure, yeah. Feel free to shoot me any questions. Of course, I’m happy to manage properties. If you're in the state of Washington, I'm the person to contact. But Mynd is certainly in a whole lot of states throughout the country and only continually growing.So, you can reach me at firstname.lastname@example.org.
Steve Rozenberg: Because he's so famous. And we do have a Facebook group here at Mynd. It's called the Mastermynd, M-Y-N-D, the Mastermynd Real Estate Investment Club. Both Enrique and I are both members. We chat, engage, have conversations. Investors from all over the world are actually in this group. We break down deals, do webinars, things exclusive for that group. So please go to Facebook. Join the group. And if you want to know more about Mynd, go to our website mynd.co. I'm Steve Rozenberg. This was Enrique Jevons. I want to thank everyone for watching and we'll see you guys later. Bye-bye.
Enrique Jevons: Thank you. Bye, everybody.
With laws constantly changing, it’s imperative that property owners and managers remain diligent on those laws that affect them and their properties. One such law that recently passed in the state of Washington makes it so that property owners and managers can no longer evict a tenant for nonpayment of fees other than rent. For example, tenants can no longer be evicted for failure to pay pet rent. As such, it is the property owner’s responsibility to seek those payments through the legal system, which will inevitably cost more time and money than it is worth.