April 20, 2020
City of Seattle Imposes Restrictions on Commercial Rental Properties
The new restrictions apply to small business and nonprofit tenants impacted by COVID-19.
The City of Seattle passed an ordinance limiting the ability of landlords to raise rent, requiring landlords to enter into payment plans for overdue rent, and prohibiting charging late fees and interest during the COVID-19 state of emergency. The restrictions apply to small business and nonprofit tenants impacted by COVID-19. The ordinance is available here.
SUMMARY OF THE ORDINANCE
Restrictions Apply Only to Small Businesses and Nonprofits.
The ordinance is limited to small business and nonprofit tenants (referred to in this memo as “qualified tenants”). A “small business” means any type of business entity (e.g., corporation, partnership, sole proprietorship, etc.) that meets all of the following requirements:
- Owned and operated independently from all other businesses (including a franchisee with five or fewer franchise units);
- 50 or fewer employees per establishment or premises;
- Either (a) has been forced to close due to an emergency order by Governor Inslee or Mayor Durkan; or (b) has gross receipts in the prior month of 2020 that are less 70 percent for the same month in 2019; and
- Is neither (a) a general sales and service business with 10 or more establishments worldwide; nor (b) an entertainment use business with 5 or more establishments worldwide.
A “nonprofit” means any entity that is a nonprofit corporation or public benefit nonprofit corporation under Washington law and holds 501(c)(3) tax-exempt status.