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Recent Appellate Decisions: July 6 to July 12, 2012

Selected summaries prepared by Commissioner James Verellen (ret.)

Division I  Washington State Court of Appeals

July 9, 2012

Indigo Real Estate Services Inc. v. Wadsworth,  No. 67547-8-I

landlord and tenant – unlawful detainer – HUD section 8 rental assistance – “good cause” or “material noncompliance” required for termination of tenancy

The United States Department of Housing and Urban Development’s Section 8 rental assistance program places “good cause” limitations on the termination of the lease.  The landlord may not terminate the tenancy except for: (1) a serious or repeated violation of the terms of the lease; (2) a violation of federal, state or local law imposing obligations on the occupancy or use of the property; or (3) “other good cause.”  HUD regulations also require that Section 8 leases include an addendum with a provision precluding termination of the lease except for “material noncompliance” with the lease.  Material noncompliance is defined as (a) one or more substantial violations of the Lease; or (b) repeated minor violations that disrupt the livability of the project, adversely affect health, safety or quiet enjoyment, interfere with management or have an adverse financial effect on the project.  (Failure to pay rent and engaging in criminal activity also constitute good cause and material noncompliance.)   Washington’s unlawful detainer statute does not include any good cause or material noncompliance requirement.

Wadsworth leased her residence under Section 8.  The addendum to Wadsworth’s lease provided the landlord shall not terminate except for material noncompliance with the lease.   Wadsworth had a sheet of plywood along the inside of her balcony railing.  A community rule required that balconies and patios be kept neat and clean at all times. Wadsworth received a 10-day notice to comply or vacate based on the presence of the plywood on her balcony deck.   Wadsworth cleaned the deck, covered it with a sheet of plastic, and offered explanations for the presence of the plywood.  The landlord refused to exempt the plywood from the 10-day notice.  Wadsworth removed the plywood 14 days after receiving the 10-day notice.  The landlord served a complaint for unlawful detainer seeking a writ of restitution and forfeiture of the tenancy based on Wadsworth’s failure to comply with the 10-day notice.

The trial court concluded that Wadsworth’s admitted failure to remove the plywood until four days after the 10-day notice period compelled the issuance of a writ of restitution and termination of the lease.  The trial court ruled that despite the “material noncompliance” requirement in the lease addendum, RCW 59.12 controls and allows the eviction of Wadsworth.

Division I reversed the trial court and remanded for a trial to determine material noncompliance:

  • “[W]here a landlord has accepted the substantial financial benefits of the federal Section 8 program, the landlord must abide by the rules of that program in any unlawful detainer action.”
  • “[W]here a landlord has not demonstrated material noncompliance with the lease, it cannot be said that a section 8 tenant has unlawfully detained the property at all.”
  • “[T]he protections provided by the lease addendum and by federal law are properly considered as limitations to our state’s unlawful detainer statute.”
  • The question of material noncompliance is inappropriate for summary resolution; “the [trial] court was required to determine whether Wadsworth’s four-day delay in removing the plywood panel – the sole basis found by the court to justify her eviction – was either a ‘substantial violation’ or a ‘repeated minor violation’ of the lease.”
  • A material noncompliance hearing is required on remand.

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