On Tuesday, April 18th, 2023, Seattle City Council held a vote to cap late rent fees in the city. The majority of councilmembers voted to cap late fees at just $10 a month, leaving renters happy and some landlords frustrated.
This legislation was originally sponsored in March by councilmember Kshawma Sawant, but the cap was later raised to $50, or 1.5% of the tenant’s rent, at an April 7 meeting. On Tuesday, Councilmembers Tammy Morales and Teresa Mosequeda raised an amendment to restore the cap to the original $10 limit.
As part of a larger effort to control the rising housing costs in the city, the new bill also limits a variety of other landlord charges such as “junk” fees or fees for certain types of notifications. The main goal of the legislation is to minimize compounding debt for tenants who are already struggling to pay their rent.
“Late fees can suck renters into a debt vortex,” says Sawant. These fees typically accumulate daily or weekly until rent is paid, resulting in hundreds of dollars in late fees in some cases. Sawant points out the double standard exhibited by rapidly accumulating late fees. “Renters do not get paid late fees when their landlords delay fixing broken appliances, heating or mold infestations, yet renters are required by law to pay rent on time.”
The new law mirrors similar legislations seen in Auburn and Burien, two cities also working to increase tenant protections. Preventing exorbinant late fees helps protect renters from facing eviction or homelessness.
In regards to reducing the limit from $50 back to $10, Tammy Morales argues that the difference would have had a larger impact on tenants than landlords or property management companies. According to Molares, capping late fees at just $10 a month is “the bare minimum we can do for renters.”
She also notes that tenants are not late on their rent by choice, so quickly accumulating late fees are often a hinderance rather than an incentive to pay rent on time. “If someone is having trouble paying rent on time, it’s because their housing costs are too high, or they didn’t get enough hours at work last week, or maybe they’ve had a medical emergency. It’s not because they’re trying to pull a fast one on their landlords.”
Councilmember Sara Nelson, who introduced the initial proposal to raise the cap to $50, argues that her proposal was a compromise that considered the perspective of Seattle landlords. “Landlords don’t charge fees to make money because they charge rent to make money,” she said, explaining that late fees are a legitimate tool used to incentivize timely rent payments.
The bill is now heading to Mayor Harrell for approval; the Mayor has yet to give an indication of whether or not he plans to sign the bill.