[WSBARP] Residential Lease: Liquidated Damages Question

Wed May 6 12:57:58 PDT 2020

That's a really good point, Kathleen!

Kaitlyn

On Wed, May 6, 2020 at 12:54 PM Kathleen Hopkins <khopkins at rp-lawgroup.com>
wrote:

> Considering how deviations in tenant protections under from RLLTA must be
> approved by a lawyer (or the prosecutor’s office), if I were landlord’s
> counsel, since this is a residential lease I would require the tenant have
> her owner counsel and have the tenant specifically sign/initial the clause
> confirming the requirement to pay the unamortized balance (and use all the
> magic language about liquidated damages) and the independent counsel sign
> the lease as “approved as to form.”
>
>
>
>
>
>
>
> *Kathleen J. Hopkins *
>
> Real Property Law Group, PLLC
>
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>
> Seattle, WA 98101
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> *From:* wsbarp-bounces at lists.wsbarppt.com <
> wsbarp-bounces at lists.wsbarppt.com> *On Behalf Of *Laird, Katherine
> *Sent:* Wednesday, May 6, 2020 12:06 PM
> *To:* WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> *Subject:* Re: [WSBARP] Residential Lease: Liquidated Damages Question
>
>
>
> It would not be uncommon in a commercial setting to amortise the
> improvements over a shorter term.  The LL gets back back faster, thereby
> reducing the risk of loss from a default later in the lease term.  The new
> flooring is a material term and consideration for the term and you should
> state that somewhere.
>
> Good luck,
>
> Katherine
>
>
>
> Sent from Workspace ONE Boxer
>
>
>
> On May 6, 2020 11:13 AM, nestor at pplsweb.com wrote:
>
> *[EXTERNAL]*
> ------------------------------
>
> How about increasing the total “rent” for the value of the flooring as
> agreed and include in the monthly rent over 10 years and then giving a
> monthly rebate for the amount to be forgiven.
>
>
>
>
>
> Nestor Gorfinkel, Attorney at Law
>
> Licensed in Washington & Florida
>
> Florida Civil-Law (International) Notary
>
>
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> *From:* wsbarp-bounces at lists.wsbarppt.com <
> wsbarp-bounces at lists.wsbarppt.com> *On Behalf Of *Kary Krismer
> *Sent:* Wednesday, May 6, 2020 9:12 AM
> *To:* wsbarp at lists.wsbarppt.com
> *Subject:* Re: [WSBARP] Residential Lease: Liquidated Damages Question
>
>
>
> I'm not seeing that breaking the lease early would result in "damages"
> related to the new flooring in that presumably the house is worth more with
> the new flooring than without.  Conversely, I'm also not seeing that the
> schedule you propose deals with the actual harm possibly caused if the
> breach is late in the term.  Assuming we're not talking about carpet, the
> floors should still be in good condition in 10 years, but what if it's been
> so damaged it needs to be replaced?  Would this system prevent any recovery
> for the landlord if the lease went to term and the tenant destroyed the
> floors?
>
> Also, I'm having some "this is so bizarre it must be wrong" alarms going
> off.  Seems like a really bad idea from both sides.  First, I'd be very
> skeptical of any tenant willing to enter into such a contract.  Second,
> assuming the property is encumbered, would the landlord face liability to
> the tenant in the event of foreclosure?  Third, if there were a breach
> would the landlord be able to actually recover for the breach.  Stated
> differently, are they actually getting anything non-illusory for tying up
> their property for 10 years?  Fourth, if this property is in Seattle are
> they aware that in 2026 new legislation will provide that landlords will be
> tarred and feathered each time they collect rent?
>
> Kary L. Krismer
>
> 206 723-2148
>
> On 5/6/2020 8:46 AM, Gabriel Dietz wrote:
>
> Good Morning Fellow List Mates:
>
>
>
> I have a potential client, a landlord who is considering a 10-year
> residential lease in Seattle. Before the lease begins, landlord and tenant
> want to install new floors throughout the premises. Landlord proposes to
> pay for the costs of the floor installation. Tenant, in theory, would agree
> to a liquidated damages clause where tenant reimburses landlord for some of
> the costs of the floor install in the event that the tenant breaks the
> lease early. The amount of damages would be a straight-line amortization
> over the life of the lease. For example, if tenant breaks the lease in
> month 1, tenant would be responsible for 50% of damages. If tenant breaks
> the lease in month 120, tenant would not be responsible at all. Other than
> the typical limitations on liquidated damages under Washington law, is
> there anything in the Washington Residential Landlord-Tenant Act or
> otherwise that would prohibit/limit this structure?
>
>
>
> Thank you in advance,
>
> Gabe
>
>
>
> Gabriel A. Dietz Partner (206) 451-3859
>
> gabe at hdpnw.com
>
> www.hdpnw.com
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Thank you,

Kaitlyn R. Jackson | Attorney| DIMENSION LAW GROUP PLLC
130 Andover Park East, Suite 300 | Tukwila, WA 98188
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