[WSBARP] Best practices on whether to record, and form of, Memorandum of Lease?

[Eric Nelsen]

Counselors:

Client is entering into a residential lease of a house for a five-year term. Technically any lease longer than two years must be recorded in order to impart notice to subsequent bona fide purchasers, lenders, etc. RCW 65.08.070<https://app.leg.wa.gov/RCW/default.aspx?cite=65.08&full=true#65.08.070>. But there are decades of case law making clear that a tenant's obvious sole and exclusive possession of the property imparts constructive notice sufficient to protect the tenant's lease rights against a bona fide purchaser even without any recorded notice. Nichols v. De Britz, 178 Wash. 375, 35 P.2d 29 (1934); see also OneWest Bank, FSB v. Erickson, 185 Wn.2d 43, 67, 367 P.3d 1063 (2016) (holding that there is no constructive notice of tenant's right when the tenant is a co-occupant together with the record owner).

So my practice is to advise the client of the statutory requirement and the protective case law, and let them make a decision as to whether or not they want to require recording of a memorandum of lease. Does anyone routinely advise "yes" or "no" instead? For commercial properties I suppose I might lean toward recording a Memorandum in most circumstances, but for residential it seems a bit overkill.

Also, what if the lease is already executed and in effect, and is silent concerning recording. Could the tenant, without cooperation or consent of the landlord, execute and record a "Memorandum of Lease"? I think the answer is "yes," and it would be sufficient to impart notice even if technically defective in some fashion; and it could not be considered slander of title or otherwise wrongful so long as it accurately gives notice concerning the valid lease. And, of course, assuming that the lease terms do not prohibit recording. But am I being too casual about possible risk to the tenant?

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

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