Evictions Settlement Agreement Update: Washington Court of Appeals Decision: Princeton Property Management, Inc. v. Kathleen Allen
Introduction
The recent Washington Court of Appeals decision in Princeton Prop. Mgmt., Inc. v. Allen, No. 58183-3-II, 2024 Wash. App. has brought significant attention to the enforceability of settlement agreements in unlawful detainer actions under the Residential Landlord-Tenant Act (RLTA). The Princeton ruling addresses the critical issue of whether a provision in a settlement agreement that may waive a tenant’s right(s) under the RLTA is enforceable. The ruling has unintentionally created a substantial hurdle for owners and tenants to efficiently resolve disputes. The court held that even if a settlement agreement is entered into with both parties having counsel, any provisions that waive a tenant’s right under the RLTA is not enforceable. The ruling will without a doubt have significant implications for both owners and tenants in Washington state.
Background
Princeton involved an unlawful detainer action based on a three-day notice to quit for waste or nuisance. After an unlawful detainer action was initiated, the parties (both represented by counsel at the time) entered into a settlement agreement. The agreement required the tenants to tender past due rent by a specific date and if they failed to do so, the owner could move for an order with the court to have the tenants removed from the premises. The parties, both represented by counsel, negotiated a resolution that provided for the payment of the unpaid amounts for the resolution of the dispute. After entering into the agreement, the tenants failed to timely pay the outstanding amounts agreed upon and then challenged the enforceability of the settlement agreement that they agreed to.
Court's Ruling on the Anti-waiver Provision
A key aspect of the court's ruling was its conclusion that the settlement agreement violated the anti-waiver provision of the RLTA, specifically RCW 59.18.230(1)(b). Under that subsection, any agreement that waives or modifies the rights, remedies, or obligations of the RLTA is void and unenforceable.
The court stated: "Having concluded that the settlement agreement violates the antiwaiver provision, the result is absolute—the agreement 'is void and unenforceable.' RCW 59.18.230(1)(b)."
Impacts of the Ruling
The ruling has several significant implications for the settlement of unlawful detainer actions in Washington state:
Strict Enforcement of Tenant Protections: The decision mandates that any settlement agreement that attempts to waive or modify tenant protections under the RLTA is automatically void and unenforceable. This underscores a growing resistance to use settlement agreements to efficiently work out a resolution that can benefit all parties involved.
Clarity and Transparency in Agreements: Owners must ensure that settlement agreements do not include provisions that conflict with tenant protections under the RLTA. This requires clear and transparent drafting of agreements to avoid any clauses that could implicitly or explicitly be interpreted as waiving tenant rights. Even if the tenant is represented by counsel in entering into the settlement agreement it still may be found unenforceable.
Judicial Oversight: The ruling highlights the role of the judiciary in scrutinizing settlement agreements to ensure compliance with the RLTA. Courts will closely examine agreements to protect tenants from unlawful waivers of their rights and this may involve court approval of any settlement agreements moving forward, increasing the burden on the courts and the parties to agreed resolutions.
Less Settlements: Owners may be weary of entering into settlement agreements that benefit both sides and find an efficient resolution. This has the unintentional effect of pushing for issues through the court rather than allowing the parties to come to an agreement on their dispute.
Conclusion
The Princeton decision underscores the absolute nature of RCW 59.18.230(1)(b). Settlement agreements that violate this provision are void and unenforceable, reaffirming the statutory protections afforded to tenants. As of July 30, 2024, if there has been no change in case law, this ruling has significant implications for the negotiation and enforcement of settlement agreements in unlawful detainer actions, and will make enforcement of such agreements more time consuming. Property owners must stay informed of their obligations under Washington state law to navigate the complexities of resolving an unlawful detainer action effectively.
As always with articles on our website, this article is for informational purposes only and should not be relied upon for legal advice.