Are Co-ops Subject to Landlord Tenant Law?

Our firm takes the position that the corporations that own cooperative housing developments are subject to Landlord Tenant Law.[1]  As a result, we believe that individuals managing cooperative housing developments should take the time to become familiar and comply with the duties imposed on landlords.  This position is based on both statute and case law.

First, the Landlord Tenant act includes a section that specifically delineates living arrangements that are exempt from it.[2]  Notably, cooperative housing developments are not included in the list of exemptions.   By not including cooperative housing developments in the list of exemptions, the legislature likely intended to have them subject to Landlord Tenant law.[3]

Two Washington court cases also support the position that cooperative housing developments are subject to Landlord Tenant law.  The first case, Stevens Housing Co-Op I v. Guiffre,[4] was heard before the Washington Court of Appeals.    In it the court held that a co-op could evict a tenant who failed to pay his full rent for more than a year.  Despite receiving several notices that his rent had increased, the tenant failed to pay the increased amount.  Under these circumstances, the court reasoned that the tenant had unlawfully detained the unit and was subject to eviction.

The second case, Firth v. Lu, was heard before the Washington Supreme Court.[5]  In it the court held that an agreement to transfer shares in a housing cooperative was not subject to the real estate statute of frauds.  The court supported this outcome by reasoning that an individual that purchases a cooperative housing unit is only purchasing stock in the cooperative corporation.  Thus, the purchaser obtains no title or any other interest in real property and is “merely [a] tenant of the entity which owns the real property.”  Several other passages in the decision describe occupants as shareholder-tenants.

Both of these cases take for granted the proposition that shareholders of a cooperative housing development are tenants, and that the entity that owns the units is the landlord.  When considered in combination with the exclusions in the Landlord Tenant act, our firm’s position seems to be the most reasonable one.  Thus, individuals managing cooperative housing developments should take the time to become familiar and comply with the duties imposed on landlords.

[1] RCW 59.18.

[2] RCW 59.18.040 (Living arrangements exempted from chapter)

The following living arrangements are not intended to be governed by the provisions of this chapter, unless established primarily to avoid its application, in which event the provisions of this chapter shall control:

(1) Residence at an institution, whether public or private, where residence is merely incidental to detention or the provision of medical, religious, educational, recreational, or similar services, including but not limited to correctional facilities, licensed nursing homes, monasteries and convents, and hospitals;

(2) Occupancy under a bona fide earnest money agreement to purchase or contract of sale of the dwelling unit or the property of which it is a part, where the tenant is, or stands in the place of, the purchaser;

(3) Residence in a hotel, motel, or other transient lodging whose operation is defined in RCW 19.48.010;

(4) Rental agreements entered into pursuant to the provisions of chapter 47.12 RCW where occupancy is by an owner-condemnee and where such agreement does not violate the public policy of this state of ensuring decent, safe, and sanitary housing and is so certified by the consumer protection division of the attorney general’s office;

(5) Rental agreements for the use of any single-family residence which are incidental to leases or rentals entered into in connection with a lease of land to be used primarily for agricultural purposes;

(6) Rental agreements providing housing for seasonal agricultural employees while provided in conjunction with such employment;

(7) Rental agreements with the state of Washington, department of natural resources, on public lands governed by Title 79 RCW;

(8) Occupancy by an employee of a landlord whose right to occupy is conditioned upon employment in or about the premises.

[3] When a statute specifically designates things or classes of things affected by it, an inference arises that everything omitted from the designation was omitted intentionally.  See Ellensburg Cement Prods., Inc. v. Kittitas County, 2014 Wash. LEXIS 73, ¶26; Veit v. Burlington N. Santa Fe Corp., 171 Wn.2d 88, 114 (Wash. 2011).  By the same logic, omissions from a list of exclusions are also likely intentional.

[4] 1998 Wash. App. LEXIS 438.

[5] 146 Wn.2d 608, 610 (Wash. 2002).

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Are Co-ops Subject to Landlord Tenant Law?

Our firm takes the position that the corporations that own cooperative housing developments are subject to Landlord Tenant Law.[1]  As a result, we believe that individuals managing cooperative housing developments should take the time to become familiar and comply with the duties imposed on landlords.  This position is based on both statute and case law.

First, the Landlord Tenant act includes a section that specifically delineates living arrangements that are exempt from it.[2]  Notably, cooperative housing developments are not included in the list of exemptions.   By not including cooperative housing developments in the list of exemptions, the legislature likely intended to have them subject to Landlord Tenant law.[3]

Two Washington court cases also support the position that cooperative housing developments are subject to Landlord Tenant law.  The first case, Stevens Housing Co-Op I v. Guiffre,[4] was heard before the Washington Court of Appeals.    In it the court held that a co-op could evict a tenant who failed to pay his full rent for more than a year.  Despite receiving several notices that his rent had increased, the tenant failed to pay the increased amount.  Under these circumstances, the court reasoned that the tenant had unlawfully detained the unit and was subject to eviction.

The second case, Firth v. Lu, was heard before the Washington Supreme Court.[5]  In it the court held that an agreement to transfer shares in a housing cooperative was not subject to the real estate statute of frauds.  The court supported this outcome by reasoning that an individual that purchases a cooperative housing unit is only purchasing stock in the cooperative corporation.  Thus, the purchaser obtains no title or any other interest in real property and is “merely [a] tenant of the entity which owns the real property.”  Several other passages in the decision describe occupants as shareholder-tenants.

Both of these cases take for granted the proposition that shareholders of a cooperative housing development are tenants, and that the entity that owns the units is the landlord.  When considered in combination with the exclusions in the Landlord Tenant act, our firm’s position seems to be the most reasonable one.  Thus, individuals managing cooperative housing developments should take the time to become familiar and comply with the duties imposed on landlords.

[1] RCW 59.18.

[2] RCW 59.18.040 (Living arrangements exempted from chapter)

The following living arrangements are not intended to be governed by the provisions of this chapter, unless established primarily to avoid its application, in which event the provisions of this chapter shall control:

(1) Residence at an institution, whether public or private, where residence is merely incidental to detention or the provision of medical, religious, educational, recreational, or similar services, including but not limited to correctional facilities, licensed nursing homes, monasteries and convents, and hospitals;

(2) Occupancy under a bona fide earnest money agreement to purchase or contract of sale of the dwelling unit or the property of which it is a part, where the tenant is, or stands in the place of, the purchaser;

(3) Residence in a hotel, motel, or other transient lodging whose operation is defined in RCW 19.48.010;

(4) Rental agreements entered into pursuant to the provisions of chapter 47.12 RCW where occupancy is by an owner-condemnee and where such agreement does not violate the public policy of this state of ensuring decent, safe, and sanitary housing and is so certified by the consumer protection division of the attorney general’s office;

(5) Rental agreements for the use of any single-family residence which are incidental to leases or rentals entered into in connection with a lease of land to be used primarily for agricultural purposes;

(6) Rental agreements providing housing for seasonal agricultural employees while provided in conjunction with such employment;

(7) Rental agreements with the state of Washington, department of natural resources, on public lands governed by Title 79 RCW;

(8) Occupancy by an employee of a landlord whose right to occupy is conditioned upon employment in or about the premises.

[3] When a statute specifically designates things or classes of things affected by it, an inference arises that everything omitted from the designation was omitted intentionally.  See Ellensburg Cement Prods., Inc. v. Kittitas County, 2014 Wash. LEXIS 73, ¶26; Veit v. Burlington N. Santa Fe Corp., 171 Wn.2d 88, 114 (Wash. 2011).  By the same logic, omissions from a list of exclusions are also likely intentional.

[4] 1998 Wash. App. LEXIS 438.

[5] 146 Wn.2d 608, 610 (Wash. 2002).

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