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Originally published Saturday, February 10, 2007 at 12:00 AM

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Landlord can require you to get insurance

Q: My apartment complex gave me short notice that my rent is being increased and I have to have renter's insurance, which costs a lump sum...

Seattle Times staff reporter

Q: My apartment complex gave me short notice that my rent is being increased and I have to have renter's insurance, which costs a lump sum to get started. I requested an extra month to get this insurance, but management said no. Now it's telling me it won't renew my lease, which expires at the end of the month, if I don't have insurance. Is this legal?

A: Once your lease is up, the law allows your landlord to increase your rent and change the rules of occupancy — as long as the landlord gives you 30 days' notice. Requiring you to have renter's insurance would constitute such a rule change, said Seattle attorney Michelle Geri Farris, so the landlord can certainly make that requirement.

Furthermore, the law gives landlords the right to evict tenants who refuse to comply with rules — in your case meaning that if you don't get renter's insurance your landlord can ask you to go.

"A lease is a contract, and like most contracts both parties have the right to not continue it, based on what the contract says," Farris explained.

Finally, is your landlord being unfair in requiring this insurance? Not really because it's for your benefit. If there's a fire in your building — and there have been a rash of apartment fires lately — you can be homeless in an instant. A good renter's policy will pay to put you up in temporary lodgings. Your landlord has no obligation to do that. It will also pay to replace your belongings, something else the landlord has no obligation to do. Indeed the landlord's policy covers the building, not the tenants' possessions, so to safeguard yours you need your own insurance.

Q: I'm sure there are a lot of homeowners fed up with their homeowners associations. I don't see the need for lawyers and hundreds of pages of dos and don'ts. I see no law that says we have to have a homeowners association. Can we get rid of ours and make up our own rules?

A: You're only partially correct that no state statutes require you to have a homeowners association. Certainly owners of single-family homes aren't required by law to have an association as most homes aren't part of planned communities. That's where you're most likely to have association governance.

However "a condo setup cannot exist without an association because it's in the state statutes," said Seattle attorney Michael Brandt, of Brandt Law Group. Otherwise there would be no mechanism to bring owners together, no way to have the legally binding decision making necessary to keep their common investment functioning.

The law allows for a condominium to dissolve itself, disbanding its homeowners association. That takes an 80 percent "yes" vote (or more, if the condo's governing documents require it). But dissolution usually would occur only when a condo was being converted to some other use, Brandt said.

Likewise, associations comprised of neighborhood homes can vote to disband their association. It takes a two-thirds "yes" vote to do so.

Finally, Brandt points out that if you quash your association and make your own rules, you're back where you started from because you'll need to form an association to make it work.

Q: I'd like to buy half of my partner's condo in such a way that she would avoid having to pay seller's excise tax.

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Is there a way we could simply draw up a contract that would allow me to be a 50 percent owner if I have my own separate mortgage?

A: Your plan is fraught with problems, the first being that you won't be able to get your own mortgage if you're not on the home's title, explained Seattle attorney Lisa Schuchman.

Simply drawing up a contract between you and your partner won't do it.

The only way to avoid having to pay the tax is to qualify for an exemption.

One is if a married partner is transferring an interest in the home to their spouse. Another is for the owner to give the other person an interest in the home as a gift. In that case no money can change hands, Schuchman said.

But unless the owner is really confident the relationship will last, giving away half a home is a sizable risk in return for bypassing a tax bill.

Excise tax is 1.78 percent in most counties, including King, and the money goes for roads and other civic amenities.

Home Forum answers readers' real-estate questions. Send questions to Home Forum, Seattle Times, P.O. Box 1845, Seattle, WA 98111, or call 206-464-8510 to leave a question on a recorded line. The e-mail address is erhodes@seattletimes.com. Sorry, no personal replies. More columns at www.seattletimes.com/columnists.

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