REALTOR® Wins on the Hill: Leaseback Clarification (SHB 1070)
This post is the first of a series of reports on the important legislative wins for REALTORS® from the 2023 Washington State congressional session.
When a house is sold, sometimes the seller is not yet ready to move out, or the buyer is not able to move in right away. In this situation, the buyer and seller may agree to a written “leaseback” as part of the sale so that the seller stays in the house after closing for an agreed-upon length of time. This is not a typical landlord-tenant type situation, so this bill clarifies that a home sale leaseback agreement is exempt from the state’s landlord-tenant act.
This bill also includes some clear limitations on a leaseback:
- The term limit for the leaseback agreement is only three months after closing. Anything longer will be subject to landlord-tenant laws.
- Buyer cannot accept any payment after three months of closing or will be subject to landlord-tenant laws.
- Leaseback agreements on distressed sales are not exempt from landlord-tenant laws.
- The leaseback agreement must be negotiated by a licensed attorney or licensed real estate broker.
Clear guidelines and transaction transparency in seller-buyer agreements like leasebacks can only benefit sellers, buyers, and REALTORS®. Clarifying leaseback provisions in state law was a 2023 legislative priority of your Washington REALTORS®. Find out more about the details of this legislation from Annie Fitzsimmons, the WR Legal Hotline lawyer.
SHB 1070 was signed into law on April 6, 2023, and will come into effect on July 23, 2023.
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