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Real Property & Development Review

Washington Supreme Court Rejects Argument that Reduction in Lease Term Upon Assignment Violates Manufactured/Mobile Home Landlord-Tenant Act

Posted in Real Estate

In a 5-4 decision, the Washington Supreme Court held that a 25-year lease subject to the Manufactured/Mobile Home Landlord-Tenant Act (MHLTA), RCW 59.20, does not violate the MHLTA’s prohibition against restrictions on assignment, RCW 59.20.060(2)(d), .073(1), if the lease provides that the lease term is shortened to one or two years in the event of assignment. The lease did not otherwise limit a tenant’s right to assign. The owner had offered 25-year leases to initial tenants at a low rental to obtain full occupancy of a new development. Although the development was not viable if all owners held their leases for the full 25-year term, the owner calculated that most owners would assign their leases before the 25-year term expired. The Court did not address the tenants’ alternative argument that such leases violated the Consumer Protection Act, RCW 19.86, as the Court of Appeals had remanded the CPA claim for further factual findings. The majority and dissenting opinions in case, Little Mountain Estates Tenants Ass’n v. Little Mountain Estates MHC LLC, Case No. 82574-2, can be found here: [www.dwtrealestatelawnw.com/uploads/file/Little Mountain Dissent.pdf ; and www.dwtrealestatelawnw.com/uploads/file/Little Mountain Majority.pdf]