In a recent ruling, the Washington Court of Appeals reversed a trial court's decision that awarded attorney fees to a landlord in an unlawful detainer case. This decision affects the ongoing legal landscape for landlords and tenants in Washington state, particularly regarding the enforceability of attorney fee clauses in rental agreements. The case, Forest Creek Apartments, LLC v. Suegi Finch, No. 41185-1-III, highlights the complexities surrounding tenant rights and landlord obligations under state law.
The dispute began when Forest Creek Apartments, LLC filed an unlawful detainer action against its tenant Suegi Finch in February 2025. The landlord claimed Finch failed to pay rent, leading to their request for possession of the rental unit. Before a scheduled show cause hearing, Finch made a payment of $6,850 into the court registry, which included rent owed, court costs, and late fees. At the hearing, Finch argued that this payment restored her tenancy and requested the court to dismiss the landlord's claims.
Forest Creek opposed Finch's request, asserting that a judgment was necessary before her tenancy could be restored. However, the trial court ruled that Finch's payment allowed for the restoration of her tenancy at the show cause hearing, even before a judgment was entered. The court ordered her tenancy restored but also awarded attorney fees to Forest Creek based on a clause in the lease agreement.
Finch appealed the trial court's decision regarding the attorney fees. She argued that the lease's attorney fee clause was unenforceable under Washington state law, specifically citing former RCW 59.18.230(2)(c). This statute prohibits rental agreements from requiring tenants to pay landlords' attorney fees unless specifically allowed by the Residential Landlord-Tenant Act (RLTA).
The Court of Appeals agreed with Finch, stating that the trial court erred in awarding attorney fees. According to the court, the lease did not mandate an award of fees, and the relevant statutes did not support Forest Creek's claim for fees. The court noted, "The trial court erred by awarding Forest Creek attorney fees based on its lease."
The ruling emphasized that under RCW 59.18.290(3), attorney fees could only be awarded if the court had entered a judgment in favor of the landlord restoring possession of the property. Since the trial court never entered such a judgment, Finch was not liable for the attorney fees.
The Court of Appeals also addressed Forest Creek's argument that restoration of tenancy could not occur until after a judgment was entered. The court found that Forest Creek had not cross-appealed the trial court's ruling that allowed for the restoration of tenancy at the show cause hearing. Therefore, that ruling became the law of the case, and the court declined to revisit it.
This ruling is significant for both landlords and tenants in Washington. It clarifies that attorney fee clauses in rental agreements may not be enforceable if they contradict state law, specifically the RLTA. This decision could influence future unlawful detainer actions, as tenants may feel more empowered to challenge fees they believe are unjust or improperly awarded.
Looking ahead, this ruling may prompt landlords to reevaluate their lease agreements and the enforceability of attorney fee clauses. It also highlights the importance of understanding tenant rights under the RLTA. The case sets a precedent that could impact similar disputes across Washington state.
As for what’s next, Forest Creek has the option to appeal the Court of Appeals' decision, but details on any potential appeal were not available in the court filing. There are currently no related cases pending that directly connect to this ruling, but the implications of this decision may lead to further legal challenges in the realm of landlord-tenant law.