Source of income

Key Takeaways

• Washington law bars a landlord from refusing to rent to an otherwise eligible tenant because of that tenant's source of income, under RCW 59.18.255.
• Source of income includes housing assistance, public assistance, emergency rental assistance, veterans benefits, social security, and supplemental security income, and it excludes income derived in an illegal manner.
• When a landlord applies a minimum income standard, a rent voucher or subsidy must be subtracted from the monthly rent before the income test is calculated.
• A landlord who violates the statute faces civil liability of up to four and one-half times the monthly rent, plus court costs and reasonable attorneys' fees.

What It Means

Source of income is the lawful money a tenant uses to pay rent, and in Washington it is a protected characteristic in residential tenancies. The protection took effect on September 30, 2018. It covers benefit and subsidy programs, including housing assistance such as a Section 8 voucher, public assistance, emergency rental assistance, veterans benefits, social security, supplemental security income and other retirement programs, and programs administered by any federal, state, local, or nonprofit entity. Wages and other lawful earnings count too. Income derived in an illegal manner is written out of the definition, so the protection runs to lawful sources only.

The rule reaches further than an outright refusal to rent. A landlord may not expel a tenant, set different prices, terms, conditions, or fees, discourage an application, claim a unit is unavailable when it is not, or advertise a preference or limitation based on where the rent money comes from. It also changes the arithmetic of screening. When a landlord applies a minimum income standard, the voucher or subsidy comes off the rent before the standard is applied, so the test runs against the tenant's own share of the rent. Screening survives. The way it is calculated does not.

How It Works in Washington

The controlling law is RCW 59.18.255, part of the Residential Landlord-Tenant Act. Subsection (1) says a landlord may not, based on the source of income of an otherwise eligible prospective or current tenant, refuse to lease or rent, expel the tenant, make any distinction or restriction in the price, terms, conditions, fees, or privileges of the tenancy, attempt to discourage a rental, represent that a unit is unavailable when it is available, or otherwise make a dwelling unavailable. Subsection (2) extends the ban to advertising and any notice or sign indicating such a preference or limitation. Subsection (3) is the screening rule: if a landlord requires a threshold level of income, any source of income in the form of a rent voucher or subsidy must be subtracted from the total of the monthly rent before calculating whether the income criteria have been met. Subsection (4) sets liability at up to four and one-half times the monthly rent, plus court costs and reasonable attorneys' fees.

There is one narrow exception, and all three of its conditions have to be true at once: the tenant's source of income is conditioned on the property passing inspection, the written estimate of the improvements needed to pass is more than $1,500, and the landlord has not received money from the landlord mitigation program account to make them. Notice where this protection lives. The list of unfair practices in real estate transactions in the Washington Law Against Discrimination, RCW 49.60.222, does not name source of income, and neither does the federal Fair Housing Act. This is a landlord-tenant duty rather than a Protected Class entry in the discrimination statutes, so the property manager and the owner are the ones carrying it.

Example

Denise Corbett manages a two-bedroom apartment in Olympia that rents for $1,800 a month, and her screening standard is monthly income of three times the rent. Jerome Hall applies with a housing voucher that pays $1,100 of the rent, leaving $700 as his share. He earns $2,600 a month at a hospital job.

Run the standard the wrong way and Jerome fails: three times $1,800 is $5,400, and he is nowhere near it. RCW 59.18.255(3) requires the voucher to come off the rent first, so the real test is three times $700, or $2,100. Jerome's $2,600 clears it, and Denise cannot deny him for the reason she was about to use. Had she denied him anyway, the statute would expose the owner to up to four and one-half times the monthly rent, which is $8,100 on this unit, plus court costs and Jerome's attorneys' fees. Denise approves the application and keeps her screening file showing the corrected calculation.

Common Mistakes and Exam Traps

• Source of income is protected by the Residential Landlord-Tenant Act at RCW 59.18.255. It is not on the list of protected classes in RCW 49.60.222, and it is not a federal fair housing class.
• The statute does not require a landlord to drop income standards. It requires the voucher or subsidy to be subtracted from the rent before the standard is applied.
• Advertising is covered on its own. A listing that says no vouchers violates the statute even if no applicant is ever turned away.
• Income derived in an illegal manner is not a protected source of income.