First lawsuit enforcing governor’s emergency proclamation results in property management company paying nearly $300,000 to tenants

TACOMA — Attorney General Bob Ferguson announced May 27th that Nevada-based JRK Residential Group Inc. will pay nearly $350,000 —...

TACOMA — Attorney General Bob Ferguson announced May 27th that Nevada-based JRK Residential Group Inc. will pay nearly $350,000 — including almost $300,000 directly to tenants in the form of refunds, payments and rent forgiveness — to resolve a lawsuit Ferguson filed in April over the company’s violations of the state’s emergency eviction moratorium. Ferguson’s lawsuit was the first filed to enforce one of Gov. Jay Inslee’s emergency proclamations.

The governor issued a March 18 proclamation establishing a temporary moratorium on evictions for the inability to pay rent. The proclamation specifically prohibits landlords from issuing Notices to Pay or Vacate during the proclamation’s effective period. “Residential landlords are prohibited from serving a notice of unlawful detainer for default payment of rent related to such property under RCW 59.12.030(3),” the proclamation reads.

JRK Residential, a for-profit real estate investment firm and property management company, manages property in 20 states and boasts that its portfolio represents “approximately $6 billion of investment capital.”

Ferguson’s lawsuit, filed on April 20, asserted that JRK Residential violated the proclamation by issuing Notices to Pay or Vacate in April to at least 14 tenants of The Boulders at Puget Sound, a multi-building Tacoma apartment complex containing over 700 units. The lawsuit also asserted that JRK sent unfair, deceptive and harassing communications to approximately 1,400 Washington state tenants.

JRK knew about the Governor’s proclamation. In fact, the cover letter accompanying the Notices to Pay or Vacate acknowledged that JRK was “aware of the ‘no-evictions’ law.”

As part of the consent decree, filed late yesterday in Pierce County Superior Court, JRK will be required to:

• Forgive April 2020 rent, or offer refunds to those who paid, for 14 tenants at The Boulders at Puget Sound complex who received 14-day Notices to Pay or Vacate in violation of the governor’s proclamation;

• Once the consent decree is approved by the court, JRK will also be required to pay $246,900 to 1,441 tenants who received unfair, deceptive or harassing communications from JRK;

• Waive or refund fees for tenants who need or choose to move out before their lease is up while the governor’s proclamation is in effect.

The company will also be prohibited from issuing 14-day Notices to Pay or Vacate beyond the expiration of the governor’s current proclamation, through at least July 31. In addition to the payments to tenants, JRK Residential will pay $50,000 in costs and attorney fees to the Attorney General’s Office.

“JRK Residential knew about the governor’s proclamation, and ignored it,” Ferguson said. “This large, sophisticated corporation knew the law, and still threatened to evict tenants. This resolution makes those tenants whole. If you believe your property management company or landlord is violating the eviction moratorium, file a complaint with my office.”

“During this time of hardship and uncertainty, the moratorium on evictions is intended to help families and individuals keep a roof over their heads,” Inslee said. “Any property owners who attempt to remove people from their homes and skirt this order are breaking the law. I thank AG Ferguson and his team for enforcing the eviction moratorium.”

JRK Residential’s Conduct

JRK Residential violated the governor’s proclamation by issuing pay or vacate notices in April to at least 14 tenants of The Boulders at Puget Sound. Tenants discovered the Notices to Pay or Vacate at their front doors. In spite of this knowledge, the notice instructed tenants to pay all rent due within 14 days or be “subject to eviction as provided by law.” The notice stated that it was “unconditional,” and threatened tenants that if they failed to “surrender the premises,” they would “be guilty of unlawful detainer and subject to eviction.”

In addition, beginning on April 1, JRK sent multiple emails to tenants reminding them that rent was due, and stating that they would “not waive any late fees.” The day before issuing the pay or vacate notices, JRK Residential left notices at those tenants’ doors informing them that their rent payments were late. This notice and later notices pressuring tenants to pay April 2020 rent did not mention the governor’s proclamation prohibiting evictions for non-payment of rent.

In addition to violating the express terms of Gov. Inslee’s proclamation by issuing the notices to pay or vacate to tenants of The Boulders, Ferguson’s lawsuit asserted that JRK Residential unfairly and deceptively pressured tenants to pay outstanding rent by sending numerous threatening emails and notices, sometimes multiple times per day, and making harassing phone calls to tenants or their workplaces.

JRK Residential’s conduct negatively impacted Washington residents in ways that Gov. Inslee’s proclamation explicitly intended to prevent. JRK Residential threatened and harassed several tenants who recently lost their jobs due to the global pandemic. The following examples highlight the harm caused by JRK Residential’s unlawful conduct:

One Boulders at Puget Sound resident lives with two roommates, and reports that 2 of the 3 people in her apartment lost their jobs as a result of COVID-19. She was a line cook and her roommate worked at a casino. She and her girlfriend have children and are very worried about becoming homeless. They had to scrape together every penny they had to pay April rent.

Another Boulders at Puget Sound resident lost her job at a children’s birthday company due to the pandemic. She told the Tacoma News Tribune, “I can’t sleep. I’ve got butterflies in my stomach. I’ve even considered being homeless this summer and putting up a tent with my daughter and husband because it would be warm enough to live outside.”

Another Boulders at Puget Sound resident lives with her three children and her husband, a disabled veteran. Paying rent on a single income became difficult after she stopped receiving financial assistance from a family member who passed away. She told the Tacoma News Tribune, “They have given us this notice so when the eviction order is over, they can take action right away. I’ve called 211 to find some help, and we were thinking of becoming homeless because having an eviction on your record makes it so hard to find another place.”

A resident at Carroll’s Creek Landing in Marysville who worked for an aerospace manufacturer was furloughed and then laid off due to COVID-19, so she was only able to make a partial rent payment in April. Even after advising JRK Residential of her situation, she received multiple phone calls asking if she received her stimulus check. These calls were upsetting to the resident.

Another Carroll’s Creek Landing resident is a single mom of three and survivor of domestic violence who does not receive child support. She also lost her job due to the pandemic. Although she applied for unemployment, like thousands of other Washingtonians, she has not yet received any unemployment benefits. She did not have money for rent and other bills — or even for money for formula, diapers and baby wipes. JRK Residential attached multiple notices regarding the rent to her door. Consequently, she felt singled out and embarrassed due to her precarious financial situation. Ultimately, this single parent had to borrow money from her mother to make a payment.

Consent decree details

JRK Residential will pay approximately $344,646 to resolve the lawsuit, with $294,645.69 going directly to tenants in the form of refunds, rent forgiveness, or direct payments, including:

• Full rent forgiveness or refunds of April 2020 rent for the 14 Boulders at Puget Sound tenants who received 14-day Notices to Pay or Vacate — a total of $26,877.69;

• $500 payments to 257 JRK tenants who were behind on April rent at the time that JRK sent letters that attempted to shame or harass tenants who had been unable to pay full April rent — a total of $128,500; and

• $100 payments to 1,184 JRK tenants who received the unfair and deceptive letters but were not behind on April rent — a total of $118,400.

The consent decree also requires JRK Residential to waive or refund fees for tenants who need or want to move out before their lease is up, starting April 1 and while the governor’s order is in effect.

In addition to the payments to tenants, JRK Residential will pay $50,000 in costs and attorney fees to the Attorney General’s Office.

The consent decree bars JRK Residential from issuing 14-day Notices to Pay or Vacate through July 31, unless the governor’s order is extended beyond that date. It is also prohibited from issuing harassing communications about the payment of rent, contacting a tenant’s employer, or unfairly seeking to cause a tenant to use federal stimulus payments or unemployment benefits to pay rent over other essential needs. JRK must also accurately represent the governor’s eviction proclamation in its communications with tenants.

Assistant Attorneys General Marsha Chien, Patricio Marquez and Ashley McDowell with the Attorney General’s Wing Luke Civil Rights Division handled the case.

The Attorney General’s active enforcement of the eviction moratorium

Ferguson’s Civil Rights Division began receiving complaints from tenants shortly after Gov. Inslee issued his proclamation. The Attorney General’s Office launched an eviction complaint form on April 1. Since then, more than 1,800 Washingtonians have filed complaints. The Attorney General’s Office has contacted more than 1,380 tenants and more than 900 landlords in response to complaints.

More than 20 assistant attorneys general from other divisions in the office are assisting the Civil Rights Division in responding to these complaints.

Washingtonians concerned about violations of the governor’s eviction moratorium can file a complaint online here: https://fortress.wa.gov/atg/formhandler/ago/COVID19EvictionComplaintForm.aspx. Landlords who have questions about the eviction moratorium or their rights under the proclamation can contact the Attorney General’s Office at the same website.

Ferguson created the Wing Luke Civil Rights Division in 2015 to protect the rights of all Washington tenants by enforcing state and federal anti-discrimination laws. Ferguson named the division for Wing Luke, who served as an Assistant Attorney General for the State of Washington in the late 1950s and early 1960s. He went on to become the first person of color elected to the Seattle City Council and the first Asian-American elected to public office in the Pacific Northwest.

The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.

– Office of the Attorney General

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