AG Ferguson enforces emergency eviction proclamation, sues Nevada-based property management corporation for issuing notices to ‘pay or vacate’

TACOMA — Today Attorney General Bob Ferguson filed a lawsuit against JRK Residential Group Inc. for violating Governor Inslee’s Emergency “Evictions” Proclamation. Inslee’s “Evictions” Proclamation establishes 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.

JRK Residential is a Nevada-based for-profit real estate investment firm and property management company that operates at least four apartment complexes in Pierce, Snohomish, and Kitsap Counties. JRK Residential manages property in 20 states and boasts that its portfolio represents “approximately $6 billion of investment capital.”

The lawsuit, filed in Pierce County Superior Court, asserts JRK Residential violated Governor Inslee’s “Evictions” Proclamation by issuing Notices to Pay or Vacate in April to at least fourteen residents of The Boulders at Puget Sound. The Boulders at Puget Sound is a multi-building Tacoma apartment complex containing over 700 units. Residents discovered the hard copy notices at their front doors. A cover letter indicated that “Boulders management” was aware of the “‘no-evictions’ law.” In spite of this knowledge, the notice nevertheless instructed residents to pay all rents due within fourteen days or be “subject to eviction as provided by law.” The Notice to Pay or Vacate stated that it was “unconditional,” and threated tenants that if they failed to “surrender the premises,” they would “be guilty of unlawful detainer and subject to eviction.”

In addition to violating the express terms of Governor Inslee’s Proclamation by issuing the Notices to Pay or Vacate to residents of The Boulders, JRK Residential unfairly and deceptively pressured residents to pay outstanding rent by sending numerous threatening emails and notices, sometimes multiple times per day, and making harassing phone calls to tenants or tenants’ workplaces.

Ferguson’s lawsuit is the first state lawsuit filed to enforce one of Governor Inslee’s emergency proclamations.

“JRK Residential is a large, sophisticated corporation that knew about the Governor’s Emergency Evictions Proclamation – and ignored it anyway,” Ferguson said. “Their conduct is cruel and unlawful – and we will hold them accountable.” 

“As Washingtonians struggle with the impact of COVID-19, the last thing they need to worry about is losing the roof over their heads,” Gov. Jay Inslee said. “That’s why I put a moratorium on evictions and if landlords willfully break that law there will be consequences. Washingtonians are hurting economically and kicking them out on the street is morally and legally wrong. I thank Attorney General Ferguson and his team for holding this company responsible.”

JRK Residential’s conduct negatively impacted Washington residents in ways that Governor 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 Soundresident 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 Soundresident lost her job due 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 Soundresident 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 Marysille 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 so the harassing communications would come to an end, allowing her tofocus on her health and family.

Other residents at JRK Residential apartment complexes reported harassing rent collection attempts caused them high levels of stress and anxiety. The Attorney General’s Office also received a complaint regarding harassing behavior from one of JRK Residential’s complexes in Silverdale (Silverdale Ridge Apartments). JRK Residential has at least one other complex in Silverdale, Trillium Heights apartments.

 

Governor Inslee’s Emergency Eviction Proclamation

On March 18, Governor Inslee issued Emergency Proclamation 20-19, titled “Evictions,” to help preserve and maintain life, health, property or the public peace by prohibiting certain residential evictions and related actions statewide until April 17. Actions prohibited under Emergency Proclamation 20-19 include serving fourteen-day notices to pay or vacate.

On April 16, Governor Inslee renewed and expanded the “Evictions” Proclamation. The current Proclamation is in effect until June 4.

 

Timeline of the Boulders at Puget Sound’s unlawful conduct

JRK Residential’s numerous emails, letters, and calls to tenants at the beginning of April represented a marked increase over its usual practice of communicating with residents about rent. For example, in early April, JRK Residential sent multiple threatening emails demanding rent without mentioning the moratorium on evictions.

• On April 1, JRK Residential sent emails to residents reminding them that “Rent is Due today.” “If rent is paid after 11:59 PM on the 3rd then you will be considered late and corresponding lease late fees will be applied to your account.” The April 1 emails failed to mention the Evictions Proclamation.
• On April 2, JRK Residential sent more emails to residents. These emails referenced the federal stimulus payments. “These cash payments are being sent to you directly so that everyone can continue to pay for necessities such as rent and avoid running behind on these essential bills, which can hurt your credit and create serious financial problems for you in the future.” The April 2 emails did not mention the Evictions Proclamation.
• On April 3, JRK Residential’s tenants received at least two emails. A morning email told them it was the “last day to pay rent.” Later in the day, another email threatened that it was the “final hours to pay rent.” The later email added, in bold, “we will not waive any late fees.” The April 3 emails also failed to mention the Evictions Proclamation.
• The day before issuing the Notices to Pay or Vacate to certain residents, JRK Residential left notices at those residents’ doors informing them that their rent payments were late. These notices again informed the residents that the federal government recently enacted a stimulus bill and that monthly unemployment insurance payments increased, but still failed to acknowledge that no resident had received such benefits and some residents will not qualify to receive the benefits. This notice did not mention the Governor’s proclamation prohibiting evictions for non-payment of rent.
• On or about April 9, JRK Residential sent 14-day Notices to Pay or Vacateto at least 14 Boulders at Puget Sound residents in direct violation of the Governor’s proclamation.
• On April 9 and 10, JRK Residential sent notices stating that 93 percent of residents had paid their April rent, and advising those who had not: “[R]ental forgiveness is not an option.” The notice again referred to the federal stimulus payments “being sent to you directly so that everyone can continue to pay for necessities such as rent” and concluded by threatening that failing to contact property management about repayment would “ultimately ruin your credit.”

After receiving numerous complaints regarding JRK Residential’s conduct, Ferguson’s office sent the company a letter on April 13, requesting that it immediately rescind the Notices to Pay or Vacate, notify all residents that the Governor’s Evictions Proclamation prohibits such notices during the state of emergency, and provide the Attorney General’s office with copies of all notices.

Instead, on April 15, JRK Residential sent yet another notice to residents. For at least the third time, JRK Residential referred to the federal stimulus bill and noted that “everyone would have ample cash to pay necessities like rent,” this time advising residents that they should check their bank accounts “regularly” because the federal government began sending stimulus checks beginning “this past Saturday.” Only later that day did JRK Residential issue “rescission” letters to residents at The Boulders who received improper Notices to Pay or Vacate. JRK Residential ignored a request from the Office of the Attorney General’s request for the number of residents who received rescission letters.

 

Violations asserted

Ferguson asserts JRK Residential violated the Governor’s Proclamation. He also asserts JRK Residential’s conduct violated the Consumer Protection Act, which prohibits unfair and deceptive business practices, by “engaging in tactics designed to pressure tenants to pay rent that were unreasonable, misleading, misrepresented residents’ rights, and were unfair in light of the ongoing public health and economic emergency.”

Ferguson’s lawsuit seeks restitution for impacted tenants, a penalty to hold JRK Residential accountable for its conduct and deter future bad actors, and reimbursement of the costs and fees of bringing the lawsuit. Ferguson also asks the court to order JRK Residential to comply with the laws. In Consumer Protection Act cases brought by the Attorney General, the judge can award a penalty up to $2,000 per violation. Ferguson’s complaint asserts numerous violations of the Consumer Protection Act.

Residents of The Boulders at Puget Sound, Carroll’s Creek Landing, Trillium Heights Apartments, Silverdale Ridge Apartments, or any other Washington properties managed by JRK Residential, who have experienced difficulties paying rent due to COVID-19 and have been impacted by JRK Residential’s practices described above, should contact the Attorney General’s Wing Luke Civil Rights Division at 1-833-660-4877 and choose option 9 from the main menu, or by email at jrkresidential@atg.wa.gov.

The Attorney General’s Wing Luke Civil Rights Unit is handling the lawsuit. Assistant Attorneys General Marsha Chien, Patricio Marquez, and Ashley McDowell are the lead attorneys on the case.

 

The Attorney General’s active enforcement of the eviction moratorium

Ferguson’s civil rights division began receiving complaints from tenants shortly after Governor Inslee issued his “Evictions” Proclamation. The Attorney General’s Office launched an eviction complaint form on April 1. Since then, more than 650 Washingtonians have filed complaints. The Attorney General’s Office has contacted 469 tenants and 284 landlords in response to complaints.

More than a dozen assistant attorneys general from other divisions in the office are volunteering their time to assist the Civil Rights Division in responding to these complaints.

Washingtonians concerned about violations of the Proclamation can file a complaint at www.atg.wa.gov/file-complaint.

 

Protections for Homeowners

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) grants relief for homeowners who have federally owned or insured mortgages. The mortgages eligible for relief under the CARES Act include those owned or insured by the United States Department of Housing and Urban Development (HUD), Fannie Mae, Freddie Mac, United States Department of Veterans Affairs (VA), Federal Housing Administration (FHA), and United States Department of Agriculture (USDA). The majority of American homeowners possess a federally owned or backed mortgage. Those who do not will need to contact their servicer to learn what options are available.

-30-

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.

Contacts:

Brionna Aho, Communications Director, (360) 753-2727; Brionna.aho@atg.wa.gov