Some tenants in Southwest Washington and other parts of the state could face a predicament the next time they sign or renew a lease: either sign a nondisclosure agreement or risk eviction and having to look elsewhere in a tight housing market. The NDAs are being used to prevent tenants from disclosing to others, with the exception of immediate family members, how much they pay in rent, security deposits or other associated fees.
According to reporting by The Columbian, the use of NDAs by landlords is raising concerns among tenant advocates that they could be used to discriminate against prospective renters, such as people who use Section 8 federal housing vouchers. Landlords could, for example, advertise properties with high monthly rents and security deposits while reducing those fees through NDAs in contracts they offer higher-income tenants.
Alexis Weisend, the affordable housing and homelessness reporter at The Columbian, joins us to share more details.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. Some tenants in Southwest Washington and other parts of the state could face a difficult choice the next time they sign or renew a lease: either agree to not talk about how much rent they’re paying with anyone outside of their immediate family or risk losing out on the unit. According to reporting by The Columbian, tenant advocates are worried that these nondisclosure agreements could be used to discriminate against prospective renters.
Alexis Weisend is the affordable housing and homelessness reporter at The Columbian. She wrote about this and she joins us with more. It’s good to have you back.
Alexis Weisend: Thanks. Glad to be here.
Miller: How did you first hear about this issue?
Weisend: A man named Steven reached out to me. He said that he was renewing his lease on his Vancouver townhome when he noticed this strange little paragraph tucked in between all of these words of lease, that said “nondisclosure.” And it said … I have the exact wording, if you’d like to hear …
Miller: Please.
Weisend: It said, “An exclusive offer has been negotiated and mutually agreed upon by the aforementioned residents and owner/agent. It is hereby agreed that the residents abide by the following condition: nondisclosure of any details of the offer, including rent amount, security deposit or fees, rent concessions, moving gifts or lease specials, or terms to anyone outside the party’s immediate family. Failure to comply with the above condition will result in the immediate retraction of the offer, and all normal deposits, fees, rent amounts, and lease terms will apply, and any rent concessions or gifts shall be paid back to the owner/agent.”
Miller: Talk about this with anybody outside of your family, any aspect of what you’ve agreed to pay us, and you have to give us … and we’ll keep all that money, basically.
Weisend: Essentially. It’s kind of strange. It’s like, what happens if you violate this? It’s such a small little paragraph. I mean, when you think of NDAs, you think of these really lengthy agreements that are written by lawyers or something like that. This is a really small, vague, confusing paragraph.
Miller: So he called you up and said, “Hey, by the way, I saw this nondisclosure clause paragraph in the lease I got – you should look into it”?
Weisend: Yeah, essentially. He was concerned about all of the possible consequences that this could come with. Mainly, for him, he was talking about the fact that it could be used for market distortion. If this is widespread, you don’t know what your neighbor or anyone else is actually paying for rent. There’s an advertised rent, but why sign an NDA if you already know what the rent is being advertised as? It just doesn’t really make any sense. It could have a lot of different kinds of consequences.
Miller: The first line of that caught my attention too – talks about an “exclusive offer.” Did this man, Steven Sandoval, who you wrote about in the article, think he had gotten an exclusive offer on that townhouse?
Weisend: Well, he has roommates. And the wording of this is really strange because it seems like the resident is getting some sort of discount in exchange for signing this NDA. Steven said he didn’t get any such discount. However, when I reached out to the property management owner at TMG, they said that they purchased these leases from Ginn Group, who no longer does property management. That’s why this lease goes back all the way to 2019 and this clause stayed in the whole time.
Miller: Oh, so he hadn’t noticed it before, but this actually has been in the lease that he signed, perhaps, in the past – last year or in previous years.
Weisend: Yeah, ‘cause let’s be honest, I mean, do we all read through our legal documents?
Miller: No … we should, but who among us does?
Weisend: Yeah.
Miller: Well, is it possible to know how common these are?
Weisend: Not right now. I mean, this is a private market and so if they don’t want to talk about something like this, they don’t have to. It’s really difficult to find out, especially if you have been told you are not legally allowed to talk about this, you can’t talk about it.
Miller: Let me make sure I understand that part because you read this particular paragraph once to us, but probably I and a lot of people didn’t get all the details. What I remember is, you can’t talk about how much you’re paying in rent, or the fees, or the security deposit with people outside your immediate family. Can you talk about the fact that you signed something saying you can’t talk about how much you’re paying? I mean, is the nondisclosure agreement itself something that cannot be disclosed?
Weisend: That’s the issue. This is so vague that tenants, me, as a reporter, lawyers, advocates, we have no idea. It doesn’t really make any sense, but it’s just vague enough that the point is – that these advocates say – to scare tenants. I have no idea, lawyers have no idea, if this is enforceable. The entire point of this being in leases is to have this chilling effect.
Miller: When you say lawyers don’t know if this is enforceable, what do you mean? What did they tell you?
Weisend: Well, according to this lawyer that I spoke to with the Northwest Justice Project, the court takes into consideration the level of “reasonability,” when it comes to civil issues like this. So if a tenant was brought to court by a landlord for, let’s say, posting about a bad review, and saying, “I got this insane rent increase, and I don’t like my property manager.” If that was brought to court and the landlord tried to seek damages, this lawyer said that the court would evaluate whether or not that was a fair trade-off. Is enough damage being done to the landlord by revealing the rent or posting that review that it would warrant whatever damages that are awarded?
Miller: Oh, so even if the renter had signed the lease that had that NDA clause in it, a court might still say, yes, they signed it, but it was not a fair thing to ever be in a contract in the first place. So we are not going to require that it be enforced.
Weisend: Right. That’s possible. But if you are a low-income tenant, you’re not going to, one, want to risk your housing or, two, really have the funds to bring this to court.
Miller: You talked to a woman in Lakewood, and you didn’t include her name in your reporting. What did you hear from her?
Weisend: It was really important to me to find another person who had gone through this, because what could have happened to Steven, maybe that was just one person. And so I reached out to my Washington network, and I found this woman in Lakewood. She said that she had been in her apartment complex for a few years. She had started talking with her neighbors and noticed that apartments that were very similar – the same apartment, on the same floor – would be priced vastly differently.
They didn’t really think that was fair, so they started complaining. Then the next time the rental renewal lease came around, it came with an NDA and also, for this woman, a $607 increase, which at the time was a third of her rent. She didn’t have the funds to move at that point. She didn’t want to move, so she agreed to sign that nondisclosure agreement and she didn’t talk to her neighbors anymore.
Miller: This seems like a really different situation than the first one with Steven Sandoval, because it seems like, unless she had just not noticed it before, this was a new clause that was added. And it came after she had been public about being unhappy about differences in the rents people were paying, and alongside a really big increase in rents. She wouldn’t give you her name because of the NDA … is that the sense you got?
Weisend: Right. I mean, I know her name but she wouldn’t want to reveal her name because she is scared. I mean, the NDA did what it’s possibly designed to do, which is to make people afraid.
Miller: I want to turn to a couple specific concerns that you heard about from housing advocates. One of them is connected with Section 8 vouchers. What’s the issue at play here?
Weisend: There are laws that apply everywhere in the country, where you cannot discriminate against someone for the government paying part of your rent. So if you’re a Section 8 tenant and the government is paying part or all of your rent, a landlord cannot deny you housing simply because of that fact. It has to be something else. And so what these NDAs allow for, hypothetically, is for apartments to be priced unaffordably.
The government will only pay a reasonable amount of rent – it’s average is like $1,600 for a one bedroom in Vancouver. If you price your unit at maybe $1,800, because you don’t want a Section 8 tenant, but you like your current tenants, then a Section 8 tenant is not going to look at that housing as a possibility. It’s going to turn away that group of people, that demographic, and it’s only going to allow people who can afford, I don’t know, $1,900 in rent. But then at that time, if you like the person, if you like something about, I don’t know, their identity or something, then you could say, “Well, I’ll give you a discount, but don’t talk about it. Here’s an NDA.”
Miller: And it’s interesting, what you just outlined, would it technically be legal? It’s an end run around something, that … I just can’t tell if what you just described would go against the letter of federal law, or just the spirit of federal law.
Weisend: Right, that’s the problem. When something like this is not explicitly outlawed, then there’s always that argument. You have to prove in a court of law, that was someone’s intention. It’s really hard to do that, and as far as I know, nowhere, including Washington, explicitly outlaws NDAs in rental leases. Oregon doesn’t either.
Miller: People also told you – and this is adjacent to what you just described, but in the opposite direction – about fears of housing discrimination based on race or ethnicity. How might that work, and how might an NDA enable that? Something that, if I’m not mistaken, is also against federal law.
Weisend: Right, it can’t look like you’re pushing someone out of housing or denying them housing because of their race. Same thing goes with the Section 8 tenants. So, for example, this woman in Lakewood, she has a Hispanic last name and her concern was, yes, she’s complaining about the differences in apartment pricing. However, what if she was the only one who received that rent increase, and her apartment complex is trying to push her out for having a Hispanic last name and trying to keep other tenants? And this is all possibly hypothetical. We don’t know if this is actually the case, but the problem is there’s a whole can of worms that opens up with this being a possibility.
Miller: And without the transparency of people being able to share how much they’re paying or how much they’re being asked to pay, there’s no way to know for sure if that kind of discrimination is happening.
Weisend: Exactly.
Miller: You reference a Boston example in your article. What happened there?
Weisend: In this Boston apartment complex, there was a lot of tension between the property management and these tenants. And the tenants had formed a tenant union that was causing a lot of problems for the apartment complex. The apartment complex hit them with a lot of rent increases all at once. Then the tenants found out – because they’re talking to each other – that with the renewal leases, where all of them had rent increases, some of the tenants who were possibly considered more desirable, not complaining as much, were given an NDA and a discount … as in, “We won’t give you as much of a rent increase if you don’t talk about it.”
So the tenants worried that certain people were going to be pushed out because they were complaining. But there was a lot of public outcry, the city council attended meetings with these tenants and eventually the property management just dropped it.
Miller: Did anybody that you talked to defend the use of these clauses?
Weisend: I did reach out to some landlords to ask whether or not they had ever heard of something like this. None of them had. But I was able to talk to, over email, Rob Trickler of the Washington Landlord Association. He said he’d never heard of it, but he thinks that a possible reason for these being used is if tenants become a problem for landlords – so if they try to post something online that is blatantly untrue and meant to harm the reputation of the landlord.
Miller: It seems like there might be other ways to address that than a blanket NDA like the kind that we’re talking about.
Weisend: Right. And you’d also think that bad reviews are a common thing that happens in other industries as well. I mean, you see bad reviews on Google and Yelp for dentists, and salons, and auto repair shops …
Miller: … And restaurants, and on, and on, and on … half of online reviews are negative, based on goods and services.
Weisend: But they don’t slap them with an NDA before they see their customers.
Miller: Did the tenants rights people or lawyers that you talked to suggest what renters or potential renters should do if they do encounter these kinds of clauses?
Weisend: It’s difficult. I asked them both that question. And the problem is, they don’t really know, because they don’t know what the consequences are. As far as I know, and as far as they know, we’ve never seen how one of these NDAs plays out. We don’t know whether they’re enforceable. We don’t know if there are any actual legitimate consequences. So it’s difficult, like this lawyer said, to tell someone to seek advice about this when I’m asking them to put their housing in jeopardy. Even though he said that people have a right to understand whether the contract they’re signing is legal, it’s difficult.
Miller: We talked about the woman that you talked to in Lakewood, who did not want you to use her name in your reporting. But you did use Steven Sandoval’s name, because he said it’s OK, and he’s the one who tipped you off about this. Why is it that he felt comfortable bringing this to the public’s attention in a public way?
Weisend: I checked with him several times to make sure he was OK with his name being used. And he said, “yeah, I want people to know about this issue.” And he said he was at a place in his life where, if he needed to move, if they said that, I think the wording was “retracting the offer,” he could move, he wanted to. And a lot of people don’t have the opportunity to do that.
Miller: So for him, his willingness to talk illustrates something about what’s at stake here. He has the means or the ability to find some other home somewhere else, so he has the power to talk.
Weisend: Right. And one quote from this advocate – Michelle Thomas, of the Washington Low Income Housing Alliance – that stuck with me was, she said that she wants politicians to know that their constituents cannot tell them what’s happening to them.
Miller: Alexis Weisend, thanks very much.
Weisend: Thank you.
Miller: Alexis Weisend is the affordable housing and homelessness reporter for The Columbian. There is a link to her article on our website.
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