HB 1858
SignedHouse
Deed of trust assignment/fee
Eliminating the exemption for assignments or substitutions of previously recorded deeds of trust from the document recording fee and the covenant homeownership program assessment.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill removes an exemption that previously let lenders and homebuyers avoid paying two fees—$100 and $183—when recording assignments or substitutions of already-recorded deeds of trust. The added revenue will support affordable housing, homelessness prevention, and landlord mitigation programs across the state.
- Eliminates the exemption for assignments or substitutions of previously recorded deeds of trust from the $100 covenant homeownership program assessment and the $183 document recording surcharge.
- Adds $100 to the existing $183 surcharge for most recorded documents, starting January 1, 2024, unless another exemption applies.
- Requires counties to retain up to 10% of the surcharge for administrative costs and to distribute at least 75% to local cities with approved homeless housing plans.
- Directs most of the collected funds to the state’s home security fund, affordable housing for all account, and landlord mitigation program account, with specific funding formulas for each.
- Requires the Department of Commerce to prioritize funding for programs serving people who are chronically homeless, have disabilities, or are at risk of homelessness.
Who is affected
- Homebuyers and lenders — Homebuyers and lenders who record assignments or substitutions of previously recorded deeds of trust will now pay the standard $100 covenant homeownership program assessment and $183 surcharge, whereas previously these documents were exempt.
- County governments — Counties will collect and distribute increased fees, with retained portions supporting local homelessness and housing programs, and must follow new rules for distributing funds to cities with local housing plans.
- State agencies (e.g., Department of Commerce) — State agencies—especially the Department of Commerce—will receive increased funding to support homelessness prevention, affordable housing, and landlord mitigation programs.
- Low- and very low-income households — Low- and very low-income households will benefit from increased funding for affordable housing, rental assistance, emergency shelter, and permanent supportive housing.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Generates an estimated $20–30 million annually in new state and county revenue dedicated to permanent supportive housing, eviction prevention, and rental assistance for extremely low- and very low-income households — directly addressing Washington’s housing crisis and reducing homelessness among the most vulnerable populations.
HousingPeopleRef: Sec. 2(4)(b) & (5)(b)Prioritizes funding for programs serving people who are chronically homeless and have disabilities, which can reduce public health risks, emergency service calls, and incarceration-related costs — yielding long-term savings in healthcare, law enforcement, and corrections systems.
Public SafetyPeopleRef: Sec. 2(4)(b)Directs at least 15% of county-level surcharge revenue to housing activities for extremely low-income households (≤30% AMI), including acquisition, rehabilitation, and rental assistance — a targeted intervention that can stabilize vulnerable families and reduce displacement.
HousingPeopleRef: Sec. 2(3)(c)Establishes a dedicated funding stream for the landlord mitigation program, which helps small landlords (especially in rural or high-cost areas) cover costs of rent-controlled or subsidized units — potentially reducing tenant turnover and maintaining stable housing stock.
HousingPeopleRef: Sec. 2(6)Empowers counties to fund local homeless housing plans through a dedicated revenue source, increasing accountability and local control over homelessness response — a shift from general-fund dependency to performance-based local investment.
Local GovernmentPeopleRef: Sec. 2(3)(b)
Potential Concerns (5)
Increases recording fees by $283 total ($100 covenant assessment + $183 surcharge) for homebuyers and lenders when recording assignments or substitutions of previously recorded deeds of trust — a transaction common in refinancing, loan transfers, or real estate closings. This raises transaction costs at a time when housing affordability is already strained, disproportionately affecting middle- and working-class households who refinance or sell homes.
FinancialPeopleRef: Sec. 1(1) & Sec. 2(1)(a)Requires counties to distribute at least 75% of surcharge revenue to cities with approved local homeless housing plans, but excludes cities without such plans — potentially leaving unincorporated areas and smaller municipalities without dedicated funding streams, creating uneven access to homelessness services across the state.
Local GovernmentPeopleRef: Sec. 2(3)(b) & (c)Allows counties to retain up to 10% of the $183 surcharge for administrative costs, but does not cap or audit those costs, risking that administrative overhead could divert funds from direct housing services — especially problematic in smaller counties with limited oversight capacity.
Local GovernmentPeopleRef: Sec. 2(3)(a)Eliminates a long-standing exemption for deed of trust assignments/substitutions, effectively creating a new fee on financial transactions that were previously exempt — a de facto tax on mortgage liquidity that may discourage refinancing and reduce housing market efficiency, especially for lower- and middle-income homeowners who rely on refinancing to manage debt.
FinancialPeopleRef: Sec. 1(2)(a) & Sec. 2(1)(a)Requires counties to follow new distribution rules for surcharge revenue, increasing administrative burden on county auditors and finance departments, especially in rural counties with limited staff and technology infrastructure.
Local GovernmentRef: Sec. 2(2)(a) & (b)
Who Is Most Affected
Homebuyers and lenders face higher transaction costs when recording deed of trust assignments or substitutions — a common step in refinancing or loan transfers. While the fee is modest per transaction, it adds up across thousands of annual transactions and may discourage refinancing among middle-income households.
Counties gain new revenue but also new administrative responsibilities, including tracking local homeless housing plans and distributing funds to cities. Smaller counties may struggle with capacity, but larger counties (e.g., King, Snohomish) could see significant net gains in funding for local housing programs.
Low- and very low-income households are the primary intended beneficiaries: funds are explicitly targeted to permanent supportive housing, eviction prevention, and rental assistance. This bill directly expands access to housing stability for those most at risk.
Small landlords (especially those participating in rent-controlled or subsidized programs) benefit from the landlord mitigation program, which offsets costs of maintaining affordable units. Large institutional landlords are less affected, as the program is designed for smaller-scale operators.