Washington has enacted Engrossed House Bill 2294 (“EHB 2294,” or the “Act”), which took effect on June 11, 2026, and adds a new chapter to Title 19 of the Revised Code of Washington.1
EHB 2294 voids most private agreements, including provisions in leases, deeds, and covenants, that bar or limit the use of a property for a grocery store or pharmacy. The Act is aimed at restrictions on real property that have the effect of limiting consumer access to food and medicine. EHB 2294 appears to be among the first statewide laws in the country to directly prohibit these private covenants. It has three exceptions, as further described below: restrictions already in effect before June 11, 2026; relocations; and retail centers. The Act may affect landlords, tenants, buyers, sellers, lenders, and grocery and pharmacy operators.
EHB 2294’s Prohibition
EHB 2294 prohibits private agreements that bar or limit the use of real property for a grocery store or pharmacy where applicable land use ordinances would otherwise permit the use, including as a conditional use. The Act declares that, unless one of its three exceptions applies, any such agreement is against public policy, void, and unenforceable, and it makes entering into one unlawful. The prohibition covers leases, deeds, covenants, and other agreements, whether or not recorded. It also covers a provision that only limits the size of a store, and a restriction aimed only at a pharmacy or a drug store.
The Act also limits what the beneficiary of a void restriction may do. If the restriction was agreed to on or after June 11, 2026, and no exception applies, the beneficiary may not allow it to remain and may not refuse to release it. The Act does not say how or by when a release must be given, or whether allowing a restriction “to remain” refers to its effect or to the record.
EHB 2294 requires a party that enters into an agreement imposing a grocery or pharmacy use restriction to notify the attorney general and the local jurisdiction (the city or town for property within one, and otherwise the county legislative authority) within ten days after entering the agreement. The Act does not state a consequence for failing to give notice, but the attorney general and local governments may enforce the law in court.
The Three Exceptions
EHB 2294 contains three exceptions to this prohibition. The first covers existing restrictions: a restriction that took effect before June 11, 2026, is not voided by the Act.
The second exception covers relocations. An owner or operator that closes a store in order to relocate may restrict the site it is leaving, but only if all four conditions described in the Act are met: (1) the new store must be similar in size or larger and sell a similar range of products; (2) it must be within two miles of the closed site; (3) it must open within two years after the closure, subject to force majeure; and (4) the restriction on the closed site must not run longer than five years from the closure.
The third exception covers retail centers. An agreement (also known as an exclusive) within a qualifying retail center may limit the number of grocery stores or pharmacies there. A retail center qualifies only if it has multiple owners or tenants, at least one shared common area, and common management or control through covenants or easements. An owner or operator that stops grocery or pharmacy use at its site in the center for more than one year may not lawfully seek to enforce the limit, unless the relocation exception applies.
A city, town, or county may, on an owner’s or operator’s written request, extend for good cause, by written determination and on evidence of extenuating circumstances, the two-mile distance (to as much as five miles), the two-year opening deadline, the five-year term, and the one-year discontinuation period. The Act sets no maximum for the other extensions. Factors for good cause include, but are not limited to, maintaining or increasing food and medicine access in the surrounding area, needs related to financing and construction for the new location, and promoting private investment in the surrounding area.
Implications of EHB 2294
Leasing
Landlords: EHB 2294 makes it unlawful to enter into a grocery or pharmacy exclusive unless an exception applies. If the center does not qualify as a retail center under the test described above, the exclusive is void, and the landlord has also entered into an agreement the Act makes unlawful. A landlord whose exclusive took effect on or after June 11, 2026, should consider taking these steps:
- Determine whether the center qualifies as a retail center, and confirm that a recorded declaration, reciprocal easement agreement, or similar document actually establishes common management or control.
- Confirm that the exclusive does only what the exception allows, which is to limit the number of grocery stores or pharmacies within the center.
- If the center qualifies, notify the attorney general and the local jurisdiction within ten days of entering the exclusive.
Tenants: A tenant whose exclusive took effect on or after June 11, 2026, and does not fit an exception has lost a protection it bargained for. EHB 2294 does not say who bears that loss, and its severability provision addresses only the Act itself, so whether the rest of the lease survives turns on the lease’s own severability clause and general contract law. For a lease that has already been signed, the Act gives the tenant no remedy for the loss, so unless the lease or other law provides one, any adjustment will likely need to be negotiated. A tenant should consider taking these steps:
- Before relying on an exclusive, ask the landlord for the documents showing that the center qualifies.
- In a new lease, negotiate what the tenant receives if the exclusive is void, such as a rent reduction, an abatement, or a right to terminate.
- If an amendment, extension, or renewal reset the date of an exclusive, it could turn an existing exclusive into a new, void one. Reciting in the amendment that it neither restates nor re-grants the exclusive and that the original effective date controls, although a recital may not control if the document in substance extends or expands the exclusive.
Acquisitions, Dispositions, and Financing
Buyers: A buyer that priced a site on the assumption that a covenant kept a competing grocer off an adjacent parcel should recheck that assumption during diligence. A title commitment would not necessarily settle whether the Act applies, because the Act also reaches unrecorded agreements, such as an exclusive in a lease. If a restriction depends on the relocation exception, the facts that decide whether it is valid, such as the replacement store’s size, distance, and opening date, may not be reflected in the public records. A buyer should consider taking these steps:
- Carefully review the title commitment for any recorded restrictions and identify the date each one took effect, because that date determines whether the exception for existing restrictions applies.
- Confirm the zoning, because the Act applies to a restriction only where applicable land use ordinances would otherwise permit the use.
- Ask the beneficiary for a certification of the facts that decide the relocation exception.
- If the buyer’s own site is burdened by a restriction that was agreed to on or after June 11, 2026, and no exception applies, the beneficiary is not permitted to refuse to release it, so make a recorded release a condition to closing. For a restriction that took effect earlier, or that fits an exception, the Act gives the buyer no right to a release, and any release must be negotiated.
Sellers: A seller conveying part of a property cannot protect the rest with a deed restriction on grocery or pharmacy use unless an exception applies. A seller that cannot qualify for an exception should consider pricing the sale on the basis that no private agreement restricts the buyer’s use. A seller should also consider taking these steps:
- Check existing leases and reciprocal easement agreements for promises to restrict land the seller sells, because the seller may be unable to keep any promise whose restriction would take effect on or after June 11, 2026, and does not fit an exception.
- In the purchase and sale agreement, state the effective date of each existing restriction and exclusive and limit the seller’s representations about them to its knowledge.
Operators: An owner or operator that closes a store in order to relocate may restrict the site it is leaving only if all four relocation conditions described above are met, and it may not be able to confirm all of them when the agreement creating the restriction is signed. An owner or operator should consider taking these steps:
- Draft the restriction around the four statutory conditions.
- Consider a certification signed by the operator when the new store opens, and a provision that the restriction ends automatically if a condition fails.
- Give the ten-day notice to the attorney general and the local jurisdiction after entering the agreement.
Lenders: The one-year rule matters to a lender whose collateral value depends on a grocery or pharmacy exclusive. If the owner or operator holding the exclusive (often an anchor tenant) stops operating for more than a year, unless the relocation exception applies, it may not lawfully seek to enforce a retail center exclusive. Such a lender may wish to take these steps:
- Ask the borrower for the date and source of each exclusive and, for a retail center, the documents showing that the center qualifies.
- Monitor whether the owner or operator holding the exclusive remains open, and require notice if its store closes.
- Require the lender’s approval of amendments to leases and easement agreements that affect a grandfathered exclusive, because the Act does not say whether an amendment resets the date.
- Update loan representations and estoppel certificates, which confirm the status of an agreement, to state the effective date of each exclusive, and require updated certificates from the anchor tenant and any party to a reciprocal easement agreement.
Enforcement of EHB 2294 and Unresolved Questions
EHB 2294 allows the attorney general and local governments to bring a court action to enforce it, including for declaratory or injunctive relief. A city or town may act as to property within its boundaries, and a county only as to property in unincorporated areas. EHB 2294 does not expressly create a private right of action or a civil penalty of its own, but it preserves local ordinances that impose civil penalties, so compliance with EHB 2294 does not establish compliance with local law.
EHB 2294 leaves two principal questions unanswered.
First, it is unclear whether amending, extending, or renewing a restriction that took effect before June 11, 2026, makes it a new agreement subject to the Act. If it does, the restriction could become void. The recital described in the Leasing section may reduce that risk.
Second, the Act voids a “negative use restriction” but does not define the term. A clause that bans a grocery or pharmacy use qualifies. It is unclear whether a clause that allows the use but makes it more expensive, such as extra rent or fees triggered by a grocery or pharmacy use, also qualifies.
Miller Nash’s real estate team can review a specific lease, reciprocal easement agreement, or title commitment, audit a portfolio for restrictions that may now be void, or revise transaction forms.
1 Engrossed House Bill 2294, 69th Leg., Reg. Sess. (Wash. 2026) (chapter 24, Laws of 2026), https://app.leg.wa.gov/billsummary/?BillNumber=2294&Year=2026.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.
