Although not a requirement by Washington law, most (if not all) landlords in Washington ask for a security deposit from their tenants.
Usually equivalent to one month's rent, a tenant’s deposit is meant to cushion you against financial damage that may occur in a variety of lease scenarios. Examples include tenant’s refusal to pay rent, abandonment, excessive damages, and failure by the tenant to clear their utility bills at the time of moving out.
Luckily, issues can be avoided if both parties to the lease understand the laws in Washington. The rental management experts at Windermere Property Management have created this article to help you get a better understanding of Washington security deposit laws.
How much is a security deposit in Washington?
In Washington, a landlord can charge tenants any amount they see fit. That said, most landlords normally charge the equivalent of one to two months’ rent.
What must a landlord do after collecting the tenant’s security deposit?
Washington law requires that a landlord must provide their tenant with a written notice upon receipt of their deposit. The notice must state both the amount as well as the name and address of the financial institution holding the money.
If at some point during the rent period, you transfer the money to a different institution or landlord, then you must give a notice to the tenants of the change.
How should a landlord store a tenant’s deposit?
A landlord in Washington state has three options:
- One, a landlord may use a trust account. Here, the money should be kept separate and not commingled with other funds.
- Two, a landlord can keep the money in a financial institution that’s recognized countrywide. Such institutions may include banks, trust companies, and credit unions.
- Three, a landlord may store the security money with an escrow agent. In this case, the Washington law requires that the agent be located and licensed in the state of Washington.
These accounts can either earn interest or not. If they do, then the interest payable becomes the landlord’s, unless both parties agree on different terms. If both parties agree on other terms, everything should be documented in the lease.
Can a Security Deposit be Non-Refundable in Washington state?
Washington recognizes nonrefundable fees and deposits as being different. By definition, while a deposit is refundable, non-refundable fees are not, and security deposits are not considered a non-refundable fee (RCW 59.18.285).
Various states differ on whether landlords should charge nonrefundable fees or not. Washington landlord-tenant laws allow you to charge a tenant non-refundable fees. A good example where you can require a non-refundable fee is when tenants have a pet in the unit.
For such a fee to be legally binding, landlords must state it clearly in a written rental agreement. If a landlord fails to include the fee in the rental agreement, then it becomes refundable at the end of the rental agreement term.
When do landlords have to return security deposits in Washington?
Landlords have 21 days once a tenant has moved out to give the deposit back to their tenant. If the tenant has caused damage exceeding normal wear and tear, then you can deduct the cost of repair from their deposit. In this case, landlords must send the remaining deposit alongside an itemized list of deductions.
You should do this by delivering the statement and remaining balance to your tenant, either in person or by mail.
According to Washington's landlord-tenant laws, if you wrongfully withhold the tenant’s deposit, then you may become liable for several penalties, including paying their legal fees as well as twice the original amount.
Is a walk-through inspection necessary in the state of Washington?
This is not required in Washington. However, both the tenant and landlord must sign off on a written checklist detailing the condition of the rental unit prior to the landlord refunding the deposit, so a walkthrough can be helpful for confirming any needed repairs.
Can a landlord withhold a tenant's deposit in Washington?
As a landlord, you can withhold a tenant's deposit. Some valid reasons for doing so include:
• To cover unpaid rent
• If the tenant abandons the unit
• Negligent or careless damage
In your rental agreement, you can list the conditions that necessary for a tenant to have their entire security deposit returned after their tenancy.
In the case of damage to the rental unit, it goes without saying that the damage must exceed normal wear and tear. For instance, a broken dryer due to tenant abuse, broken cabinet doors, and/or deep scuffs in walls and floors.
What if ownership of the rental changes hands?
If the ownership of the rental property changes, the landlord must transfer tenant's deposit to the new landlord. Also, the outgoing landlord must provide a written notice to the tenant informing them of the same information as the previous, including where the money is being stored.
Once the transfer is done, the new landlord then becomes responsible for handling the tenant’s deposit.
Can a tenant use the security deposit as the last month’s rent?
No, security deposits can't be used as last month’s rent unless there is a clause in the lease or rental agreement stating it is okay to do so.
Disclaimer: This blog is only meant for information purposes. If you need more help, or further clarification about the security deposit laws, please consider hiring a reputable Washington property management company or a legal attorney.