Spokane, Washington Security Deposit Law

Although not a requirement by law, most (if not all) landlords in Washington state ask for a security deposit from their tenants.

Usually equivalent to one month's rent, a tenant’s security deposit is meant to cushion landlords against financial damage that may occur in a variety of scenarios. Examples include tenant’s refusal to pay rent, property abandonment, excessive property damage, 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 Washington security deposit laws. The property management at Windermere Property Management have created this article to help landlords get a better understanding of Washington security deposit laws.

How much is a rental deposit in Washington?

In Washington, there is no rental deposit cap. This therefore means that a landlord is free to charge their tenant 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 security deposit law requires that you notify your tenant upon receipt of their security deposit. The notice must state both the deposit amount as well as the name and address of the financial institution holding the money.
If at some point during the tenancy, you transfer the money to a different institution, then you must notify the tenant of the change.
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How should a landlord store a tenant’s security deposit?

Landlords in Washington state have three options when it comes to storing a tenant’s security deposit:

  • One, you can use a trust account. Here, the money should be kept separate and not commingled with other funds.
  • Two,you have the option to keep the money in a financial institution that’s recognized countrywide. Such institutions may include banks, trust companies, and credit unions.
  • Three, you can store the deposit with an escrow agent. In this case, the 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 property unless both parties agree on different terms. If both parties agree on other terms, everything should be documented in writing.

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 a deposit is not considered a non-refundable fee (RCW 59.18.285).

Various states differ on whether landlords should charge nonrefundable fees or not. In Washington, though, the security deposit law allows landlords to charge tenants non-refundable fees. A good example where landlords can require a non-refundable fee is when a tenant has a pet in the property.

For such a fee to be legally binding, you must clearly write it out in the lease or rental agreement. If you fail to do so, then the fee becomes refundable at the end of the lease term.

When do landlords have to return a security deposit in Washington state?

Landlords have 21 days once a tenant has moved out to return their security deposits. 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, you must send the remaining deposit alongside an itemized list of deductions.

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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 law, 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 deposit 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 checklist detailing the condition of the property prior to the landlord refunding the deposit, so a walkthrough can be helpful for confirming any needed repairs.

Can a landlord withhold a security deposit in Washington state?

Yes, a landlord can withhold some or all of a tenant’s security deposit. Some valid reasons for doing so include:
• Nonpayment of rent
• If the tenant abandons the unit
• Negligent or careless property damage
In the case of property damage, 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.
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What if ownership of the property changes hands?

In the event the ownership of the property changes, the landlord must transfer tenant's deposit to the new landlord. The outgoing landlord must also send 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; in Washington, tenants cannot use the deposit as the last month’s rent unless there is an agreement between them and the landlord stating it is okay to do so.

Disclaimer: This blog is only meant for information purposes. If you need more help, please consider hiring a reputable Washington property management company or an attorney.

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