7 Real Estate Professionals an Investor Can’t Live Without

7 Real Estate Professionals an Investor Can’t Live Without

If you invest your money in the right property, in the right place, and at the right time you can end up with a lucrative real estate investment. In fact, real estate investments have produced more wealth than any other industry investments.

However, just like any type of business, it has its challenges. Managing tenants in Seattle isn’t easy. There’s a lot for one person to handle, especially if you are a new landlord.

To succeed, it helps to have a team of real estate professionals by your side. A general contractor, for example, can help you keep your property in top-notch condition. A real estate lawyer can help you solve legal problems. In addition to this, a property manager can help you secure reliable tenants as well as manage them.

Forming ongoing relationships with real estate professionals can guarantee success in managing your Seattle investment property.

 

1.   Property Manager

Property managers can handle a myriad of responsibilities. For example, rent collection, lease termination, lease negotiations, property inspections, and maintenance issues.

They also make sure that each property is in compliance with all safety laws and property codes.

To determine whether a property manager is right for you, ask yourself the following questions:

  • Do you have the time to stay up-to-date on Seattle’s landlord-tenant laws?
  • Do you keep comprehensive and accurate records?
  • Do you know how to perform thorough and efficient screenings on potential tenants?
  • Are you willing to be on-call 24/7?
  • Are you ready to handle troubled renters?

business-real-estate-accountant

 

2.   Property Inspector

Regular property inspections can help you enforce your lease and protect your rental property. Generally, inspectors will look for things like:

  • Any exterior damage including the property’s structure and landscaping
  • Internal damage beyond normal wear-and-tear
  • Additional occupants
  • Items needing repair
  • Proper tenant maintenance
  • Illegal activities

Normally, there are four types of property inspections: move-in, move-out, seasonal and drive-by inspections.

 

3.   Real Estate Appraiser

A property appraiser estimates the value of your real estate for insurance, development, financing, sales and tax purposes. They construct an opinion based on the prices of similar surrounding properties and the environment in which your property is located.

If you are planning a project aimed at improving the value of your Seattle property, the appraiser’s impartial eye can be beneficial.

During the appraisal, be sure that you are available for any questions they might have. It’s important that they have access to all utilities because making their job easier can help your property get a good report.

 

4.   Real Estate Agent

Finding renters for your Seattle rental property can be time-consuming and stressful. A good agent is well-versed with the local market and knows how to market a property to the right tenant pool.

Besides filling vacant properties, agents can also help you set prices. You can also trust a good agent to show your properties and handle phone calls.

 

5.   Real Estate Lawyer

Conflicts between landlords and tenants in Seattle are common. Common causes of disputes include, but are not limited to:

  • Cost of cleaning and repairs. When a renter moves out, the Seattle lease agreement usually requires that he or she return the property in its initial condition. Failure to do so and the landlord reserves the right to make the appropriate deductions from the security deposit. Dispute commonly arise over the cost for these deductions.
  • Property maintenance. Having a properly maintained rental is a tenant’s right and a landlord’s duty. Disputes can arise when the landlord takes too long to resolve maintenance issues.
  • Property damage. Property damage is undoubtedly one of the main causes of landlord-tenant issues. A dispute may arise when a renter causes excessive property damage.

With a good real estate lawyer at your side any landlord-tenant dilemma will be handled smoothly and according to Seattle’s rental law.

woman-property-manager-seattle

 

6.   Certified Public Accountant

Keeping track of paperwork is difficult. However, it’s a necessity, and it can cause problems for those who are unprepared and disorganized. This is especially true at tax time.

A good accountant will ensure that your files are orderly and your tax returns are accurate. In addition, a competent accountant can help you claim your tax deductions. As a Seattle landlord, you can claim tax deductions on:

  • Legal and professional services. You can deduct the fees you pay real estate investment advisors, property management companies, accountants, attorneys, and other professionals.
  • You can deduct the premiums you pay for almost any insurance for your rental property. This includes landlord liability insurance, as well as flood, theft, and fire insurance.
  • Home office. Provided you meet certain requirements, you can deduct your home office expenses from your taxable income.
  • Seattle landlords are also entitled to a tax deduction for most of the driving they do in order to manage their rentals.
  • Property repairs. Good examples of taxable repairs include replacing broken windows, plastering, fixing leaks, fixing floors or gutters, and repainting.

Every year, millions of landlords pay more taxes on their rental income than they have to. Why? Because they fail to take advantage of such tax deductions. Having a certified accountant by your side can help you maximize your income and cut losses.

rental-property-tax

 

7.   Property and Casualty Insurance Agent

Seattle landlords need more than just regular homeowners insurance. They require insurance against lawsuits, accidents, and natural disasters.

A good agent ensures that you are well protected from common mishaps – such as damage from rain and wind – as well as less occurring ones, like flooding.

 

To sum it up, these are 7 real estate professionals in Seattle, Washington that you can’t live without. They will help ensure your business has a decent cash flow while making sure your tenants live in comfortable and safe premises.

Top 5 Questions to Ask Potential Seattle Tenants [and What Not to Ask]

Top 5 Questions to Ask Potential Seattle Tenants [and What Not to Ask]

It’s every landlord’s dream to get a good tenant. A good tenant is drama-free, clean, honest, creditworthy, respectful, responsible, and above everything else, is able to pay rent without issues.

Getting a good Seattle tenant is not easily a walk in the park. As a landlord looking for a new tenant, you need to do a lot. You need to verify the prospective renter’s creditworthiness, check their criminal and rental history, and more. Needless to say, the tenant verification process can be rather time-consuming.

To save time, you need to ask the right questions. The right questions will help screen the good renters from the bad immediately. In this article, we’ll discuss 5 questions landlords can ask potential tenants as well as questions landlords cannot ask.

 

5 Good Questions to Ask Prospective Seattle Tenants

1.  “What’s your reason for moving?”

Tenants may want to move for various reasons. For example:

  • Moving due to changes in their relationship status.

Those getting married may be looking to move to a larger place, while those undergoing a separation or divorce may be looking to downsize.

  • Moving because they want to be located in a different neighborhood.

They may want to switch school districts, want to experience a new location or they may feel their current neighborhood has become unsafe.

  • Moving due to issues with neighbors.

For whatever reason, they may feel unsafe around a neighbor or may have noise complaints.

  • Tenants may move due to maintenance issues.

They may be tired of dealing with pest problems, leaky roofs, or clogged drains.

  • A renter might have to move because they are dealing with a job relocation.
  • If a tenant is looking for more space or less space they may also choose to move.

When asking this question to potential renters, you want to look for legitimate reasons for moving. Watch out for things like moving because of an eviction. A renter who has broken a lease term once is likely to do it again.

 

2.  “When do you want to move in?”

This is another question that you need to ask your potential Seattle tenants. It will help you learn more about them. Since most landlords require a 30-days’ notice to end a tenancy, a prospective tenant wishing to move in immediately may signal something suspicious.

That being said, there are certain situations that can cause a tenant to move in a hurry. For example, domestic abuse, a sudden job transfer, or a pay cut.

Otherwise, always look for someone who starts their search at least a month before moving in. Such tenants are likely to be responsible.

 

3.  “How much money do you make every month?”

When screening tenants, one important thing to look for is the tenant’s income. The income will show you whether or not the tenant will be able to pay rent without issues.

Generally, look for a renter whose income is at least thrice the monthly rent. That is, look for a person who is making no less than $3,000 a month if the monthly rent is $1,000.

Checking the renter’s income is, however, half the story. You will need to also check how much debt they have. To get such details, you need to run a credit check on them. This will, however, require the renter’s consent.

 

4.  “Will you be able to pay the first month’s rent and security deposit upon move-in?”

In general, before exchanging keys, you should make sure that you have received the full first month’s rent and security deposit, as well as any other fees. A good example of a fee is a pet deposit fee.

When screening potential Seattle tenants, always make sure they have enough money up front to cover all initial fees. If a tenant seems hesitant to make a commitment, chances are their financial situation isn’t good.

Such a tenant is likely to cause problems if you permit them to move in and then pay the money later.

 

5.  “Do you currently have pets?”

Last but not the least in the rental questionnaire, ask the tenant whether they currently have pets. This can be a huge time saver. This is because if you have a “no pet” policy, it will immediately disqualify such a tenant.

However, if you allow pets, make sure they agree with your policies. Such policies may have guidelines that dictate the type, size, and weight of the pet allowed. Also, make sure they know the repercussions of not adhering to the policies imposed upon the rental or lease agreement.

For example, let them know that they risk being fined or even being evicted if they act contrary to the rules.

 

Questions Landlords Cannot Ask Potential Seattle Tenants

As a landlord, there are also certain questions that are illegal to ask potential tenants. Generally speaking, these are questions that that touch on Fair Housing Rules. The Fair Housing Act is a federal act in the U.S. that shields tenants from housing discrimination.

Simply put, the Act prohibits discrimination based on certain specific characteristics. In Washington State, for example, such characteristics include disability, familial status, national origin, sex, religion, color, race, sexual orientation, marital status, or gender identity.

Essentially, what this means is that you can’t ask potential Seattle tenants questions such as the following:

  • “Are you gay, divorced, or married?”

    This is a question that touches on the renter’s familial status. Familial status is a protected class under the Federal Fair Housing Act.

  • “What is your first language?” or, “Where were your parents born?”

    Both questions are discriminative as they seek to know the renter’s national origin.

  • “Do you think you would fit in? There aren’t a lot of temples around here.”

    This question assumes a tenants spiritual and religious beliefs. Under the Federal Fair Housing Act, a tenant’s religion should be none of your business.

  • “Your skin is dark. Are you sure that you’d feel comfortable around here?”

    You shouldn’t use a tenant’s color as a qualifying standard. It’s illegal.

Besides the Federal Fair Housing Act, it is illegal to ask a prospective tenant whether they have ever been arrested or not. You could, however, ask them whether they have been convicted of a crime.

Also, make sure you are up to date on the Washington State landlord-tenant law before carrying out any tenant screening questions.

 

Asking the right questions to prospective tenants will improve your chances of landing a good tenant for your Seattle rental property. On the other hand, asking the wrong questions can land you in legal hot soup. Hopefully, with this guide, you will be able to do the right thing and prepare you for questions to ask possible renters.

How to Raise Rent on Your Seattle Rental Property

How to Raise Rent on Your Seattle Rental Property

Have you ever asked your boss for a raise?

Have you brokered a deal with a big client?

If you have, then you may already know that it’s no easy task. Raising the rent on your tenants can seem just as difficult.

Increasing the monthly rent on your Seattle rental property is something that you will inevitably experience. For the process to be successful, planning is key. It isn’t uncommon for complaints to arise after you have raised your property’s rent. No one likes to be charged more for the “same” thing.

There are many reasons that might prompt you to raise the rent. In Seattle, common reasons include:

  • Expenses on your property have increased

If your regular monthly expenses have increased, you definitely need to increase your rental fee. Such expenses include mortgage payment, property management fees, Homeowner Association (HOA) dues, insurance, and property taxes.

Did you spend money-adding backsplashes, installing wood flooring, replacing doors, adding a fresh coat of paint, or replacing cabinet doors? Or, are you planning to make some major upgrades? If so, it is a justification to raise the rent.

  • Comparable rents have gone up

Are rental fees rising all around you? If so, then you should too.

  • The current lease term has ended

Even if you don’t have any justification to raise the rent, you should always remember to raise the rent at the end of the current lease term. Most tenants expect the rent to increase slightly at every lease renewal time of say $20 to $50 or so. However, if you raise it to say $250 after not having raised it for 5 years, it’s likely that you will get complaints. Generally, you should increase the rent by about 3% to 5% each year.

Understanding When to Raise Rent

As already mentioned, always raise the rent at the end of every lease term, whether it is tied to a lease renewal or to a renter moving out. Conduct a comparative market analysis to understand what similar properties are charging.

Then, factor in other distinguishing factors that your property may have. This will ensure that you get the right Return of Investment (ROI) on your asset.

However, leave room for negotiation with your current tenant, especially if they are good. As a Seattle landlord, you certainly know that finding good tenants isn’t an easy walk in the park.

 

If the tenant is good, also consider the following two things:

  • Check if the rental fees for similar properties in your neighborhood have increased, but only minimally. If so, you have the option to price your competition out of the market by simply not raising the rent.
  • Whether other properties are providing promotions and incentives to prospective tenants. If they are significant, the competition could be really tough.

On the other hand, if rental fees have significantly gone up, your renters will likely expect – and accept – a reasonable rent raise. If you do lose them, it may be possible to get new ones at a nice rent increase.

 

Calculating the Rent Increase

When you have considered raising the rental fee, the next question is, how much should you raise the rent?

The answer is – it depends.

According to a market report, rents increased by 12.5% from 2011 to 2016. But, markets vary dramatically, even within the same metropolis. That is why it pays to analyze the market prior to raising the rent.

You could hire a local real estate agent to help you in this regard. Or, you could choose to perform a comparative market analysis yourself.

Charging the right rent will attract the best, most qualified number of prospective tenants. That means stable income and low turnover costs. On the other hand, charging a lower rent can mean leaving money on the table, and charging a higher rent can mean a longer vacancy period.

Your goal should be to remain as competitive as possible. Generally speaking, you should raise the rent by around 3% to 5% every year. Of course, you should also factor in market forces.

When calculating the amount to increase the rent by, consider the following things:

  • Your cash flow.

Cash flow matters. In fact, it’s likely the reason you became a landlord. When you are making money from your Seattle rental property, it means that your cash flow is positive. This essentially means that your investment is profitable.

  • Similar properties in your area.

Have rentals similar to yours charging more? If they are, increase your cost as well.

  • Seattle local housing laws.

Generally, landlords must give their tenants a 30-day notice prior to raising their rental fee. In Seattle, however, the notice period depends on the rent increase amount.

If the rent increase is less than 10%, then you need to give your tenant the normal 30-day notice. However, for a rent increase exceeding 10%, then you need to give your tenant a 60-day notice.

 

Compliance with Seattle Fair Housing Rules

As with all aspects of being a landlord, ensure you are compliant with Seattle discrimination laws.

Check Out: http://tsquareproperties.net/overview-of-the-landlord-tenant-laws-in-washington-state 

 

In Seattle, protected classes include:

  • Military status
  • Use of a service animal
  • Sexual orientation
  • Sex
  • Religion
  • Race
  • Political ideology
  • Parental status
  • National Origin
  • Marital Status
  • Gender Identity
  • Disability
  • Creed
  • Color
  • Breastfeeding in a public place
  • Ancestry
  • Age

Essentially, you should not increase rental fees based on a tenant characteristic. For example, it is discriminative to raise the rent on tenants of a certain familial status or race. Likewise, you cannot increase the rent to punish a tenant that complained to the city about your inability to make needed repairs.

In Seattle, you are restricted from raising rent for a set period if your tenant has:

  • Been involved in a tenant’s organization
  • Filed an official complaint to a government authority
  • Or, has exercised a legal right

If you raise the rent after the tenant has done any of the above, a court may assume it’s a retaliatory act.

 

Informing Your Tenant of the Rent Raise

Make the communication as clear and professional as possible. Also, don’t leave any room for confusion, argument, or negotiation. The best way to inform your tenant is through a written notice.

No tenant will appreciate a rent increase. But, if you make the process structured, you will likely get through it will less backlash. With a little bit of luck, this article will help you achieve just that.

5 Tips for Managing Your Rental Properties

5 Tips for Managing Your Rental Properties

How you manage your properties is going to either make or break your chances for success. If managed properly, a rental property can help you on the path to a successful financial future. However, if incorrectly managed, it will fall into shambles.

Here are five tips to make your investment a success.

1.   Pay your taxes.

To have a successful investment property, you need to meet your tax obligations.

Because it is a property, there are many deductions involving depreciation that you are allowed to take. And, since it’s a business, you can often deduct home office expenses as well.

If you aren’t skilled in investment property tax law, it’s in your best interest to hire an accountant. The accountant will help you adhere to IRS requirements with regards to property deductions and other legalities.

2.   Consider hiring a property manager.

A landlord’s job is a tough one, no doubt. It can be overwhelming and time-consuming. To solve this problem, think about hiring a property manager.

A competent property manager will handle all property details for you. They will thoroughly vet all rental applicants and place the best ones on your property. They will ensure your property is in its best condition at all times.

And above all, they will be your no-nonsense rent collector and will take immediate action when rent is late.

A property manager can do as much or as little as you want. They can handle everything if you want. Or, they can handle specific tasks only.

Hiring a property manager is an important decision. As such, you want to weigh the financial benefits and challenges of doing so. Bear in mind that choosing the right manager is also important. So screen them, just as you would potential renters.

3.   Follow the law.

Every US state has a law that guides the relationship between landlords and tenants. Understanding it is key to your success as a landlord.

For instance, by following your state-specific law, you are able to understand all matters regarding a tenant’s security deposits. It will guide you on how much to collect, how to store it, and when to return it among other things.

The law will also guide you on how to handle lease violations.

Aside from understanding the statewide landlord-tenant law, you also need to be familiar with local laws as well.

4.   Keep the tenant turnover low.

A low tenant turnover is another contributor to property success. A high tenant turnover means a greater expense for the property owner. The expense is generally in the form of advertising, redecorating, and uncollected rents.

A low tenant turnover, on the contrary, means you won’t have to constantly spend money to attract new tenants. This is because your tenants will be renting for longer periods. For tenants to rent longer, it means that they are satisfied with their quality of living.

There are simple things you can do to maintain a low tenant turnover. You can begin by finding and placing high-quality tenants in your properties. This means having a thorough tenant screening process in place.

Secondly, you can ensure you respond to maintenance and repair requests promptly. Tenants hate landlords who don’t respond to or who blow off complaints.

Thirdly, you can ask for referrals from your existing tenants. If you already have a few great tenants, you can ask them to refer their friends.

5.   Keep up with maintenance and inspections.

Keeping up with tenants’ maintenance requests is the key to your success. It is important for two reasons. First, if your property isn’t maintained, you will have a hard time finding and keeping quality tenants.

Think about it. Would long-term, quality tenants want to rent a property that does not meet their high expectations? Of course not!

Second, the landlord-tenant law obligates you to ensure your property meets certain standards. Specifically, it must meet the basic safety and health standards. No tenant would want to live in a property with constant plumbing issues or one that is infested with pests.

Keeping up with property inspections is also key to your success as a rental property owner. Property inspections will give you a great opportunity to document lease violations at your property or unreported damage.

Whether you hire professionals or do it yourself, there are different types of rental property inspections. They include:

  • Move-In Inspection. This will help you document the property’s condition prior to the new tenant moving in.
  • Move-Out Inspection. This will help you document the property’s condition at the end of their tenancy.
  • Seasonal Inspection. This will help you address the myriad of maintenance challenges that each season brings.
  • Drive-By Inspection. This will allow you to simply pass by your property at any time and check the exterior condition of the property. Unlike the others, it doesn’t require coordinating with the tenants.

There you have it, 5 top tips for managing your rental properties. Remember, you can choose to be completely hands-on, or you can choose to outsource everything to a property manager.

Hiring a Property Manager vs. Self-Managing: What’s Better?

Hiring a Property Manager vs. Self-Managing: What’s Better?

As a landlord, one of the biggest decisions you’ll make is whether you should self-manage or hire a property manager.

When you invest in rental properties, the key is to make sure that every aspect of the business is handled efficiently. Therefore, making the right decision is important.

Decision making isn’t easy. That is why today we’ll compare the advantages of each to help you make the right choice.

 

Benefits of Working with a Professional Property Management Company

There are many benefits when working with a professional property management company. Some of them are:

  • Proper legal backing

Property management companies are in the business of dealing with all rental property related matters, including legal issues. When a tenant fails to pay rent or causes excessive property damage, you may need to take your tenant to court. A management company will handle this for you.

  • Money management

By being directly involved in your property’s financial activities, you can rest assured the finances are in order.

  • Better and wider networking

Property management companies know the ins-and-outs of the rental property business. They have social connections that enable them to get better pricing on services, contractors, and materials.

  • Minimal vacancies

The right property management company will advertise your rentals aggressively across many platforms. With plenty of exposure, you have the opportunity to place top-notch tenants in your property.

  • Timesaving

Employing a property management company will free up your time to do the things you enjoy. You’ll be free of countless hours normally spent marketing vacant properties, annual inspections, or late-night emergency repairs.

  • Fluid infrastructures

Property management companies come as an all-in-one management package. They will help you with tenant screening, rent collection, and even eviction procedures.

 

Benefits of Self-Managing a Property

If you choose to manage your rental properties yourself, keep in mind there’s a lot of work to be done. This doesn’t, however, mean that there aren’t a host of benefits to gain while managing your own rentals.

Self-managing your rental properties will help you:

•    Avoid victimizing yourself

Sadly, not every management company is run ethically. Some engage in unsavory activities such as pocket rent from “vacant units” or receive kickbacks from contractors.

While chances of this happening are slim, doing your thorough research beforehand is necessary.

•    Direct involvement in day-to-day decisions and activities

You’ll have control over things like how to collect the rent from each of your tenants, which contractors to hire for maintenance issues, and where to advertise your vacant rentals.

Making the right decisions will require you to be well-versed in matters regarding rental properties. For example, conducting background checks, evicting problem tenants, and legal knowledge regarding local landlord-tenant laws.

•    Save on management fees

Generally, management companies will charge you 10% for their services. This is an expense that you can save by managing the property yourself.

However, you’ll be left to handle all expenses related to leasing your rental property. For example, legal matters, property upkeep and maintenance, tenant-screening services, and advertisement fees. All these tasks can seem overwhelming.

Ultimately, you may end up spending more by managing the property yourself despite saving on a monthly management fee.

 

Becoming Your Own Property Manager

If you choose to manage the property yourself, make sure you are familiar with fair housing rules and landlord-tenant law.

Fair housing rules are straightforward. The rules make it illegal to discriminate against a tenant based on certain protected characteristics.

Generally, such protected characteristics include sex, familial status, gender, national origin, disability or race.

In addition, you also need to be knowledgeable when it comes to creating important documents such as the rental application form and the lease or rental agreement.

You’ll also want to come up with certain policies. For instance, whether you accept roommates and pets, when late fees will apply, and when to file for an eviction.

 

Hiring a Property Manager

Use caution if you decide to use a management company. To better your chances of getting the right manager, you could:

  • Look up professional directories on the internet. Visit the National Association of Residential Property Managers (NARPM) website and click “Property Managers. Or visit the website of the Institute of Real Estate Management (IREM) and click “Find a Professional.”
  • You could also get recommendations from colleagues and your local apartment association.

Regardless of which method you use, vetting them before hiring them is critical. Preferably, ask them specific questions. Such questions may include:

  • How long they’ve been in business? Ideally, choose a company that has been in operation for more than five years.
  • How do they handle maintenance requests?
  • What is their average occupancy length? Preferably, you want to have most tenants renew their lease, or at a minimum stay for the full lease term.
  • What is their average owner retention rate? Shoot for companies with above 97% owner retention rate.
  • What percent of the security deposit do they usually refund? The percentage should be high. Otherwise, it may indicate a problem with their tenant screening process.
  • What is their average eviction rate? A vacancy rate for a good management company should not exceed five percent.
  • What percentage of their tenants renew their leases? Usually, the lease renewal rate for a good property manager will be eighty percent or higher.
  • Do they guarantee occupancy? If the manager can’t guarantee tenants will stick around for a certain period, chances are that their screening process is flawed.
  • What is their rental marketing strategy? Marketing has now moved past classified newspaper ads and road signs. Nowadays, people consume most of their content online. Look for a management company that makes use of SEO, PPC, email and social media marketing strategies among others.

 

Each option has plenty of benefits that will help you succeed in the rental property business. Ultimately, the decision to hire a property management company or self-manage your rental property is largely a personal one.

Whichever route you choose, make sure you have a diligently executed plan.

Security Deposit Laws in Washington State

Security Deposit Laws in Washington State

Majority of the lease and rental agreements in Washington State need a security deposit. Typically a month’s rent, security deposits help cushion landlords against property damage in excess of normal wear and tear.

Security deposits are often a source of friction between tenants and landlords. To help prevent issues when returning it, it’s important that both landlords and tenants familiarize themselves with the security deposit laws in their state.

Fortunately, Washington security deposit laws are pretty straightforward. So, if you are a landlord or renter in Washington, here’s a summary of the security deposit laws you should know of.

 

1.   Maximum Security Deposit Amount

The Washington rental laws don’t limit the amount a landlord can ask a renter as a security deposit. This means that a landlord is free to charge whatever amount he or she sees fit. You should, however, check to see if there are any local laws that define the statutory limit on security deposits.

 

2.   Requirements For Collecting a Security Deposits

Before collecting a tenant’s security deposit, a landlord in Washington must do the following:

  • Include a written checklist. The purpose of a checklist is to document the property’s condition before a new renter moves in. After the documentation, each party must sign it.

In Washington State, if a landlord fails to include this written checklist, the landlord might be required to return the entire security deposit amount to the tenant in addition to other penalties.

  • Have a written lease or rental agreement. The Washington landlord is also required to have a written agreement with the renter. A lease is a contractual agreement between a landlord and a renter. It stipulates landlord and tenant rights and responsibilities, as well as other conditions.

Among these conditions are reasons the landlord can withhold all or a portion of a renter’s security deposit. Just like the checklist, it must be signed by both parties.

 

3.   Requirements After Collecting a Security Deposits

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Washington landlords must provide the tenant with written notice after collecting and depositing their security deposit. The notice must include two things. The name and address of the institution where the deposit is being held. As well as a written receipt stating the security deposit amount.

If for whatever reason the landlord moves the security deposit to another institution during an existing tenancy, the landlord must again provide the renter with a written notice containing the name and address of the new institution.

 

4.   Storing a Tenant’s Security Deposit in Washington State

The Washington State landlord-tenant law provides landlords three options for storing a tenant’s security deposit. In the first option, the landlord can keep a tenant’s security deposit with an escrow agent. The agent must be licensed and located within Washington State.

As a second option, landlords can keep a tenant’s security deposit in a nationally recognized financial institution. Examples of such financial institutions include credit unions, loans and savings associations, trust companies and banks.

In the third option, landlords can keep the deposit in a trust account. Such an account must be set up only for the purposes of storing the security deposits of the renter.

If the account is interest bearing, the interest is payable to the landlord by default. However, different terms can apply if both the renter and landlord agree. The agreement reached should be in writing.

 

5.   Nonrefundable Fees

bedroom-bed-pillow-painting-window-tv

First off, nonrefundable fees are different from nonrefundable deposits. While a deposit is, by definition, refundable, the nonrefundable fee is usually a surcharge on top of the initial security deposit.

Washington landlords can charge renters nonrefundable fees. An example of a nonrefundable fee could be a charge for having a pet on the property. To charge a nonrefundable fee, the landlord must include it in a lease or rental agreement. It should be in writing.

Furthermore, these fees must clearly be spelled out in the lease or rental agreement as nonrefundable. A nonrefundable fee may be reimbursed back to the renter in either of these situations. One, if it’s not clearly listed as nonrefundable in the lease or rental agreement. And two, if the landlord and renter don’t have a written lease or rental agreement.

 

6.   Returning a Tenant’s Security Deposit in Washington

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WA landlord-tenant law on deposit refunds, states that once a renter vacates the rental property, a landlord has 14 days to return the renter’s deposit. The deposit returned may be whole or partial. If a partial deposit is returned, the landlord must explain the deductions as well as their costs to the tenant in a security deposit return letter.

The landlord must then send the notice alongside the remaining security deposit to the tenant. There are various ways in which a landlord can deliver the deposit and statement to the renter.

First, by hand delivering it to the tenant’s last known address. Second, by meeting up with the past tenant and personally delivering it. And third, by mailing the documents via the United States first-class mail service.

Failure by the landlord to follow these rules may attract penalties. In addition to paying for the tenant’s court costs and attorney fees, the landlord may be liable for paying the tenant up to twice the security deposit amount.

On the other hand, if the tenant chooses to abandon the property, these rules may apply.

 

7.   A Walk-Through Inspection

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Before a renter’s move-out in the state of Washington, a walk-through inspection isn’t required. That being said, both the landlord and tenant must sign off on a checklist detailing the property’s condition before a renter’s security deposit is collected.

 

8.   Reasons to Keep a Tenant’s Security Deposit

A Washington landlord may be able to keep all or part of the renter’s security deposit in certain conditions. Common reasons include property damage, unpaid rent, and other lease violations. The property damage must be in excess of normal wear and tear.

 

9.   Change in Washington Property Ownership

In the event the property changes hands, the outgoing landlord must hand over all tenants’ deposits to the incoming landlord. The outgoing landlord must also inform the tenant with the Change of Management/Ownership notice. After the transfer, the incoming landlord then becomes responsible for the resident’s security deposits.

 

This overview of the Washington security deposit laws is only meant to be informational. If you need more help, please seek professional services from a qualified Washington attorney