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 Washington landlords and tenants familiarize themselves with the security deposit law in their state.
Fortunately, Washington’s security deposit laws are pretty straightforward. So, if you are a landlord or tenant in Washington, here’s a summary of the laws you should know of.
1. Maximum Washington 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 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 rental agreement. The Washington landlord is also required to have a written agreement with the renter. A lease agreement is a contract 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 Security Deposits
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 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 with three options for storing a tenant’s 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 tenants security deposits 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 it in a trust account. Such an account must be set up only for the purpose 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
First off, nonrefundable fees are different from nonrefundable deposits. While it’s, 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 rental unit. 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 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
WA landlord-tenant law on refunds, states that once a renter vacates the rental property, a landlord has 21 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 amount 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 deposit amount.
On the other hand, if the tenant chooses to abandon the rental unit, these rules may apply.
7. A Walk-Through Inspection
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 Deposit
A Washington landlord may be able to keep all or part of the renter’s deposit under certain conditions. Common reasons include property damage, unpaid rent, and other lease agreement 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 of 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 regulations is only meant to be informational. If you need more help, please seek professional services from a qualified Washington attorney