Security deposit

Key Takeaways

• A Washington landlord may not collect a deposit at all unless the rental agreement is in writing and the tenant receives a signed move-in checklist describing the condition of the unit.
• Deposit money is placed promptly in a trust account at a Washington financial institution or licensed escrow agent, and the tenant gets written notice of where it is held.
• Interest earned on the deposit belongs to the landlord unless the parties agree otherwise in writing.
• The landlord has 30 days after the tenancy ends and the tenant vacates to deliver a full and specific written statement of what is being kept and to refund the balance.

What It Means

A security deposit is money a tenant pays at move-in that the landlord may draw on if the tenant leaves owing rent or leaves damage beyond ordinary wear. It is not a fee, and it is not prepaid rent. In a real sense the money is still the tenant's, which is why the law treats it as funds held for someone else rather than income the landlord is free to spend.

Three things decide how a deposit dispute comes out, and all three happen long before there is a dispute. The first is documentation at move-in: a landlord who never recorded the unit's original condition has no baseline to prove damage against. The second is custody of the money, since deposit funds belong in a Trust Account rather than the operating account. The third is the paperwork at move-out, where a specific written accounting delivered on time matters more than the size of any single deduction.

Deposits also do not cover everything. Wear from ordinary use is a cost of doing business, not a chargeable item, and that line is where most disagreements live. A worn traffic path in a five-year-old carpet is wear. A cigarette burn through it is damage.

How It Works in Washington

Washington's rules sit in the Residential Landlord Tenant Act and they are unusually specific. RCW 59.18.260 provides that no deposit may be collected unless the rental agreement is in writing and the landlord gives the tenant a written checklist or statement at the commencement of the tenancy describing the condition and cleanliness of, or existing damage to, the premises, fixtures, equipment, appliances and furnishings. Landlord and tenant both sign and date it, and the tenant is given a copy. Skip the checklist and the landlord is liable to the tenant for the amount of the deposit.

RCW 59.18.270 controls custody. The deposit is promptly placed in a trust account at a financial institution or a Licensed Escrow Agent located in Washington, and the tenant receives written notice of the name, address and location of the depository and of any later change. Unless the parties agree otherwise in writing, the landlord is entitled to the interest paid on those trust account deposits.

RCW 59.18.280 sets the deadline, and it is the number students get wrong most often. Within 30 days after the rental agreement terminates and the tenant vacates, the landlord must give a full and specific statement of the basis for retaining any of the deposit, with the required documentation, together with payment of any refund due. Miss that without a lawful excuse and the landlord is liable for the full deposit. Where the refusal to refund was intentional, the court may award up to two times the deposit, plus attorney fees and costs.

Example

Renee rents a Tacoma duplex to Sam for $1,950 a month and collects an $1,800 security deposit under a written lease. At move-in they walk the unit together and both sign a checklist noting a stained bedroom carpet and a cracked bathroom tile. Sam keeps a copy. Renee places the $1,800 in her trust account at a Washington credit union and mails Sam written notice of the depository's name and location.

Sam's tenancy ends and he vacates on May 31. The living room carpet, recorded as clean and undamaged on the checklist, now has a burn that costs $450 to repair. Renee's clock runs to June 30, thirty days out. On June 18 she mails Sam a written statement itemizing the $450 repair with the invoice attached, plus a check for $1,350, the balance of the deposit.

Renee charges nothing for the bedroom carpet stain or the cracked tile. Both were documented as pre-existing on the move-in checklist, and that document is what settles the question. Had Renee never provided a checklist, she could not have collected the $1,800 in the first place.

Common Mistakes and Exam Traps

• The Washington deadline for the statement and the refund is 30 days after the tenancy ends and the tenant vacates. Older study material still says 14 or 21 days.
• Interest on the deposit goes to the landlord unless the rental agreement says otherwise, which is the reverse of what most students guess.
• No written move-in checklist means no deposit may be collected, and a landlord who collects one anyway is liable to the tenant for that amount.
• A deposit covers unpaid rent and damage beyond ordinary wear. Wear from everyday use is not chargeable against it.