Security Deposit Laws in the State of Washington

Security deposits are essentially a form of financial insurance for the property owner, but tenants do expect this money back at the end of their lease. Tensions can run high when disputes about security deposits come up, and you will need to know where you stand legally.  Take a look at some of the landlord-tenant laws in the state of Washington that can affect how you handle a tenant’s security deposit as a landlord.

You Can Determine Your Security Deposit Amount 

For properties located in the city of Seattle a landlord cannot charge an amount more than one month’s rent, and must allow the tenant up to six months to finance their security deposit.   However, in the rest of Washington, how much a landlord charges for a security deposit is at their discretion. Typically you do not see deposits less than the amount of one month’s rent.  A professional property manager will have knowledge of the current trends and market conditions and will try to stick close to the norm so you don’t scare away prospective renters with exorbitant deposit requests.

The Security Deposit Must Be Held in an Account 

When the security deposit is collected, that money is to be held in a legitimate account by the landlord and make sure you name the institution in the lease agreement.  This ensures there is no question that the security deposit is actually going to be held for its stated purpose.

You Must Return the Security Deposit in a Timely Manner 

Washington state law states that the deposit has to be returned within 21 days of the tenant moving out.  If you do not return the security deposit, your tenant does have the right to take you to court to get their money back.  It’s important to note a court can double the amount of the deposit as a penalty if they found you acted willfully.

In order to make any claim for a security deposit you must have conducted a written move in inspection.  Without that you can make no claim on a security deposit no matter how much damage was done.  You can always sue for damages beyond the deposit in those situations, but the certainty that funds are available in the form of a deposit is a huge plus and why we require deposits in the first place.

You may be able to keep the tenant’s security deposit if:

  • They have caused damage to the property beyond normal wear and tear.
  • They have unpaid rent at the time they vacated the property
  • They broke the lease agreement in another way (i.e. the tenant moved out before the lease term)

When the process is carried out properly, charging a security deposit helps protect your property and your business investments.  You must provide the tenant with a specific written list of damages within the 21 day period.  If the amount of the deposit exceeds the damages you must return that portion of the deposit that is not disputed within that period. You need to understand what “normal wear and tear is” and can only charge for what you actually repair.  For example you cannot charge a tenant for scratching the hardwood floors if you don’t repair them.

As you can see there are more than a few potential traps unwary property owner trying to go it alone. Work with a property management company to make sure security deposits are properly handled. Reach out to us at MacPherson’s Property Management, Inc., to find out how we can help you handle payment and deposit collection. We will help you work successfully with your tenants.