RCW 59.18.260 states that a deposit may not be collected from a tenant unless the rental agreement and the terms and conditions for the retention of the deposit are stated in writing. What this means is that a landlord must state the terms by which a deposit may be retained. Failure to state the terms may mean that the landlord is required to return the full deposit and sue the tenant in another venue for any damages caused.
RCW 59.19.260 requires a landlord to provide a written checklist to the tenant at the commencement of the tenancy in order to collect a deposit. The checklist must specifically describe the condition of the property at the beginning of the tenancy, "including, but not limited to, walls, floors, countertops, carpets, drapes, furniture, and appliances." This checklist must be signed and dated by BOTH the landlord and the tenant.
Failure to provide a signed and dated checklist means the landlord has improperly collected a deposit and may be required to return the full deposit at the conclusion of the tenancy.
Receipts and Trust Accounts
If a landlord chooses to utilize the advantages of collecting a deposit, the landlord must provide a receipt to the tenant for the deposit. Futhermore the landlord must deposit the funds into a trust account (separate bank account) or escrow account. The landlord is NOT allowed to deposit these funds into his/her own personal account. These funds are not the landlords, they are allowed to be held by the landlord in a separate account in case the tenant causes damages in the future. Furthermore, the landlord must provide the name of the bank in which the funds are deposited and the location of that bank. If the bank where the funds are held changes, the landlord must notify the tenant of the new location and name of the bank.
The landlord may be allowed to retain the interest of the funds deposited in the trust account.
Retaining Deposit funds
At the conclusion of the tenancy, the landlord must either provide the tenant with the full deposit, or a statement indicating why all or a portion of the deposit has been retained. The statement must be full and specific and may not include retention of any monies for normal wear and tear.
The statement or deposit must be in writing (email does should not count, phone calls do not count) and deposited in the US Mail within 14 calendar days of the conclusion of the tenancy. Failure follow the time limits means the landlord must return the full amount of the deposit collected. If a court finds that a landlord intentionally withheld the deposit, the court may award double the deposit back to the tenant. If the tenant must hire an attorney to regain the deposit funds, the landlord may also be liable for the tenants reasonable attorney fees and costs of suit.
What happens if I collected a deposit illegally?
If a landlord collects a deposit illegally, he/she may be required to return the full deposit to the tenant. This does not preclude the landlord from seeking reimbursement from the tenant in another forum, but simply does not allow the landlord hold the security deposit.
The rational behind a security deposit is that the funds are given into the landlords control, in trust, in the instance that the tenant causes damage to the property or the landlords interest in the property. This is a huge advantage to the landlord because he/she does not have to resort to legal action to be reimbursed for damages caused by a tenant. One the other hand, the rules for collecting a deposit are strict because they allow this advantage to the landlord. Failure to follow the rules for collecting a deposit means the landlord has lost the right to benefit from the deposit and must instead resort to alternative legal action to be reimbursed for property damage.
Additional resources provided by the author
The deposit statutes are located in RCW 59.18.26-290
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