Security deposits in Washington are regulated by Revised Code of Washington § 59.18.010 to § 59.18.670. Certain municipalities may have local laws that supplement state regulations. To ensure full compliance, verify the regulations applicable in your area.

Maximum Security Deposit

Washington state law does not currently limit the amount that landlords/property managers can require as a security deposit.

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Holding & Interest Requirements

Holding Requirements: Security deposits must be held by the landlord/property manager in a trust account at a bank, trust company, savings and loan association, or credit union located in the state of Washington or with an escrow agent licensed in Washington state. 

‍Interest on Deposits: Washington state law does not currently require landlords to pay interest to tenants on security deposits.

Information Provided to Tenant: The landlord/property manager must provide the tenant with a written receipt of the security deposit and a written notice stating the name, address, and location of the account where the security deposit is held. The landlord/property manager must also provide the tenant with a written checklist describing the condition of the rental unit and any existing damage at the beginning of the lease. The checklist must be signed and dated by the landlord/property manager and the tenant, and the tenant must be provided with a copy for their records.

Deposit Refunds

Timeline: Within 30 days of vacancy, the landlord/property manager must either (1) return the full security deposit to the tenant, or (2) provide the tenant with (a) a full and specific statement of the basis for retaining any of the security deposit, (b) supporting documentation, and (c) the balance of the security deposit.

Permissible Deductions: Landlords/property managers may deduct the following from security deposit funds:

• Unpaid rent
• Damages beyond normal wear and tear, including carpet cleaning
• Other charges due under the lease 

Documentation of Deductions: The landlord/property manager must provide the tenant with the basis for retaining any portion of the security deposit, as well as supporting documentation for each deduction. Supporting documentation may include bills, invoices, or receipts (or estimates if the repairs have not yet been performed). If repairs have been performed by the landlord/property manager or one of their employees, the landlord/property manager must include a statement of the time spent performing repairs and the reasonable hourly rate charged.

‍Penalties for Violations: Failure to provide a written checklist at the beginning of the tenancy may result in the landlord/property manager being liable for the full amount of the security deposit, plus attorney’s fees and court costs. Failure to return the security deposit or provide a statement of deductions at the end of the tenancy may result in the landlord/property manager being liable for up to 2x the amount of the security deposit, plus attorney’s fees and court costs if the tenant wins in a lawsuit.

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Sale of the Rental Property

If the property is sold, the landlord/property manager must transfer the security deposit from their trust account to a trust account managed by the new owner. The new owner must promptly notify the tenant of the transfer and the name, address, and location of the trust account in which the security deposit is held.

Security Deposit Alternative Requirements

Fee in Lieu of Security Deposit: If offered by their landlord/property manager, a tenant may agree to pay a fee in lieu of a security deposit. The fee may be a recurring monthly fee, or payable upon any schedule and in any amount that the landlord/property manager and tenant choose, provided that the first month’s fee is a nonrefundable fee. The fee for the remaining months may be entirely or partially nonrefundable, so long as this is disclosed in the lease and separately acknowledged by the tenant.

The landlord/property manager must:

1. Ensure that the fee is strictly optional for the tenant, and that the tenant may instead decide to pay a security deposit at any time;
2. Not consider a prospective tenant’s choice to pay a fee or a traditional deposit in the determination of whether to approve the tenant for occupancy of the rental unit;
3. If offering a fee in lieu of a deposit, offer it to every tenant regardless of income, race, gender, source of income, sexual orientation, immigration status, size of household, or credit score;
4. Allow any tenant who agrees to pay a fee to opt out during the tenancy and pay a traditional security deposit;
5. At the beginning of the tenancy, provide a written checklist to the tenant that describes the condition and cleanliness of or existing damages to the premises; and
6. Provide a disclosure to the tenant as set forth in Revised Code of Washington § 59.18.670(f). 

Purchase of Insurance: The fee paid by the tenant and collected by the landlord/property manager must be utilized to purchase insurance from a lawful insurance company for losses associated with any potential unpaid amounts, including missed rent, fees, or damage to the premises in excess of ordinary wear and tear. The landlord/property manager may not charge a fee that is more than the cost of obtaining and administering such an insurance policy.

In the event the landlord/property manager fails to purchase or maintain insurance, and the tenant pays the fee in lieu of the security deposit as agreed, the landlord/property manager must credit the total cost of the insurance, as stated in the disclosure, to any amount owed by the tenant upon vacating the unit.

Written Agreement: Washington state law does not require the landlord/property manager and the tenant to enter into a separate written agreement when a tenant agrees to pay a fee in lieu of a security deposit. However, if the landlord/property manager decides to discontinue the fee option, they must:

1. Provide 60 days’ notice to the tenant;
2. Reduce the security deposit by the amount of a tenant’s previous fee payments; and
3. Offer the tenant an installment plan to pay any remaining balance of the security deposit over three months.

Collection Activity: The landlord/property manager may not send an invoice to a tenant or undertake collections activity after submitting a claim to their insurance company if: 

1. The insurance company approved the claim;
2. The insurance company denied the claim because it was not a loss under the lease; or
3. The insurance company denied the claim because the landlord/property manager submitted insufficient documentation or proof to substantiate the claim. 

The landlord/property manager may send an invoice or undertake collections activity against the tenant if the insurance company determines that a claim is not covered by the insurance policy. Before beginning such collection activity, the landlord/property manager must:

1. Notify the tenant of damages or any unpaid rent/fees in a manner consistent with Revised Code of Washington § 59.18.280;
2. Forward to the tenant documentation substantiating the damages; and
3. Not undertake any collections activity until 60 days after notifying the tenant and providing the documentation set forth above, whichever is later.

The landlord/property manager may not seek reimbursement from the tenant for amounts that the insurance company already paid them.