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.

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 Washington or with a Washington-licensed escrow agent.

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

Information Provided to Tenant: The landlord/property manager must provide the tenant with a written receipt for 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
• Damage beyond normal wear and tear
• Other charges due under the lease 

Prohibited Deductions: Landlords/property managers may not deduct the following from security deposit funds: 

• Damage resulting from ordinary wear and tear 
• Carpet cleaning (unless the landlord/property manager documents damage to the carpet beyond ordinary wear and tear), 
• The cost of repairing or replacing fixtures, equipment, appliances, and furnishings if the condition of these items was not reasonably documented in the written checklist required by RCW 59.18.260 
• Any amount greater than the cost of repairing or replacing a damaged portion of the rental unit, including any portion of a fixture, appliance, or equipment

Documentation of Deductions: The landlord/property manager must provide the reason 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.

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.

Landlord-Managed Fee Alternative

The Revised Code of Washington § 59.18.670 allows landlords/property managers to offer tenants the option to pay a fee instead of a traditional security deposit. Those landlords/property managers who collect and manage such a fee must comply with detailed statutory requirements governing disclosures, permitted uses of the fee, and procedures for claims and collections. The law also requires landlords/property managers to clearly inform tenants how the fee is used, outline any potential liability at the end of the tenancy, and explain what happens if tenants elect to stop paying the fee.