Summer 2023 - Property Management Q & A
Question:
I just heard that the process for doing security deposit accountings changed again. What is going on? I still think we have 14 days to do an accounting, and that it changed to 21 days a while back. Now it is 30 days? What am I missing?
Answer:
While not the most pressing issue in landlord-tenant relations, the issues involving security deposits are certainly the most common friction point between tenants and owners/managers. Look at the docket in any small claims court and I think you will find that a very large plurality of cases involves disputes over security deposits.
Back in 2016 landlords (the term includes both others and property managers) achieved one of their few successes in the legislature when they successfully increased the deadline to send a security deposit accounting to a former tenant from 14 days to 21 days. What you have to understand about the 2016 legislation is that it was a response to a court of appeals case which greatly limited the use of estimates in preparing deposit accountings. The legislature recognized that 14 days was just too short a timeframe to mail an accounting to the tenant’s “last known address” if the use of estimates was going to be restricted.
The 2023 legislative session resulted in some pretty comprehensive changes to the process both for collecting and accounting for security deposits.
First, the legislature adopted a definition of what had previously been referred to as “wear and tear.” RCW 59.18.030(39) now contains the following definition, ““Wear resulting from ordinary use of the premises” means deterioration that results from the intended use of a dwelling unit, including breakage or malfunction due to age or deteriorated condition. Such wear does not include deterioration that results from negligence, carelessness, accident, or abuse of the premises, fixtures, equipment, appliances, or furnishings by the tenant, immediate family member, occupant, or guest.”
Second RCW 59.18.260(2) was substantially revised to change the minimum contents of a move-in inspection checklist. Lastly, getting to your question, RCW 59.18.280 governing deposit accounting was changed. As you correctly mention, the deadline to mail the statement “United States mail properly addressed to the tenant’s last known address with first-class postage prepaid” was increased to 30 days. But with the “quid”, also comes to “pro quo.” The changes are so substantial that a full answer requires printing them in full. The new subsection (b) and (c) provide:
(b) With the statement required by (a) of this subsection, the landlord shall include copies of estimates received or invoices paid to reasonably substantiate damage charges. Where repairs are performed by the landlord or the landlord’s employee, if a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. The landlord may document the cost of materials or supplies already in the landlord’s possession or purchased on an ongoing basis by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit. Where repairs are performed by the landlord or the landlord’s employee, the landlord shall include a statement of the time spent performing repairs and the reasonable hourly rate charged.
(c) No portion of any deposit may be withheld: (i) For wear resulting from ordinary use of the premises; (ii) For carpet cleaning unless the landlord documents wear to the carpet that is beyond wear resulting from ordinary use of the premises; (iii) For the costs of repair and replacement of fixtures, equipment, appliances, and furnishings if their condition was not reasonably documented in the written checklist required under RCW 59.18.260; or (iv) In excess of the cost of repair or replacement of the damaged portion in situations in which the premises, including fixtures, equipment, appliances, and furnishings, are damaged in excess of wear resulting from ordinary use of the premises but the damage does not encompass the item’s entirety.
Moreover, Section 2 of RCW 59.18.280 was revised to state that, if all the information required to be included in a deposit accounting by Section 1, then the landlord owes the full deposit back to the tenant and is barred from any action to recover the deposit “unless the landlord shows that circumstances beyond the landlord’s control prevented the landlord from providing the statement and any such documentation within 30 days or that the tenant abandoned the premises as described in RCW 59.18.310.”
With these changed, the legislature has made its position pretty clear that landlords have been too cavalier about how they account for charges against a tenant’s deposit, and further that the penalties for non-compliance are ever increasing.
About the Author
Christopher T. Benis is an attorney with Hecker, Wakefield & Feilberg in Seattle. The information contained herein is not legal advice. You are encouraged to consult with your attorney before relying on anything contained herein.
This article originally appeared in the Summer 2023 issue of RE Magazine.