Washington HB 1074 – Changes to Housing Provider’s Ability to Withhold Security Deposit Amounts

Dear Members,

The Washington Legislature has passed House Bill 1074 (“HB 1074”), effective July 23, 2023. HB 1074 makes changes to a Housing Provider’s ability to withhold security deposit amounts, including a prohibition against withholding amounts for ordinary wear and tear, and additional requirements for providing documentation to support the basis for any amounts withheld. These changes are summarized below. 

Checklist or Statement of Condition of Unit 

Current law requiring that no deposit may be collected by a Housing Provider unless a written checklist or statement is provided by the Housing Provider to the renter at the commencement of the tenancy describing the condition of the unit has been expanded. The law now requires the checklist or statement specifically describe the condition and cleanliness of or existing damages to the premises, fixtures, equipment, appliances, and furnishings including but not limited to:

• Walls, including wall paint and wallpaper;
• Carpets and other flooring;
• Furniture; and
• Appliances

The Renter has the right to request one free replacement copy of the written checklist.

New Deadline to Provide Statement of Deposit Accounting

The deadline for a Housing Provider to refund a security deposit amount and provide a statement of the basis for retaining any security deposit amount is now extended to 30 days (previously 21 days) from the date a rental agreement terminates, and the renter vacates the unit.  

Wear and Tear

The definition of “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 renter, immediate family member, occupant, or guest.  

Damages for wear resulting from ordinary use of the premises or not substantiated by documentation as required by law may not be charged to the renter, reported to any consumer reporting agency, renter screening service, or prospective Housing Provider, or submitted for collection by any third-party agency. 

Damage to Unit and Security Deposits 

Along with the statement providing the basis for withholding any security deposit amount, Housing Providers must now also include: 

• Copies of estimates received, or invoices paid to reasonably substantiate damage charges;
• Where repairs are performed by the Housing Provider or the Housing Provider’s employee, if a deduction is made for materials or supplies the landlord shall provide a copy of the bill, invoice, or receipt; and
• Where repairs are performed by the Housing Provider or the Housing Provider’s employee, the Housing Provider shall include a statement of the time spent performing repairs and the reasonable hourly rate charged.

No portion of a security deposit can be withheld for: 

• Wear resulting from ordinary use of the premises;
• Carpet cleaning unless the Housing Provider documents wear to the carpet that is beyond wear resulting from ordinary use of the premises;
• Costs of repair and replacement of fixtures, equipment, appliances, and furnishings if their condition was not reasonably documented in the written checklist; or
• 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.

The Housing Provider may document the cost of materials or supplies already in the Housing Provider’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. 

Penalties

If any of the above requirements are not met, the Housing Provider is liable for the full amount of the deposit. Additionally, a Housing Provider may be liable for up to double the security deposit amount if the Housing Provider intentionally refuses to follow the above requirements.  

Housing Provider Remedies 

Housing Providers must commence any lawsuit for sums exceeding a security deposit within 3 years of termination of the rental agreement.  

The checklist and documentation requirements associated with withholding security deposit amounts are not applicable to situations where the Housing Provider is withholding a security deposit amount for reasons unrelated to damage to the premises. Meaning, a Housing Provider may still include unpaid amounts owed by Renters in the Security Deposit accounting (i.e.unpaid rent). 

This article is not intended as legal advice. Please obtain advice of an attorney for any policy changes or decisions regarding residential housing provider-renter matters.