Residential Landlord Tenant Act.
The Residential Landlord-Tenant Act (RLTA) regulates the relationship between residential landlords and tenants, and includes provisions regarding the duties of tenants and landlords, remedies for violations of those duties, and definitions. Subject to a few exceptions spelled out in statute, the rental of a dwelling unit for living purposes is generally covered under the RLTA. "Dwelling unit" is a structure or that part of a structure which is used as a home, residence, or sleeping place.
Deposits and Fees.
Landlords often collect deposits, fees, and other amounts prior to, or at the outset of, a tenancy such as:
Security Deposit.
Landlords often collect a damage or security deposit, the purpose of which is to cover any damage caused to the property by the tenant, in excess of normal wear and tear resulting from ordinary use. The RLTA requires that the deposit be placed in a trust account. Any interest earned generally belongs to the landlord.
The RLTA also requires that, in order to collect such a deposit, the rental agreement must be in writing and a written checklist or statement specifically describing the condition and cleanliness of, or existing damages to, the premises and furnishings, including walls, floors, countertops, carpets, drapes, furniture, and appliances be provided by the landlord to the tenant at the commencement of the tenancy.
Within 21 days after the termination of the rental agreement and vacation of the premises, or after abandonment by the tenant, the landlord must give a full and specific statement of the basis for retaining any of the deposit and pay any refund owed to the tenant. No portion of any deposit may be withheld on account of wear resulting from ordinary use of the premises.
Installment Payments.
Upon written request from a tenant, a landlord is generally required to permit the tenant to pay any deposits, nonrefundable fees, and last month's rent in installments, as follows:
A landlord may offer the tenant the choice of paying a fee in lieu of a full security deposit. The landlord may not use the fact that a prospective tenant opts to pay the fee in lieu of a security deposit as a criterion in determining whether to rent to that tenant. Any landlord who offers the fee in lieu of the security deposit must offer the choice of the fee to every prospective tenant whose application for occupancy has been approved. Any tenant that agrees to pay a fee in lieu of a security deposit may opt out of the continuing fee and instead pay a security deposit that is otherwise in effect for the tenant's unit at the time the tenant chooses to opt out of the fee.
Any fee in lieu of a security deposit may be:
The fee may not be considered by a court, arbitrator, mediator, or other dispute resolution adjudicator to be a security deposit.
The substitute bill, in addition to the provisions of the original bill, provides that, if a landlord uses the fee to purchase insurance coverage for unpaid rent or unit damage, the landlord may not charge the tenant a fee that exceeds the reasonable cost of obtaining and administering such coverage. Additionally, it provides that the first month's fee is a nonrefundable fee as contemplated under RCW 59.18.610, which concerns installment payments.
(In support) This bill offers a tool that could be helpful for many tenants, given that it is difficult for many people to collect sufficient funds to move to a new rental unit. There needs to be consumer protections in place to ensure that those who are accessing this tool are not taken advantage of.
Optional programs, such as deposit waiver fees, are another tool to provide affordable move-in costs for renters seeking a new home. They provide additional flexibility to housing providers and renters. This bill encourages property owners and tenants, together, to eliminate security deposits, which create an unfortunate barrier to obtaining quality housing.
In Washington, security deposits average about $1,500, and a monthly waiver fee averages about $28. Nationwide, when given the option, 92 percent of renters prefer to pay the monthly waiver fee instead of the upfront security deposit. This bill gives tenants choice and flexibility, and helps people access better housing, with no cost to the state.
(Opposed) None.
(Other) There is concern that the bill, in its current form, would facilitate the use of products that are potentially harmful to renters without providing any remedy for renters who are harmed. Landlords are currently free to use the type of waiver fee products that this bill authorizes. While many of these products describe themselves as insurance, they do not actually indemnify renters against damage charges. When a landlord collects a security deposit, state law limits what kind of damage the landlord may charge the tenant for, and creates remedies for renters if the deposit is improperly withheld. The same protections do not apply for deposit waiver fees. Finally, there is concern that the bill will potentially cut renters off from consumer protections because violations of the RLTA do not constitute violations of the Consumer Protection Act. However, the products that this bill authorizes are already in use, and they are a good option for some landlords and renters. There is more work to be done to ensure that this bill offers more protection for renters.