H-1064              _______________________________________________

                                                   HOUSE BILL NO. 2182

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By Representatives Locke and Nelson

Read first time 3/1/89 and referred to Committee on Housing.

AN ACT Relating to the housing trust fund; amending RCW 59.18.270; and providing effective dates.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 27, chapter 207, Laws of 1973 1st ex. sess. as amended by section 1, chapter 233, Laws of 1975 1st ex. sess. and RCW 59.18.270 are each amended to read as follows:

          All moneys paid to the landlord by the tenant as a deposit as security for performance of the tenant's obligations in a lease or rental agreement shall promptly be deposited by the landlord in a trust account, maintained by the landlord for the purpose of holding such security deposits for tenants of the landlord, in a bank, savings and loan association, mutual savings bank, or licensed escrow agent located in Washington.  ((Unless otherwise agreed in writing, the landlord shall be entitled to receipt of interest paid on such trust account deposits.))

With respect to all security deposits under leases or rental agreements entered into, renewed, or extended after the effective date of this act, a landlord shall place all security deposits that are nominal in amount and expected to be held for a short period of time in a pooled interest-bearing trust account.  As used in this section, "nominal" shall mean a security deposit which is less than half of one month's rent, and "short term" shall be either an indefinite period of time or a period of time which is less than one year.  The landlord shall direct the depository institution to pay at least every six months the interest on this pooled interest-bearing trust account, minus reasonable transaction costs not to exceed one percent of a typical passbook rate, to the state treasurer to be placed in the housing trust fund established by RCW 43.185.030.  For all other security deposits, the landlord shall place them in interest-bearing trust accounts with the tenant entitled to receipt of interest paid on such trust account deposits, minus reasonable transaction costs not to exceed one percent of a typical passbook rate.

          The landlord shall provide the tenant with a written receipt for the deposit and shall provide written notice of the name and address and location of the depository and any subsequent change thereof.  If during a tenancy the status of landlord is transferred to another, any sums in the deposit trust account affected by such transfer shall simultaneously be transferred to an equivalent trust account of the successor landlord, and the successor landlord shall promptly notify the tenant of the transfer and of the name, address and location of the new depository.     The tenant's claim to any moneys paid under this section shall be prior to that of any creditor of the landlord, including a trustee in bankruptcy or receiver, even if such moneys are commingled.

NEW SECTION. Sec. 2.     This act shall take effect October 1, 1989, for the public corporations created by chapter 35.82 RCW, and January 1, 1990, for all others.