Even the most meticulous landlord might be sued by a tenant over the return of a security deposit. The basic steps described below will minimize the possibility that you'll spend hours in court haggling over back rent, cleaning costs, and damage to your rental property.
The most important thing you can do is to follow state law scrupulously when you return security deposits. Washington landlords have 30 days after the tenant terminates and leaves the rental to return the security deposit or provide a written explanation of why they're withholding any funds. The written explanation must fully and specifically state how the deposit has been applied (for example, toward back rent or costs of cleaning and damage repair). It must also include copies of estimates received or invoices paid as proof of the charges. (Wash. Rev. Code § 59.18.280(1) (2023).)
If a landlord fails to provide the refund of the security deposit or written documentation of how all or part of it was applied, the landlord must return the security deposit amount in full. When a tenant can show that the landlord intentionally refused to return the deposit or provide a statement, a judge can award up to two times the amount of the deposit to the tenant. (Wash. Rev. Code § 59.18.280(2) (2023).)
To reduce the possibility of disputes over security deposits, write a move-out letter to tenants who have given you notice that they are ending the tenancy. Your move-out letter should:
After the tenant leaves, you will need to inspect the rental unit to assess what cleaning and damage repair is necessary. Many landlords do this on their own and simply send the tenant an itemized statement with any remaining balance of the deposit. But, if at all possible, do your inspection with the tenant who's moving out, rather than by yourself. This will go a long way towards minimizing deposit disputes.
Ideally, you will have used some kind of inventory or landlord-tenant checklist when the tenant moved in so you can compare the condition of the rental at the start and end of the tenancy. (Washington requires landlords to give new tenants a written statement on the condition of the rental unit at move-in time. (Wash. Rev. Code § 59.18.260 (2023).)
It's also a good idea to photograph or videotape the rental unit so that you have visual proof of the condition of the rental unit when the tenant moved out. Ideally, you will have also done this when the tenant moved in, so you have before and after photos.
You might want to offer the tenant a second chance at cleaning or fixing any damage you've identified in the final inspection before you deduct cleaning charges from the security deposit.
Once the tenant has completely moved out and you've inspected the premises, prepare an itemized list of deductions for cleaning, repairs, back rent, or other financial obligations required under your lease or rental agreement. List the item (such as repainting living room wall or five days unpaid rent) and the dollar amount of the deduction. Regarding repairs and damage repair, attach receipts (if you've already had the work done) or provide a reasonable cost estimate.
No matter how carefully you followed Washington security deposit laws, and properly account to your tenants for their deposits, you still might be sued by a tenant who disagrees with your deductions, or claims that you failed to return the deposit when and how required.
Tenants usually sue in small claims court, where it's cheap to file, lawyers aren't necessary, and disputes typically go before a judge (there are no juries) fairly quickly. You don't need a lawyer—in fact, they're not even allowed in some cases. The maximum amount for which an individual tenant can sue in Washington Small Claims Court is $10,000. (Wash. Rev. Code § 12.40.010 (2023).)
Before going to court, your tenant will most likely email, write, or call you demanding that you refund more than you did or fix some other problem involving the deposit. Some states require this type of demand letter before the tenant can begin a small claims case.
If you have failed to meet the deadline for returning the deposit (30 days in Washington), do what you can to make things right. Unless you can show the judge that circumstances beyond your control prevented you from providing the refund and statement, you won't be allowed to sue the tenant or raise any defense against returning the full deposit. (Wash. Rev. Code § 59.18.280(2) (2023).)
Intentional withholding of the deposit and documentation can mean that you'll be responsible for paying the tenant twice the amount of the deposit. (Wash. Rev. Code § 59.18.280(2) (2023).)
Do your best to stay out of court. Try working out a reasonable compromise, perhaps with help from a private mediator or the court's mediation service. If you reach an agreement with your former tenant, sign a settlement agreement in which the tenant agrees to accept payment as full and final satisfaction of your obligation to return the deposit.
If a compromise isn't possible, your tenant will probably sue you promptly, but might have up to a few years to do so, depending on the applicable statute of limitations (typically, at least one year). So, don't throw out cleaning bills, receipts for repairs, or photos showing dirt and damage, lest you be caught defenseless.
If the tenant sues you, the court will officially notify you of the date, time, and place of the small claims court hearing. Preparation is key to winning your case in small claims court. You want to make it clear that you knew (and followed) the applicable security deposit rules.
In addition, you'll want to assemble tangible evidence to take to court (what you need depends on the specifics of your case), such as:
Small claims courts are informal places, but consider watching a couple of hearings a few days before your court date so you know what to expect. Your court website might also provide useful advice. Before you go to court, practice your statement with a friend or relative, so that you can defend yourself in an efficient and convincing way, backed up with relevant evidence.
The trial consists of both you and your tenant explaining your point of view of the dispute and presenting any evidence or witnesses. This typically takes less than half an hour, and the judge either announces a decision right in the courtroom or mails it within a few days.
Tenants aren't the only ones who can use small claims court. If the security deposit doesn't cover what the tenant owes you for back rent, cleaning, or repairs, you might be able to file a small claims lawsuit against the former tenant.
Remember that you must provide the tenant an itemization by the state deadline, even if you don't send money—for example, if the tenant has left owing several months' rent or the entire deposit did not cover necessary cleaning and damage repair.
Start by writing a demand letter to the tenant, asking for the amount of your claim. Include a copy of your written itemization of how you applied the tenant's security deposit to the charges (this itemization should have requested payment of the balance). Ask for exactly what you want and be sure to give the tenant a deadline. Conclude by stating that you will promptly file a lawsuit in small claims court if you don't reach an agreement by the deadline.
If your demand letter doesn't produce results, ask yourself the following questions before going to court:
If the answer to any of these questions is no, think twice before filing suit.
Nolo's Small Claims Court & Lawsuits section provides a wide variety of articles on small claims court, including what to do if you are sued, how mediation works in small claims cases, how to file an appeal, and more. For complete details on the subject, see the Nolo book Everybody's Guide to Small Claims Court.
The Landlords & Tenants section of the Nolo site includes dozens of useful articles on property management, rental applications, preparing a lease, repairs, and more.
Nolo's Every Landlord's Legal Guide includes detailed advice on itemizing security deposit deductions for unpaid rent, cleaning, and repairs; handling deposits when a tenant files for bankruptcy or is evicted; dealing with deposits from cotenants; drafting a settlement agreement; collecting a court judgment if you sue and win your case, and more.