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Rental Deposits

RENTAL DEPOSITS

An issue I regularly see in residential landlord-tenant relationships surrounds deposits. Landlords, it is worth a few minutes of your time to make sure you understand how to apply them. In the long run, the minimal extra time you spend to follow them could save you thousands that could have easily been avoided.

First, if you are going to require a deposit, there must be a written rental agreement. The agreement shall include the terms and conditions under which the deposit can be withheld (RCW 59.18.260 of the Residential Landlord/Tenant Act).

I want to add a point here. Tenants constantly try to have the deposit applied to an obligation under the lease, such as unpaid rent. It is your discretion whether to apply it. I recommend never doing so until you have the unit back and know the extent of other damages.

An additional requirement of RCW 59.18.260 is that there must be provided to the tenant a written checklist. A piece of advice, have the tenant sign an acknowledgment that you provided the checklist, in case the tenant does not return it, and provide the tenant a copy of this statement. Failure to provide the checklist could require you having to return the deposit, whether damages by the tenant occurred or not.

Landlords, after receipt of the deposit, the funds must be placed into a trust account and it must be disclosed to the tenant where the funds are being held (RCW 59.18.270). This is simply accomplished by adding a clause in the lease disclosing the bank it will be held at.

It is common within lease agreements to add language that a part of the deposit is “non-refundable.” RCW 59.18.285 states that any funds paid that are non-refundable may not be designated as a “deposit” or as part of the deposit. The rental agreement must clearly state that the fee is non-refundable. If this is not done, then the “fee” is converted to a refundable deposit subject to the terms of the lease. The conversion to “refundable” does not mean the tenant is automatically entitled to that portion being refunded. It simply means that there must now be a basis to retain it as disclosed in the lease agreement.

The most common problems, and where landlords get in the most trouble, arise for deposits after the tenant leaves. Specifically, when the funds must be returned. RCW 59.18.280 states that the notice for retention of the deposit, along with any refund due to the tenant, must be given within 14 days of the tenant vacating the premises or the landlord learns of abandonment. The notice and refund must be sent first-class, postage prepaid, properly addressed to the last known address of the tenant, and placed in the United States mail by the 14^th day.

Let’s break this down some. First, the statement must be a full and specific statement. Simply stating “damages” or vague language to that affect is not sufficient. Break it down as best you can.

Second, a common excuse of landlords is they do not know the “extent” of damages which is why it was not sent within 14 days. It should not be difficult to enter the unit and determine the damages. There really is no excuse for this. The real challenge centers on the actual costs. For costs to repair/replace, it is sufficient to state an estimate of the costs. It can be adjusted later. Do not just make up a number though. If you can go to a hardware store or have a third party give an estimate, get it. If that is not possible, then give you best estimate. Do not be unreasonable though. $5.00 for a nail is not reasonable.

Another piece of advice, where possible add repairs into the lease. For example, if the landlord is going to do the work, put in the lease that the work will be completed at a specific hourly rate.

Next, the 14 day rule. This is not a mere suggestion. Landlords, you have 14 days with one exception, circumstances beyond your control prevented providing the statement timely. Being too busy is not an excuse. In my experience, there is rarely a time when the exception applies.

Last, where to send it? It is common for a tenant to not provide a forwarding address. The statute states it simply has to be sent to the “last” known address, which can be the unit rented from you. Do make sure that you send it through the mail, first class, postage prepaid. This requirement is there because people will put forwarding addresses for their mail. If it comes back to the unit, simply hold it to prove that it was sent.

These rules may seem a little excessive but regardless they have to be followed. Courts can and do hold landlords strictly to them on a regular basis. Believe me when I say it is worth the time to follow them exactly. Failure to do so could lead to significant costs, including paying up to twice the deposit and attorney fees and costs of the tenant, if they are not followed. If in doubt give our firm a call and we can discuss what needs to be done.

HIP at the 2013 Benaroya Seafair Triathlon

JULY 21, 2013 – HANIS IRVINE PROTHERO legal assistants Katherine Brennan and Sean Prothero competed in the 2013 Seafair Triathlon. Both achieved their personal best times in the event which consists of a ½ mile swim, 12 mile bike, and 5K run. Sean completed the course in 1:34:04 and Katherine finished in 2:04:36. Great effort. HIP is proud of you! Congratulations!

Katherine finishing the bike leg of her triathlon

Sean finishing the swim leg of his triathlon

HIP friends Andrea Keikkala, Executive Director of the Kent Chamber of Commerce, and State Representative Dave Upthegrove, also competed in the event. Dave competed with his father, John, who is blind.

John – you are an inspiration to everyone! Way to go!

HIP legal assistants Sean Prothero and Katherine Brennan with Executive Director of the Kent Chamber of Commerce Andrea Keikala, State Representative Dave Upthegrove, and his father John Upthegrove at the finish line.Sean, Katherine, Andrea, John, and Dave at the finish line. — The Triathletes at the finish line!

How Bankruptcy Can Save Your Home

HOW BANKRUPTCY HELPS SAVE YOUR HOME

Bankruptcy, although the big bad word when it comes to finances, can and does help people every day. One very big way it can help is by potentially allowing someone to keep their home.

In today’s world, people are finding themselves falling behind on mortgage payments for any number of reasons. Foreclosure is started leaving the owners with having to come up with large amounts of money to catch up the arrears on their home, in order to keep it, which one does not have. The owner then attempts other ways to try to save the home including trying to qualify for a loan modification or refinance of the property. However, this does not always work, leaving the owner in a tough spot. This is where bankruptcy can help.

In a chapter 13 bankruptcy, one creates a plan payment. The plan typically last for 60 months. How the plan helps is it takes your arrears and spreads the amount over the 60 months of the plan. An added bonus, the bankruptcy stops ongoing interest or penalties on the arrears from accruing.

Something that is important to understand about this though is that the owner must keep the house mortgage payment current during this time period. The first question one would need to ask then: can I continue to make the current payment on time? The bankruptcy will not change the interest rate or the monthly payment or any other terms, with a few exceptions, it will simply allow you a way to catch your payment up over 60 months.

For example, your current payment is $1,500.00 per month and you are behind $6,000.00. Under the plan your payment would be $1,600.00 per month ($1,500.00 for the ongoing and $100.00 for the arrears). By the end of the 60 months you have kept your ongoing payment current and caught up on the arrears.

Now, it is not always clear cut as this example provides. Other factors come into play in figuring your plan payment as well, such as income, court cost, fees, and other debts. Regardless, it may be worth your time to talk with a bankruptcy attorney if you are facing a foreclosure to see if bankruptcy can help. This avenue may just allow you to keep your home.

Mark Prothero presents at 3rd Annual Boy Scout Law Merit Badge event.

June 21, 2013 – Hanis Irvine Prothero partner Mark Prothero joined a group of criminal justice professionals in presenting at the 3^rd Annual Boy Scout Law Merit Badge event. The day-long event was held at the Maleng Regional Justice Center and Kent Commons. Boy Scouts from throughout the area heard from a broad spectrum of people involved in all aspects of the United States criminal justice system to help earn their merit badges. Other presenters included Kent Police officers, court administrators, investigators, attorneys John Casey, Kevin Jussell, Steven Weier, and King County Senior Deputy Prosecuting Attorney Rich Anderson. The boy scouts also heard from several King County Superior Court judges, including Brian Gain, LeRoy McCullough, James Cayce, Andrea Darvas, Carol Shapira, Suzanne Parisien, and Bill Bowman. Mark’s presentation was entitled “Criminal Justice: Defending the Accused” examining our constitutional rights from the perspective of a defense lawyer. The event was organized by attorney Jennifer Rydberg, who said it was “…the third and best law merit badge event, a whopping success.”

2013 Kent Downtown Partnership Dinner & Auction

Hanis Irvine Prothero was represented at the Kent Downtown Partnership Dinner/Auction by Annette Bolster, Mike Hanis, Jorge Ramos, Dennis Shanlian, Greg Girard, Sean Prothero, and Mark Prothero. A great time was had by all at the fundraising event at the Showare Center. Mike and Jorge successfully bid on several items and everyone enjoyed an entertaining Master of Ceremonies, State Senator Joe Fain. Annette did a fantastic job during the Dessert Dash, running over and grabbing a delicious cake for the HIP table. A great event for a great organization!