Washington State Trust Account For Security Deposit?

Question

Hi everyone,

My wife and I are preparing our first rental in Washington State. I know WA law mentions that the security deposit must be held "in trust."  My understanding is that the account must be an escrow type account. I spoke with the lawyer that reviewed my lease and he seemed to concur.

The attorney stated that, "any bank should know what that is and be able to create one for you." However, I cannot find a bank that creates this account, I tried applying for an escrow express account with Capital One but they do not do open these accounts for businesses in WA.

Am I mistaken on the type of account required? If not, can anyone recommend a financial institution?

Thank you for the help,

Kale

Julien J. · Answer

Congrats!

A regular account works just fine. Just hold the security deposit funds in there and do not do run any other transactions through it.

Angela Goossens · Answer

Kale, Congrats on your first rental in WA! Northwest Contract Collections can manage collection/distribution of funds for your rental & their rates seem reasonable. www.nwcontractcollections.com

Kale Wilsford · Answer

@Nathan Gesner thank you for the response and help! The whole “trust” language really caused some confusion.

I appreciate it!

Nathan Gesner · Answer

Here's the law: https://apps.leg.wa.gov/rcw/de...

The question is: what is a "trust" account?

It's just an ordinary bank account where you hold funds on behalf of another and it's separate from your funds. That's it.

Go to any bank, open an ordinary account, and put the Tenant's deposit in there. You don't need to name it "Tenant Trust Fund" or tell the bank it's a trust account or file paperwork with the state or anything else special.