State and local governments are steadily adopting security deposit laws that offer renters financial flexibility. Many of these laws—like Texas SB 1783—also ensure operators have adequate protection and profitability for their assets. Earlier this year, the state of Washington passed one such law, joining a growing number of states adopting new security deposit legislation. The bill gives both operators and renters more freedom and flexibility, by allowing properties to charge a monthly fee instead of paying an upfront security deposit.
As laws around security deposits, evictions, and rental assistance continue to evolve, operators need to understand the impact and implications in order to stay ahead and take advantage. So, what do the most recent legislative changes in Washington state mean, and how can operators best prepare their properties and support their residents?
After more than two years and multiple extensions, the Washington state eviction moratorium officially ended in November 2021. In anticipation of the moratoria lifting, a new process for evictions was established to offer a route to dispute resolution and access to resources, such as rental assistance, before filing a court action.
Today, this Eviction Resolution Program (ERP) remains operational in all 39 Washington state counties. While operators are able to proceed with evictions, they must understand the newly established procedures.
Before an operator can serve a 14-day Pay Rent or Vacate Notice, the property must prove that they have operational programs for the following:
In March 2022, the Washington state legislature passed a new security deposit law (Bill 2064), giving operators the ability to offer residents the option to pay a monthly fee in lieu of a security deposit. In effect, the law makes renting more affordable for residents battling rising rents and inflation and leasing more secure for operators.
The following provisions are outlined by the bill:
For the full bill details, visit here.
With rent growth and inflation surges, it’s increasingly important for operators to meet the needs of renters who are dealing with financial strain while also protecting their properties from loss—both of which traditional deposits simply fail to do. The recent wave of deposit replacement legislation is a clear sign that both parties are ready to ditch deposits in favor of smarter loss protection.
Bill 2064 marks an important step in that direction. In fact, many savvy owners and operators in Washington state have already joined the deposit-free revolution and have removed nearly $7 million in deposits.
As renters demand move-in flexibility, operators need solutions that create a positive customer experience, minimize workload for site teams, mitigate regulatory risk, and reduce final account balances across entire portfolios. Luckily, legislation is catching up to modern expectations and paving the way for smarter solutions like lease insurance to offer a true and secure way to protect against loss.
Learn more about how you can use the latest financial risk technology for modernized loss protection—get in touch here.
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