Tenants frequently face deposit theft in Bellingham. Here’s what you can do about it

Landlords illegally retaining security deposits is one of many challenges Bellingham tenants face as renter protections are lacking, advocates here say.

Rebecca Quirke of the local advocacy group Tenants Revolt said the issue of deposit theft is so widespread that about eight out of 10 renters that she’s met within the city do not get their full deposits back.

“Conservatively, 85% of the people that we speak to have some part of their deposit stolen,” Quirke said.

Quirke, who is a landlord herself, said tenant protections here are virtually non-existent.

In Bellingham, “It’s the worst I’ve ever, ever, ever seen,” she said.

Quirke said she has lived as a renter in Colorado, Florida, Illinois, Michigan, New Mexico and now Washington and has seen first-hand how poorly tenants can be treated.

It’s unclear exactly how many renters in Bellingham fail to get back their deposits — which can run into thousands of dollars — because few lawsuits are filed.

But since Tenants Revolt began in July 2022, with the goal of bringing a series of mass-action and class-action lawsuits against landlords for habitability violations, theft and property negligence, Quirke said she has spoken with more than 300 renters in Bellingham whose landlords retained at least part of their security deposit.

Washington law outlines specific rules that landlords are required to follow regarding deposits:

▪ Landlords must provide tenants with an itemized statement of what their deposit was used for.

▪ The written rental agreement must contain the terms and conditions under which a deposit or portion of it may be withheld upon the termination of the lease.

▪ The landlord must provide a move-in checklist that is signed by both parties documenting any preexisting damages and the condition of the rental at the time of move-in.

Sometimes, landlords do have fair reason to withhold part or all of a tenant’s deposit. Organizations exist to support landlords dealing with deposit disputes, such as the National Association of Independent Landlords. But when a deposit is unfairly withheld, the burden lies heavily on tenants to prove it.

One Bellingham couple who sued their former landlord for illegally collecting and retaining their security deposit — and won — are Michael Bottomley and Victoria Bovee.

They rented a house from September 2021 to September 2022 that was owned by Mike Stacy and managed by Chuckanut Property Management. Neither the landlord nor the property management company responded to requests for comment from the Bellingham Herald.

The two moved from out of the area and had another roommate, who was living locally at the time, do a walk-through with the owner. Bottomley and Bovee were sent a video of the property.

“Once we got into the place, within the first month, we immediately realized that there was a lot of damage to the property that did not align with the video he sent us,” Bottomley told The Herald.

Bottomley and Bovee said their unit had broken windows, cracks in the walls, a leak under the house, a rodent infestation and a mold problem, among other issues.

The new tenants took photos and videos of all of the issues but they had already paid their $2,360 security deposit and were concerned about being blamed for the damages. The tenants later found out the owner did not provide an inspection checklist during the original walk-through, which is required by law. Because of this, the owner was never legally allowed to collect a deposit.

So when the owner tried to retain a portion of the deposit at the end of the lease for cleaning and maintenance, the tenants sued.

After months of gathering paperwork and compiling evidence, Bottomley and Bovee faced their landlord in small claims court — something Quirke said only a very small percentage of renters are able to do.

Filing a lawsuit is time-consuming and often stressful. It also costs money that tenants will only get back if they win their case.

“We were a lot more prepared than a lot of people are because we trusted our intuition from the beginning and because we were lucky enough to be able to take the time in the day to gather evidence,” Bovee said. “A lot of people do not have that ability because it’s not afforded to us in our regular daily lives.”

The court ordered the landlord to return the full amount of their deposit plus the cost to file the claim and serve the papers, which is standard practice in this type of lawsuit. By law, if the tenant can prove that the landlord intentionally and illegally withheld a security deposit, the tenant can be awarded twice as much as the amount of the security deposit.

“Even though we got through this case and got that little sucker punch, the fight is not over until we see real change,” Bottomley said.

But this is part of the problem that local renter advocates say needs to change.

“For all the work that it takes to go through and actually take your landlord to court, you only get the amount of money that they’ve stolen from you,” Quirke told The Herald. “There’s no accountability.”

Dispute resolution an option

Landlord disputes that aren’t able to be mitigated sometimes end up in small claims court. Whatcom County District Court does not record the number of deposit dispute cases filed each year, only the number of small claims cases filed overall.

There were 325 small claims cases filed in 2022. As of May 3, a total of 96 small claims cases had been filed in Whatcom County this year.

Small claims cases can involve anything with a monetary value including disputes regarding auto damages, wages, loans, property damages, unpaid rent and deposits not returned.

The Whatcom Dispute Resolution Center (WDRC) is a nonprofit that helps mediate disputes between landlords and tenants for free. Individuals who plan to or already have filed a small claims case often reach out to the WDRC in an effort to avoid litigation and reach a solution independently, according to the executive director of the WDRC, whose full name is Moonwater.

“Not infrequently, small claims cases between landlords and tenants involve deposits, disagreements about the lease, rent, damages, cleanliness, move-out plans, keys, pets, communication, and more,” Moonwater said in an email to The Herald.

Typically more than 80% of people who participate in mediation through the WDRC are able to reach agreements and avoid court, Moonwater said.

As of May 5, WDRC had managed 150 cases in 2023. Of those, 30 were landlord-tenant related, with 19 related to deposit returns.

In 2022, WDRC managed 233 cases. 56 of them were landlord-tenant related. Of those, 36 involved deposit returns.

New law goes into effect

A new piece of state legislation dealing with the issue of unfair deposit withholding was signed into law on Tuesday by Gov. Jay Inslee. The bill, HB 1074, limits landlords’ ability to withhold deposits after tenants move out.

Under the new law, Washington landlords can no longer withhold any part of a deposit for “wear resulting from ordinary use,” standard carpet cleaning, or for fixtures and appliances unless those items were previously documented in good condition when the lease began.

In addition, landlords must now show documentation to substantiate any claims of damages, though the bill extends the timeline that landlords can provide documentation for damage claims from 21 days to 30 days. It also adds a three-year statute of limitations for landlords to sue tenants when trying to recover amounts that exceed the deposit.

Documentation is key

Bottomley and Bovee did exactly what they needed to do to win a case like this — they kept documents and proof. That’s what local legal experts suggest in order to be successful in a case.

Jennifer Roberts, an attorney with LAW Advocates, says photos, videos, texts and emails can all be used as evidence. Undocumented conversations in person or over the phone are not as useful in a court of law.

“It is not unusual for me to talk to someone when they’ve moved out, and the landlord has retained some or all of their security deposit, and it’s too late for them to go back and do things like take pictures,” Roberts said.

Documentation upon move-in and move-out, along with documentation of damage made throughout the duration of the lease that is not the tenant’s fault is critical, according to Roberts.

Other resources available

LAW Advocates is an organization that provides free civil legal assistance to low-income Whatcom County residents. Residents seeking legal landlord-tenant advice can visit its Street Law pop-up clinic for free at the Bellingham Public Library.

The next two Street Law clinics are being held on May 20 and June 24, 2023. Other resources are available via Washington Law Help and the Northwest Justice Project.

Both landlords and tenants can reach out to the Landlord Liaison with the Opportunity Council for resource referrals, basic information about Landlord-Tenant Law and Fair Housing and how to work with each other to resolve issues.

The city of Bellingham does not provide any direct services to tenants but its website does have a compiled list of community resources to assist them in understanding their rights and responsibilities and to identify where to go for assistance. The city also provides information on fair housing laws.

Do you have a story to tell about renting, buying or building Whatcom County housing? Reporters Rachel Showalter and Robert Mittendorf invite your comments at newsroom@bellinghamherald.com.