Couple of questions....
1) What EXACTLY does the lease say about the deposit and the return of the deposit???
2) From your post, the tenancy was supposed to start on 1/10. When did your friend advise the landlord of the non-tenancy??
3) Did the lease CLEARLY include "the terms and conditions under which any deposit will be returned."
4) In order for the lease to be valid, it MUST "say what each deposit is for and what the tenant must do in order to get the money back."
In any case, you might want to read the information on the following sites (contact phone numbers included):
http://www.tenant.net/Other_Areas/Washstat/lanten2.html#deposits and other fees
http://www.wsba.org/com/pamphlets/landlord-tenant.html
http://www.consumerrights.net/landlord_tenant_pamphlet.html
Finally, here is the Washington statute that applies to your case:
"RCW 59.18.253
Deposit to secure occupancy by tenant -- Landlord's duties -- Violation.
(1) It shall be unlawful for a landlord to require a fee from a prospective tenant for the privilege of being placed on a waiting list to be considered as a tenant for a dwelling unit.
(2)
A landlord who charges a prospective tenant a fee or deposit to secure that the prospective tenant will move into a dwelling unit, after the dwelling unit has been offered to the prospective tenant, must provide the prospective tenant with a receipt for the fee or deposit, together with a written statement of the conditions, if any, under which the fee or deposit is refundable. If the prospective tenant does occupy the dwelling unit, then the landlord must credit the amount of the fee or deposit to the tenant's first month's rent or to the tenant's security deposit.
If the prospective tenant does not occupy the dwelling unit, then the landlord may keep up to the full amount of any fee or deposit that was paid by the prospective tenant to secure the tenancy, so long as it is in accordance with the written statement of conditions furnished to the prospective tenant at the time the fee or deposit was charged. A fee charged to secure a tenancy under this subsection does not include any cost charged by a landlord to use a tenant screening service or obtain background information on a prospective tenant.
(3) In any action brought for a violation of this section a landlord may be liable for the amount of the fee or deposit charged. In addition, any landlord who violates this section may be liable to the prospective tenant for an amount not to exceed one hundred dollars. The prevailing party may also recover court costs and a reasonable attorneys' fee."
Source:
http://search.leg.wa.gov/pub/textsearch/ViewRoot.asp?Action=Html&Item=1&X=108190558&p=1
So, with the above, at the time that the deposit was paid, the landlord MUST:
1) "provide the prospective tenant with a receipt for the fee or deposit, together with a written statement of the conditions, if any, under which the fee or deposit is refundable" AND
2) Provide a "written statement of conditions furnished to the prospective tenant at the time the fee or deposit was charged." AND
3) That written statement MUST detail the conditions of deposit and the condition of its return.
If ANY of these were not done, then the landlord could be subject to penalties..... maybe that is why they are only offering the $100.00!!
Provide a written statement of conditions at the time that the fee or deposit was charged.