As a landlord in Virginia, you are required, per landlord tenant act and security deposit laws, to collect a security deposit from your tenants. This deposit acts as a safety net for landlords in case of financial liability emanating from their tenant's actions. Examples of such actions include nonpayment of rent and early lease termination.
Virginia has a detailed security deposit law in place. As a landlord, understanding the law can help you avert potential disagreements or conflicts with your tenant's security deposit. So, without further ado, here's a basic overview of Virginia's Security Deposit Law.
Maximum Security Deposit
According to Virginia landlord tenant law, there's a limit to how much of a security deposit you can charge your tenants. A landlord must only charge the equivalent of 2 months' rent as security deposit. So, if the monthly rent is $1,000, you can only charge a maximum of $2,000 as security deposit.
Interest on Security Deposit
In the past, landlords were required to store a tenant's deposit in an interest-earning account that would earn interest annually. The interest was payable to tenants who had rented for at least 13 months.
Virginia landlords are no longer required to put a tenant's entire security deposit in an interest-accruing account, per the law. The only exception to this is if both you and your tenant agree in writing as part of the lease or rental agreement.
Deductions on Security Deposits
As a Virginia landlord, per virginia code, you have a right to deduct money from a tenant's security deposit for various reasons. Some of these reasons include:
- To pay unpaid utility bills. Upon lease signing, tenants are assigned some utilities such as gas and electricity. When they move out, they are required to have all unpaid utility bills, paid. If they don't, you have a right to make the appropriate deductions from the Virginia security deposit.
- To cover unpaid rent. If a tenant breaks the lease, they are still required to pay all the due rent remaining under the lease. If they don't, you can make the appropriate deductions from their deposit.
- To cover excessive property damage. When moving out, tenants are required to leave the premise in its original conditional. If they don't, you can use part or all of their deposit to make the repairs. Examples of excessive property damage include a smashed bathroom mirror, a hole in the middle of the door, and a missing or damaged door handle or lock. Be advised that there is a difference between excessive damage and normal wear and tear.
- To cover lost income. When a tenant abandons a unit, landlords usually undergo significant losses. To help mitigate against that loss, a landlord may use part or all of the deposit to cover their losses.
What about cleaning fees? In the state of Virginia, landlords aren't required to charge cleaning fees. That said, you may do so if the charge or fee is specified in the lease or rental agreement.
Security Deposit Receipt
In some other states, a landlord must provide a written notice of receipt for the Virginia security deposit. In the state of Virginia, however, this is not the case.
Security Deposit Records
As per Virginia law, all records pertaining to security deposits must be kept by the landlord as per security deposit laws. The records must show any itemized deductions made from tenants' security deposits within the past 2 years.
Additionally, a landlord must make the records available for viewing by the tenant, their attorney, or any of their authorized agents during normal business hours, per Virginia landlord tenant law.
In Virginia landlord tenant law, inspections are necessary. As a Virginia landlord, you must make reasonable efforts to give the tenant notice of their right to be present during the inspection of the rental unit. The notice must state when the inspection will be held. If the tenant wants to be present, then they must respond in writing as well.
Please note that, as per Virginia law, the inspection shouldn't be scheduled more than 3 days prior to the move-out date.
If there are damages exceeding normal wear and tear in the dwelling unit, you must give the tenant an itemized list of the damages to the rental property.
Return of a Tenant's Security Deposit
In Virginia, landlords have 45 days from the tenant's move-out date to return a tenant's deposit. When you return the remaining portion of the deposit, you must also include an itemized statement as well. The statement must include the security deposit amount, as well as the deductions made.
Most residential leases will require you can deliver the notice to the tenant through hand-delivery or via certified mail.
If the landlord fails to recieve a forwarding address, you're only required to keep the deposit for one year. After that, you'll have no responsibility to continue keeping the money for the tenant. Instead, it is the property owner's responsibility to turn it over to the State Treasury as unclaimed property.
Failure to Return the Deposit by the Landlord
If you fail to return the amount within the 45 days upon tenant move-out, Virginia law states that you may face a number of charges such as meeting costs of the suit and reasonable attorney fees, as well as paying back the amount withheld.
Sale of Property
If you decide to sell your Virginia unit, you must transfer all deposits to the incoming landlord. It then becomes the new property owner's responsibility to return the amount to the tenant when they eventually move out. You should also notify the tenant of the change in landlord.
Security Deposit as Last Month's Rent
Most landlords don't permit their tenants to use the security deposits as payment for the last months' rent on the dwelling unit. However, this can be made possible if both parties agree to it.
We Can Help
Do you still have some questions? If so, RentEasy can help. We are a reliable and professional rental property management company servicing the areas of Chesapeake, Hampton, Suffolk, Virginia Beach, and Norfolk. We specialize in managing single-family homes, multi-family homes, renter's insurance and apartments. Our goal is to minimize your running expenses, maximize your income, and ultimately reduce the stress of managing a real estate property.
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Disclaimer: This blog shouldn't be used as a substitute for legal advice from a professional attorney. Laws change frequently, and this post might not be up to date when you read it. Please get in touch with us for any questions you have regarding this content.