Virginia landlords have a right to ask their tenant for a security deposit under the Virginia Security Deposit Law and the Virginia Landlord Tenant Law. The deposit of money acts as a financial cushion against a myriad of potential issues that can arise during a tenancy. The following are examples of such issues that the Security Deposit Laws aim to protect landlords against.
- Tenant fails to cover the cost of utility bills prior to moving out
- Failure by the tenant to clear any unpaid rent before moving out
- Causing damage exceeding normal wear and tear agreed upon in the rental agreement
- Causing any lease violation that leads to financial damage to the landlord
With that in mind, there are rules that you must follow after requiring your tenant to pay a security deposit under the Virginia landlord-tenant law. The following are the basic rules regarding Security Deposit Laws that you should familiarize yourself with.
1. Abide by the security deposit limit
Virginia caps the amount of money that a landlord can charge a tenant for a security deposit. The state requires that landlords not charge a security deposit exceeding the rent of two months. So, supposing you charge your tenants a monthly rent of $1,500, the maximum security deposit you can ask them for is $3,000.
Be sure to include this in your lease or rental agreement to avoid confusion. Even though these are your rights as a landlord under Virginia law, it is always recommended to include these rights in the clauses of your lease or rental agreement.
2. Ensure you provide disabled tenants with full and equal access to housing
While Virginia laws allow landlords to ask for an additional pet deposit or rent, you must exempt disabled persons. That’s because disability is a protected class under the Fair Housing Act. If a landlord fails to abide by these laws, it can open them up to the possibility of a lawsuit.
As a landlord, you have a responsibility of ensuring that disabled tenants have an equal opportunity to use and enjoy their home. Besides making reasonable accommodations, property owners may also need to do the following reasonable modifications to their rented home.
- Install tactile and visual alert devices
- Replace doorknobs with levers
- Install a wheelchair ramp at the unit’s entrance
- Remove cabinets that are below the counter
- Install grab bars in the bathroom or at the unit’s entrance
- Widen the unit’s doorways
- Store your resident's security deposit properly
Prior to 2014, landlords were required to store their tenants’ security deposits in an interest-accruing account. Then, the resident's security deposit would earn interest at an annual rate below that of the Federal Reserve’s discount rate.
The interest earned would be payable to tenants that had been renting their unit for at least 13 months. Landlords would pay the accrued interest at the end of the tenant’s tenancy.
That said, this was no longer required for a Virginia security deposit after 2014. So, under the Virginia landlord tenant law, you have no obligation to store your resident's security deposit in an interest-bearing account.
3. Make deductions for the right reasons
As a landlord in Virginia, you have a right to make deductions to your tenant’s security deposit. The following are the allowable reasons to make deductions under Virginia law.
- To pay for unpaid utility bills
- To cover unpaid rent
- To meet charges or damages that the rental agreement has spelt out
- To pay for costs exceeding normal wear and tear
But what exactly is normal wear and tear? Normal wear and tear is the gradual decline of a property’s condition due to everyday use. As such, the property damage doesn’t result from a tenant’s abuse or neglect, and therefore you cannot hold a tenant liable for the costs of fixing such property damage.
Be sure to outline normal wear and tear vs. damage in your lease or rental agreement.
Examples of such property damage includes the following.
- Warped cabinet doors
- Doors sticking due to humidity
- Wood floors becoming scuffed due to regular use
- Faded carpet from regular use
- Slightly torn or faded wallpaper
- A few scrapes, dents, smudges, chips, or holes in the walls
On the other hand, you can hold your tenant liable for any property damage exceeding normal wear and tear. Such damage can occur due to abuse, misuse, negligence, or carelessness by your tenant. The following are examples of damages exceeding normal wear and tear.
- Burns on the floor
- Missing doorknob or handle
- Missing or broken tiles
- Broken appliances
- Large nail holes on walls
- Illegal property changes, such as unauthorized paint colors
- A torn blind or wallpaper
- A missing window or door
- Keep records of your tenant’s security deposits
You must also keep records of your tenants’ security deposits. The records must itemize any deductions you have made on any of your tenant’s security deposit for the past two years.
What’s more, these records must be available on request by either the tenant, their attorney, or any of their authorized agents.
4. Conduct a walk-through inspection
Virginia tenants have a right to a walk-through inspection. You have a responsibility of making a reasonable effort to give notice to your tenant of their right to be present at the walk-through inspection.
You must give them notice of the inspection within 5 days of them serving you a move-out notice. If your tenant wishes to be present, they must give their notice in writing.
During the inspection, you must give the tenant an itemized list of damages discovered.
5. Return the tenant’s security deposit within 45 days
In Virginia, landlords must return their tenant’s security deposit (or whatever is left of it) within 45 days of their tenants moving out. If you’ve made any deductions, then you must send the remaining deposit, along with an itemized written statement. The statement must include:
- The remaining portion of the security deposit you’re returning
- Itemized list of damages, including the damage caused as well as the cost of repair
You must send the notice to the tenant via certified mail. Alternatively, you can hand-deliver the notice to the tenant in person.
If you fail to notify the tenant, return the security deposit or fail to make reasonable deductions, you may also be liable to pay reasonable attorney fees for the tenant should they bring this matter to court.
6. Transfer the tenant’s security deposit to the incoming landlord
If you sell the rental property, you must notify tenants and it’ll be the incoming landlord’s responsibility to return the security deposit back to the tenant.
Bottom Line
These are the rules that the Virginia landlord-tenant laws require landlords to abide by. Please note that wrongfully withholding your tenant’s security deposit could have consequences. Be sure to include these rights and responsibilities in your rental agreement.
If you need help navigating the law, get in touch with KRS Holdings. Our experienced team can help you with the law, your rental property, and anything else you need! Contact us for more information about our services in Richmond and Northern Virginia.
Disclaimer: This blog isn’t a substitute for professional legal advice from a qualified attorney. For expert help in landlord-tenant laws and other aspects of property management, KRS Holdings can help. We’re a successful property management company that services Richmond, Northern Virginia, Hampton Roads, and other surrounding areas.