Are you a landlord worried about handling security deposits correctly? Or a tenant unsure about your rights when it comes to getting your deposit back? Virginia’s security deposit laws outline crucial responsibilities for both parties, yet many find themselves lost in legal jargon.
In 2024, these laws remain pivotal in fostering transparency and fairness in rental agreements. This article serves as your ultimate guide about Virginia security deposit laws.
Amount and Prepaid Rent
The Virginia landlord tenant act security deposit cannot exceed the equivalent of two months’ rent. Additionally, there are specific rules regarding prepaid rent if it is agreed upon by both the landlord and tenant.
According to Code § 55-248.7:1, the landlord and tenant can agree that the tenant will pay prepaid rent. When a landlord receives prepaid rent, it must be deposited into an escrow account at a federally insured depository in Virginia no later than the fifth business day after receipt.
This prepaid rent must remain in the escrow account until it is due. The landlord cannot withdraw any portion of the prepaid rent from the account unless:
- It is time for the rent to be paid, or
- The landlord is otherwise entitled to a portion of the prepaid rent, and
- The tenant provides written consent for its withdrawal.
Note: Prepaid rent is different from a security deposit.
Allowable Charges and Inspection After Move-Out
A security deposit is mainly used for any damage beyond normal wear and tear, but there are other specific uses for a security deposit. The landlord may apply the security deposit toward any breach of the rental agreement including:
- Repairs for damage to the property, including the premises, buildings, common areas, parking areas, furniture, fixtures, carpet, or appliances.
- Costs associated with abandonment of the premises.
- Unpaid rent or late charges.
- Attorney’s fees related to a breach of the rental agreement.
The landlord must make a reasonable effort to inform the tenant of their right to be present at the landlord’s inspection.
The landlord will conduct an inspection of the premises at the end of the tenancy, typically after move-out. The landlord must make a reasonable effort to inform the tenant of their right to be present at the landlord’s inspection.
If the tenant wishes to be present at the inspection they must notify the landlord in writing, and the landlord must notify the tenant of the time and date, which must be made within 72 hours of delivery of possession to the landlord. After the inspection the landlord must give the tenant an itemized list of damages.
Return of Security Deposit
After the tenant moves out and the inspection is complete the landlord must send the tenant a written notification of any deductions made to the security deposit. For that reason the tenant should provide the landlord with a forwarding address.
The written notification by the landlord must be made within 30 days and shall itemize the reasons for the deductions. And within 45 days of move-out the landlord shall return the security deposit with the itemized security deposit settlement statement listing any deductions.
When there is more than one tenant the landlord must return the security deposit via one check payable to all tenants, mailed to the forwarding address. Finally, Virginia interest rates are not due and payable on the security deposit.
“Escheat to Commonwealth”
What is “escheat"? When does it apply?
Escheat refers to the legal process by which unclaimed property, such as a security deposit, is transferred to the state. This typically happens when a landlord cannot locate the tenant or the tenant fails to claim their Virginia landlord tenant act security deposit within a specified timeframe.
Escheat laws vary by state, but they are designed to ensure unclaimed deposits are safeguarded rather than kept by the landlord. Landlords must make reasonable efforts to contact the tenant before initiating the escheat process.
Legal process for transferring unclaimed deposits
Per Code § 55-248.15:1, if the tenant does not provide a forwarding address, then one year from the date of the end of the 45-day time period for returning the deposit, the landlord must within 90 days escheat (transfer) the balance of the security deposit to the Commonwealth, sent to the Virginia Department of Housing and Community Development, payable to the State Treasurer and credited to the Virginia Housing Trust Fund established pursuant to Code § 36-142. After payment to the Commonwealth, the landlord has no further liability to the tenant relative to the security deposit.
Key Legal Updates for 2024
Here are key updates and important details about Virginia's 2024 security deposit laws:
- Timeline for Returns: Landlords in Virginia must return security deposits within 45 days after the lease ends or the tenant moves out. If deductions are made (e.g., for damages or unpaid rent), these must be itemized and included with the returned amount.
- Deductions: Landlords cannot deduct for normal wear and tear, routine cleaning, or minor repainting. Deductions are only allowed for legitimate damages beyond normal use, unpaid rent, or breaches of the lease. If deductions are made during the lease term, the landlord must notify the tenant within 30 days.
- Inspection Rights: Tenants have the right to attend the final inspection. After giving notice of their intent to move out, landlords must notify tenants within 5 days of their right to attend. Inspections must happen within 72 hours after the property is vacated if the tenant requests it in writing.
- Penalties for Non-Compliance: If a landlord doesn’t return the security deposit or provide an itemized list of deductions within the required 45 days, the tenant can sue for up to double the deposit amount, along with potential damages and attorney fees.
- Ownership Changes: If the rental property is sold, the new owner inherits responsibility for security deposits. Tenants must be notified of the transfer and the new owner's contact information.
- Record-Keeping: Landlords are required to maintain detailed records of security deposit transactions for two years and must provide this information to tenants upon request. Keeping these records organized helps avoid disputes.
Bottom Line
Ultimately, Virginia security deposit laws in 2024 are designed to create a fair process for both landlords and tenants. Staying informed and following these regulations can help both parties avoid disputes and ensure a smooth rental experience.
