As a landlord, collecting a security deposit from your tenants can benefit many different aspects of your rental property business. The funds in a security deposit can help landlords cover the cost of a wide variety of issues that may be caused by a tenant, which can prevent financial loss for any landlord.
The following are things that a security deposit can help you cover the cost of:
- Unpaid utilities: When a tenant is occupying your rental home, most, if not all, of the utilities will be paid for by the tenant and registered under their name. If they fail to pay the utility bills for the property, then the landlord may use the security deposit to cover the cost when the tenant moves out.
- Excessive cleaning costs: In most lease agreements, it is made clear that it is the tenant’s responsibility to maintain a sanitary and safe environment within the rental home. Unfortunately, not all tenants do this. If the property is left in a state of extreme uncleanliness, you may use the security deposit to pay for cleaning.
- Unpaid rent: When a tenant fails to pay their rent, that is considered a breach of the rental contract. If a landlord finds themselves in this situation, a security deposit can help cover the cost of lost funds.
- Lost income: Sometimes, tenants decide to break a lease early or just abandon the rental property and lease altogether. When a tenant does this, it can result in lost income for you, in addition to other unexpected costs related to filling a vacant property. Security deposits may help you to cover these costs.
- Excessive damage to the property: If your tenant chooses to neglect or abuse the home, this can cause damage that is costly and time-consuming to repair. Collecting a security deposit from tenants is a great way to make sure that you always have the funds to cover any repairs that may be necessary.
Now that you are aware of the many benefits of collecting a security deposit from your tenants, let’s discuss the laws regarding these deposits in the state of Virginia. Each state has its own set of rules when it comes to landlord-tenant laws, and Virginia is no different! Keep reading for your guide on Virginia’s security deposit laws.
Security Deposit Laws in Virginia: Overview
Virginia’s Security Deposit Limit
In Virginia, the maximum amount that a landlord can charge a tenant for a security deposit is two months’ rent. However, a landlord may charge an additional pet deposit if the tenant has a pet that is not a service animal.
Storing Security Deposits in Virginia
Many states have regulations that dictate how a landlord must store a tenant’s security deposit during the time of the tenancy. Virginia, however, does not specify where these funds should be kept.
Written Notice After Security Deposit Receipt
Many states require the landlord to provide tenants with written notice after receiving their security deposit. However, a landlord in Virginia is not obligated to do this.
Reasons to Withhold Funds from a Tenant’s Security Deposit
A landlord in Virginia may deduct funds from their tenant’s security deposit for a variety of reasons. These reasons include the following:
- The tenant fails to make their rent payments.
- The tenant fails to pay their utility bills.
- The tenant causes damage to the property beyond normal wear and tear by failing to follow their obligations as defined in the lease agreement.
- Charges that were mentioned in the lease agreement.
- The cost of damages for a breach in the rental agreement contract.
It is important to note that a landlord may only use funds from the tenant’s security deposit to make repairs caused by damage beyond normal wear and tear. But what exactly is the difference between damage and normal wear and tear?
Well, normal wear and tear is typically deterioration of the property that was caused from being used for its intended purpose over time. This usually includes minor issues like worn-out carpets, loose door handles, faded paint, or old appliances that have stopped functioning properly.
Damage, however, refers to issues on the property that have been caused by a tenant neglecting or abusing the home over the duration of their tenancy and failing to uphold their responsibilities of the lease agreement.
Examples of damage caused by a tenant include holes in walls, pet damage, broken tiles, broken windows, and allowing mold or mildew to grow in damp places.
At the end of the lease period, a walk-through inspection must be conducted by the landlord. The tenant has the legal right to be present for this inspection if they want to.
The walk-through inspection must be conducted within 72 hours of the tenant’s move-out date. After the inspection has been completed, the landlord must provide the tenant with an itemized list of any damages that were found on the property.
Returning a Security Deposit in Virginia
Once the tenant has vacated the property, the landlord will have 45 days to return the security deposit or what is left after deductions. If any deductions have been made, the landlord must provide an itemized list including all the deducted costs and the total of the remaining funds.
Change in Ownership of the Property
What happens to the security deposit if the property changes ownership? In this case, the new owner would take on the previous owner’s existing security deposit obligations, including the task of returning the security deposit after the end of the tenancy.
Now you know more about the security deposit laws and regulations in the state of Virginia! If you have further questions on this topic or any other aspect of managing your rental property, don’t hesitate to contact our professional and knowledgeable team here at Keyrenter Chester!
Disclaimer: This blog should not be used as a substitute for legal advice from a licensed attorney in your state. Laws change, and this post might not be updated at the time of your reading. Please contact us for any questions you have in regards to this content or any other aspect of your property management needs.