How To Handle Security Deposits

Northern Virginia has many laws that differ from other states. This article will highlight some of those that pertain to security deposits.

"Security deposit" means any refundable deposit of money that is furnished by a tenant to a landlord to secure the performance of the terms and conditions of a rental agreement, as a security for damages to the leased premises, or as a pet deposit.

However, such money shall be deemed an application deposit until the commencement date of the rental agreement.

One of the key things to remember as a landlord in Virginia, is that landlord MAY NOT demand or receive a security deposit, in an amount or value in excess of two months' periodic rent (2 month Maximum Deposit).

Also important to note is, contrary to popular belief, if a landlord discovers damage that was made by the tenant during the lease period and the tenant is still occupying the property, the landlord DOES NOT need to wait until the end of the lease to deduct the repair expense to correct the repair.

For Example: If the landlord or property manager conducts a property inspection (as they should) and discovers drywall damage made by the tenant.

i) The first step in this scenario is to notify the tenant in writing of such damage and the need for it to be repaired within 30 days.

ii) If the tenant refuses and or fails to make the necessary repairs, the landlord is able to deduct the cost of making such repairs, from the tenant’s security deposit.

iii) The landlord also has the right to pursue the tenant to reimburse the security deposit if funds are spent on their behalf (have tenant replenish the security deposit).

Important to mention is that security deposits must be given back to tenants within 45 days of the lease termination.

If the landlord uses any portion of the security deposit for repairs caused by the tenant, the landlord must provide a written itemized notice.

In the state of Virginia, the tenant must be granted permission to attend the final inspection within 72 hours of lease termination.

Happy Land-lording & Property Management!

Disclaimer: Refer to a real estate attorney and or The Virginia Landlord Tenant Act to confirm the laws mentioned above.

By: Kareem Fleming

Date: 1/19/14