Virginia Security Deposit Laws for 2024 | Deductions, Returns, & Rights

VA Code § 55.1-1226 is the primary governance documentation for the handling of security deposits. Owners of any rental property in the state, as well as property managers are expected to abide by the rules outlined.

The intention of the state to this end is to ensure that all parties in a rental agreement are adequately protected. You may also have a look at the security deposit section of the landlord-tenant laws and rights to get a clear idea of how security deposits are meant to be handled in the state.

Nevertheless, the information below should be a great resource to help you understand more on the matter.

But, before we dive into what those laws are…

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Now, let’s dive in. 

Maximum Deposit

According to Virginia landlord-tenant law, tenants cannot be charged an amount of more than two month's rent as a security deposit.

However, a landlord is allowed to ask for an additional pet deposit where necessary. This does not apply to disabled persons who may have a service animal.

This is because the Federal Fair Housing Act mandates that tenants who need service or emotional support animals should have an equal opportunity to both rent and enjoy homes.

Nevertheless, there are situations in which the service animal destroys the property. In such cases, Virginia landlords are allowed to recoup the cost of damages from tenants.

Allowable Deductions

Under Virginia security deposit law, a landlord can make several deductions from deposits. These are as follows:

1. Charges that are covered under the established rental agreement for the dwelling unit
2. Any unpaid rent as well as late payment charges that may have been established in the agreement
3. Any unpaid utility bills
4. Any damages or losses that are a direct result of the tenant's failure to comply with the established obligations
5. Any damages associated with a breach of the rental agreement

To make things a bit clearer, deductions from the security deposit are generally allowed in cases where the cost of losses exceeds those that would fall under the umbrella of normal wear and tear (covered later).

In cases where the damage to the rental property exceeds the tenant's security deposit, the landlord can notify the tenant of this within 45 days, which will allow an additional 15 days for the tenant to be provided with an itemized list of deductions being made against the deposit.

Deductions from Security Deposits During the Tenancy

In some cases, deductions from a tenant's security deposit during the tenancy are allowed. These are often covered under the lease agreement. If such charges are being applied, then, the landlord must provide the tenant with notice within 30 days of the date that the deduction amount was determined.

Deductions for Utilities

Water, utilities, and other bills often need to be covered and can be done using a portion of the security deposit. If this is the case, then the landlord must have provided the tenant with notice of tenant duties and rights in a termination notice. This must be provided at least 15 days before the use of the security deposit funds is allowed.

Check out our Virginia landlord-tenant law article to get more details on tenant rights and responsibilities in the state.

Once the payments for the utilities are made, the landlord will have 10 days in which to provide the tenant with a confirmation of the payments.

Additionally, the remaining balance of the amount withheld should be provided. Should the tenant have paid the utilities and can provide proof of same to the landlord, then the amount deducted for the utilities must be refunded.

Normal Wear & Tear

A Virginia landlord will often need to differentiate between damage to a property and normal wear and tear. The difference is as follows:

1. Damage speaks to any deterioration or destruction of the property because of negligence or abuse on the part of the tenant during the rental period. These actions will often cause issues that can affect the normal function, value, and usefulness of the property. A hole in the wall is an example of this.
2. Normal wear and tear speaks to the expected deterioration that is expected with the normal use of the property in instances where there is no negligence, carelessness, misuse, or accident caused by the tenant or any guests who may have been invited to the property. An example of this is fading wall paint.

Tenant Obligations

While Virginia security deposit laws make provisions for landlords to charge for repair costs, this can only be done if the tenant did not comply with specific obligations that would have been established. A tenant is required to:

1. Ensure the premises are kept clean and safe.
2. Remain compliant with all housing and building codes that have any bearing on health or safety.
3. Ensure that all regulations set out in the rental agreement are upheld.
4. Keep the property insect and pest free, while notifying the landlord if any such existence exists.
5. Ensure that all ashes, garbage, or rubbish, is removed safely and cleanly.
6. Use heating, ventilation, plumbing, electricity, etc, cleanly and reasonably.
7. Avoid deliberate or negligent defacement, destruction, or removal of any part of the premises.
8. Ensure that any plumbing fixtures are kept clean.
9. Maintain conduct that allows for neighbors' peaceful enjoyment of the premises (applies to both the tenant and any guests who may be invited).
10. Make no alterations to the property without notification to and approval from the landlord.
11. Ensure that any tenant-owned animal does not cause any property damage or any injury to a third party on the premises.
12. Keep the premises free from mold growth or moisture, while notifying the landlord if there are any visible amounts present.
13. Maintain any carbon monoxide alarms installed by the landlord.

Deposit Returns

Lack of a Forwarding Address

If a tenant does not provide a forwarding address, a Virginia landlord is only required to hold the deposit for a year after the 45 days following the timeline in which it is to be returned.

Failure to Return the Tenant's Security Deposit

Should a landlord fail to return the deposit when expected, Virginia's security deposit law may be required not only to pay it back to the tenant, but also to cover costs associated with damages, suit costs, and attorney's fees. However, a court may order a portion to be retained equal to the outstanding rent for the unit if applicable.

Time Frame

Once the lease has ended, Virginia landlords must return the security deposit within 45 days. Any deductions for unpaid utility bills, rent, or other applicable charges for the rental unit made must be identified in a written notice to the tenant in an itemized list.

Taxes

1. If there is a situation of unpaid rent or lease breach, the security deposit must be declared as income in the year it was forfeited.
2. Should Virginia landlords and their tenants agree to use the deposit as a part of the final month's rent, the applicable portion should be declared when received.
3. If the landlord uses the security deposit for coverage of chargeable expenses, only if the cost of expenses is included should the income be included.

Additional Rules

The final set of rules to bear in mind are as follows:

• Should the property be sold while a lease is active, it is the new property owner's responsibility to handle the security deposit requirements associated with the dwelling unit
• Inspection must be done within 72 hours of the move-out date, and Virginia law requires that the tenant be informed of the right to be present during the inspection
• Virginia's security deposit law no longer requires landlords to pay interest on deposits
• No receipt is required for any collected security deposit in Virginia
• There must be adequate records of all deductions made from deposits for the last two years, which should be available for the tenant or a representative to inspect during normal business hours.

The Bottom Line

Whether it's handling unpaid utility bills, adhering to the timeline for the return of the security deposit, etc., landlords must remain in compliance with Virginia law. Ensure you pay attention to all the nuances referenced above.