Security deposit requirements can be confusing for landlords, but you have to be very precise in how you handle them and return them. There are specific legal requirements in Virginia law that dictate how long you have to return the deposit and what you must do when you withhold money from it.
Security Deposit Timeframe
According to Virginia law, landlords have 45 days from the date a tenant moves out to return the security deposit. If you do not return the deposit within that timeframe, the tenant can take you to court and sue you for the entire deposit as well as punitive damages that can total up to $5,000.
In Virginia, your tenant has the right to be present when you conduct the final inspection of the property. At this point, you are looking for evidence of damage or problems that might require you to make deductions from that security deposit. Make sure you give your tenants the opportunity to join you during this inspection.
Damage and Wear and Tear
When you’re determining how much money to keep out of the deposit, you’ll need to make sure you aren’t trying to charge the tenant for what the courts would consider normal wear and tear. For example, small nail holes in the wall from pictures that were hung are considered wear and tear. You wouldn’t withhold any money for that. However, if there are large holes in the walls that need a contractor to repair, that’s considered damage and the cost of the contractor can be paid from the tenant’s deposit. If the carpet is worn in high traffic areas, that’s probably wear and tear. But a large stain or tearing from a pet would be considered damage.
When you return the security deposit, make sure you include an accounting that reflects how much money was withheld and why. Provide copies of receipts and invoices so you can show that the work was done and the security deposit money was used to pay for it.
Handling a tenant’s security deposit is a major landlord responsibility. Remember that it is the tenant’s money, and you cannot spend it during the course of the tenancy. If you have any questions about how to handle the legal return of a tenant’s security deposit, contact us at ARMI Property Management. We’d be happy to help you.