Handling security deposits the right way is a big part of being a successful landlord in Virginia Beach. If you make mistakes, it can lead to legal trouble, unhappy tenants, or lost money.
At PMI S Hampton Roads, we help local landlords avoid common issues by following Virginia's rental laws and best practices. In this post, we'll cover five key mistakes to avoid when managing security deposits. Let's get started with these rental agreement tips.
1. Charging More Than Allowed by Law
Virginia law limits how much you can collect for a security deposit. You can't charge more than two months' rent. This rule applies to all residential leases.
Charging too much can lead to fines or legal claims from tenants. Always double-check the rent amount and stay within the legal limit to avoid problems later.
2. Not Putting the Deposit in the Right Place
Once you collect a security deposit, you must store it properly. In Virginia, the deposit must be kept in an escrow account in a financial institution. It must stay separate from your personal or business funds.
Mixing the deposit with other money is a common mistake and can make it harder to return the correct amount later. It's also against the law.
To stay organized, open a dedicated escrow account just for holding security deposits. Keep clear records of the amount collected and the account details in case of any disputes.
3. Failing to Provide a Written Statement
When a tenant moves out, you need to give them a written statement showing how the deposit was used. This should include deductions for unpaid rent, repairs, or cleaning, along with the remaining balance. Virginia law requires you to return the deposit (or send the statement and partial refund) within 45 days after the tenant leaves.
Skipping this step or providing unclear information can lead to complaints or lawsuits. Make sure your statement is detailed, accurate, and delivered on time.
4. Charging for Normal Wear and Tear
Another mistake landlords make is deducting money for normal wear and tear. This refers to small things like worn carpet, faded paint, or loose doorknobs, things that happen over time with regular use. You can't charge tenants for these.
However, you can deduct for actual damage caused by the tenant, like holes in the wall, broken fixtures, or pet stains. The difference can be tricky, so it helps to take photos before and after the lease and keep a move-in checklist for each unit.
5. Not Returning Security Deposits on Time
As noted above, Virginia law gives landlords 45 days to return the security deposit after lease agreements end. Missing this deadline is one of the most common issues landlords face. Tenants may file claims to recover the full deposit or additional penalties.
Set a reminder as soon as a tenant gives notice. Schedule the move-out inspection quickly and send the refund or itemized list as soon as possible. Being prompt shows professionalism and helps avoid legal trouble.
Landlord Tips: Let Us Help You Stay Compliant
Security deposits may seem simple, but there are rules you must follow to avoid fines and disputes. From storage to refunds, one small mistake can cause big problems.
At PMI S Hampton Roads, we help landlords across Virginia Beach handle deposits the right way. If you need help staying compliant with state laws and protecting your investment, contact us today. We're here to make property management easier and more reliable.
