2006 Code of Virginia § 55-248.15:1 - Security deposits

55-248.15:1. Security deposits.

A. A landlord may not demand or receive a security deposit, howeverdenominated, in an amount or value in excess of two months' periodic rent.Upon termination of the tenancy, such security deposit, whether it isproperty or money, plus any accrued interest thereon, held by the landlord assecurity as hereinafter provided may be applied solely by the landlord (i) tothe payment of accrued rent and including the reasonable charges for latepayment of rent specified in the rental agreement; (ii) to the payment of theamount of damages which the landlord has suffered by reason of the tenant'snoncompliance with 55-248.16, less reasonable wear and tear; or (iii) toother damages or charges as provided in the rental agreement. The securitydeposit, any accrued interest and any deductions, damages and charges shallbe itemized by the landlord in a written notice given to the tenant, togetherwith any amount due the tenant within 45 days after termination of thetenancy and delivery of possession.

Nothing in this section shall be construed by a court of law or otherwise asentitling the tenant, upon the termination of the tenancy, to an immediatecredit against the tenant's delinquent rent account in the amount of thesecurity deposit. The landlord shall apply the security deposit in accordancewith this section within the 45-day time period.

The landlord shall notify the tenant in writing of any deductions provided bythis subsection to be made from the tenant's security deposit during thecourse of the tenancy. Such notification shall be made within 30 days of thedate of the determination of the deduction and shall itemize the reasons inthe same manner as provided in subsection B. Such notification shall not berequired for deductions made less than 30 days prior to the termination ofthe rental agreement. If the landlord willfully fails to comply with thissection, the court shall order the return of the security deposit andinterest thereon to the tenant, together with actual damages and reasonableattorneys' fees, unless the tenant owes rent to the landlord, in which case,the court shall order an amount equal to the security deposit and interestthereon credited against the rent due to the landlord. In the event thatdamages to the premises exceed the amount of the security deposit and requirethe services of a third party contractor, the landlord shall give writtennotice to the tenant advising him of that fact within the 45-day period. Ifnotice is given as prescribed in this paragraph, the landlord shall have anadditional 15-day period to provide an itemization of the damages and thecost of repair. This section shall not preclude the landlord or tenant fromrecovering other damages to which he may be entitled under this chapter. Theholder of the landlord's interest in the premises at the time of thetermination of the tenancy, regardless of how the interest is acquired ortransferred, is bound by this section and shall be required to return anysecurity deposit received by the original landlord and any accrued interestthat is duly owed to the tenant, whether or not such security deposit istransferred with the landlord's interest by law or equity, regardless of anycontractual agreements between the original landlord and his successors ininterest.

B. The landlord shall:

1. Accrue interest at an annual rate equal to one percentage point below theFederal Reserve Board discount rate as of January 1 of each year on allproperty or money held as a security deposit. However, no interest shall bedue and payable unless the security deposit has been held by the landlord fora period exceeding 13 months after the effective date of the rental agreementor after the effective date of any prior written or oral rental agreementswith the same tenant, for continuous occupancy of the same dwelling unit,such security deposit earning interest which begins accruing from theeffective date of the rental agreement, and such interest shall be paid onlyupon termination of the tenancy, delivery of possession and return of thesecurity deposit as provided in subsection A;

2. Maintain and itemize records for each tenant of all deductions fromsecurity deposits provided for under this section which the landlord has madeby reason of a tenant's noncompliance with 55-248.16 during the precedingtwo years; and

3. Permit a tenant or his authorized agent or attorney to inspect suchtenant's records of deductions at any time during normal business hours.

C. Upon request by the landlord to a tenant to vacate, or within five daysafter receipt of notice by the landlord of the tenant's intent to vacate, thelandlord shall make reasonable efforts to advise the tenant of the tenant'sright to be present at the landlord's inspection of the dwelling unit for thepurpose of determining the amount of security deposit to be returned. If thetenant desires to be present when the landlord makes the inspection, he shallso advise the landlord in writing who, in turn, shall notify the tenant ofthe time and date of the inspection, which must be made within 72 hours ofdelivery of possession. Upon completion of the inspection attended by thetenant, the landlord shall furnish the tenant with an itemized list ofdamages to the dwelling unit known to exist at the time of the inspection.

D. If the tenant has any assignee or sublessee, the landlord shall beentitled to hold a security deposit from only one party in compliance withthe provisions of this section.

(2000, cc. 760, 761; 2001, c. 524; 2003, c. 438.)