Security Deposit Law
What Virginia landlords must do with security deposits — the cap, interest, return deadline, account rules, and penalties — with citations to the statute itself.
Verified as of June 15, 2026
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Deposit cap
Two months' periodic rent, maximum.
Interest
No interest is required on security deposits.
Return deadline
Itemized written notice and any refund due within 45 days after the tenancy ends or the tenant vacates, whichever is later.
Virginia caps security deposits at two months' periodic rent, no matter what the charge is called. A related rule bars lease provisions requiring a tenant to pay a security deposit plus damage-insurance and renter's-insurance premiums before move-in that together exceed two months' rent.
The current Virginia security deposit statute contains no requirement to pay or accrue interest on deposits, so landlords may hold deposits without crediting interest to the tenant.
The deposit and all deductions, damages, and charges must be itemized in a written notice given to the tenant, together with any amount due, within 45 days after the termination date or the date the tenant vacates, whichever occurs last. With multiple tenants, disposition is by one check payable to all tenants sent to a forwarding address one of them provides. If damages exceed the deposit and require a third-party contractor, the landlord must say so in writing within the 45 days and then gets an additional 15-day period to itemize the damages and repair cost.
Virginia does not require security deposits to be held in a separate or escrow account. By contrast, prepaid rent must be placed in an escrow account in a federally insured depository by the end of the fifth business day after receipt — so do not confuse the two buckets.
If a landlord willfully fails to comply with § 55.1-1226, the court must order the deposit returned to the tenant together with actual damages and reasonable attorney fees — unless the tenant owes rent, in which case the court orders an amount equal to the deposit credited against the rent due.
Virginia is a Dillon Rule state and the VRLTA applies statewide; no locality-specific security deposit caps, interest rules, or return deadlines were identified in any Virginia city or county ordinance.
You cannot require a deposit plus damage-insurance and renter's-insurance premiums before move-in that together exceed two months' rent. If you offer damage insurance in lieu of a deposit, the provider must be SCC-licensed and the tenant can switch back to a cash deposit at any time without your consent.
Send the itemized written disposition and any refund within 45 days of termination or vacancy (whichever is later). If damages exceed the deposit and require a third-party contractor, give written notice within the 45 days and you get 15 more days to itemize.
If you deduct from the deposit during the tenancy, you must notify the tenant in writing within 30 days of determining the deduction, itemized. You must also keep itemized deduction records for the preceding two years and let the tenant inspect them during business hours.
When you ask the tenant to vacate, or within five days of receiving the tenant's notice of intent to vacate, you must give written notice of the tenant's right to be present at your move-out inspection. If the tenant asks to attend, the inspection must occur within 72 hours of delivery of possession, followed by a written disposition statement with an itemized damage list.
2026 Acts of Assembly chapter 722 (HB 1005) requires landlords to accept payment of periodic rent and any security deposit by check and money order, and where a payment-processing fee is charged, it cannot exceed the actual out-of-pocket cost a third party charges the landlord to process a credit/debit/electronic payment. Landlords with four or fewer rental units (or up to a 10% interest in four or fewer) remain exempt only from having to accept debit or credit cards.
2026 Va. Acts c. 722 (HB 1005), amending Va. Code §§ 55.1-1204 and 55.1-1208
If the tenant never provides a forwarding address, you may hold the deposit in escrow; one year after the end of the 45-day window you may remit it to the State Treasurer as unclaimed property on the prescribed form.
Willful failure to comply means the court orders the deposit returned plus actual damages and reasonable attorney fees (offset only if the tenant owes rent).
The provision is unenforceable, and if you sue to enforce it the tenant can recover actual damages and reasonable attorney fees.
That is noncompliance with § 55.1-1226; willful noncompliance triggers court-ordered return of the deposit plus actual damages and attorney fees.
The inspection-rights notice is mandatory, and the tenant can later use the move-out report as evidence against damage claims you raise after disposition.
Both violate § 55.1-1204(J) as amended by 2026 c. 722, exposing you to VRLTA remedies; update your payment policies before the effective date.
Two months' periodic rent, however the charge is denominated. A pet deposit or any other refundable move-in deposit counts toward the same two-month ceiling, and pre-tenancy deposit-plus-insurance-premium combinations above two months' rent are prohibited lease provisions.
45 days after the termination date of the tenancy or the date the tenant vacates, whichever occurs last. You must send an itemized written notice of all deductions together with any refund due. If damages exceed the deposit and require a third-party contractor, written notice within the 45 days buys you an additional 15 days to itemize.
No. The current statute, Va. Code § 55.1-1226, contains no requirement to pay or accrue interest on security deposits.
Accrued rent including reasonable late charges specified in the lease, damages from the tenant's noncompliance with § 55.1-1227 less reasonable wear and tear, other damages or charges provided in the rental agreement, and actual damages for breach. With prior written notice you may also withhold a reasonable portion to cover the tenant's unpaid final water, sewer, or other utility bills owed to a third-party provider.
No — there is no escrow or segregation requirement for security deposits. But prepaid rent is different: it must be placed in an escrow account in a federally insured Virginia depository within five business days of receipt under § 55.1-1205.
Under 2026 Acts of Assembly chapter 722 (HB 1005), landlords must accept payment of periodic rent and any security deposit by check and money order, and any payment-processing fee cannot exceed the actual out-of-pocket cost charged to the landlord by a third-party processor. Landlords with four or fewer units are exempt only from having to accept debit or credit cards. The deposit cap (two months) and the 45-day return deadline are unchanged.
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Statute facts on this page were verified against the cited official sources on June 15, 2026.
Tenvale tracks deposits, interest, and deadlines for you — free for 30 days, no credit card required.
See full pricing and other states.