account for security deposit

[elaov]

I am renting my house for the first time in Virginia and allowed my tenant to pay the security deposit in installments. The first came half a month late by certified mail with a sase demanding I supply a monthly statement of the account the security deposit is in saying it is her right to know what is happening with her money. Is this true? Should I just send her this information every month? And does she have to reside there 13 months after I receive the security deposit in order to receive the interest on it? I am not sure.
thank you

 

[lissa032]

Got this from a legal book, hope it helps.
"landlord must accrue interest at an annual rate equal to 1% below the Federal Reserve Board discount rate as of January 1 each year, on all money held as security. No interest is payable unless the landlord holds the deposit for over 13 months after the date of the rental agreement for continuous occupancy of the same unit. Interest begins accruing from the effective date of the rental agreement and must be paid only upon termination of the tenancy."

As to my opinion on this, first, you should tell the tenant as to what bank her security deposit is in. Second, you do NOT have to give her monthly statements regarding her money. Third, you only have to pay the tenant the interest that is earned on her security deposit money if she stays with you OVER 13 months and if she does, you only have to give her 1% interest.
According to Virginia law, you do not have to put it in a seperate account so, you could drop it into any account where you will get more than 1% interest and you will be able to keep all the interest if she moves out after a year.

 

[elaov]

Thanks for the info

 

[Cvillecpm]

VA Security Deposits

You don't have to say where it IS; however, you DO have to say who holds it. Rental agent, property owner, etc. Also, interest does NOT have to be paid if your lease is NOT under the VA Residential Landlord Tenant Act. You can utilize a common law lease, not be under VRLTA AND NOT have to pay interest OR tell tenant where deposit is/give statements, etc.

You made BIG mistake is not researching this information prior to signing up tenant and you should have decided which type of tenancy you would be offering.

 

[elaov]

Please explain the consequences of my mistake. I am sure if I tried to get the tenant to sign to common law lease, I would be paying my own mortgage.

 

[Cvillecpm]

VA leases * VRLTA v Common Law

What mistake?

In VA, your lease needs to clearly indicate which type of tenancy/lease YOU are choosing. If it is a SFR and you only own 1-4, you can select CL, if it is an apt or you own more than 4-10 units, then you must be under VRLTA.

Most landlords opt UNDER VRLTA - get special rules in eviction, etc and most judges rule according to VRLTA.

Current VRLTA interest is payable in 12 month increments at the end of the lease at 1% below FDR.