Vermont Security Deposit Collections & Holdings

Vermont Security Deposit Collections & Holdings

Last Updated: April 4, 2023 by Ashley Porter

To learn about laws on security deposit returns in Vermont, click here.

Maximum Security Deposit Allowed in Vermont

Vermont state law does not limit the maximum security deposit, but local jurisdictions can establish their own limits. For example, Burlington and Brattleboro limit the maximum security deposit to one month’s rent.

Can Landlords Charge an Additional Pet Deposit in Vermont?

In Vermont, landlords can charge a pet deposit, except for service dogs and emotional support animals. There is no limit to the maximum pet deposit by state law, but local governments can establish their own rules. For example, the maximum pet deposit in Burlington and Brattleboro is one-half month’s rent.

How Much Rent Can a Landlord Collect Upfront in Vermont?

There is no limit on the amount of rent that can be collected upfront in Vermont. Many states have a limit on the amount of rent that can be collected at once, but Vermont does not. However, local governments may enact different rules.

Landlords in Burlington  and Brattleboro  can collect the first month’s rent in advance. However, they can only collect one additional month’s rent in advance, whether called a “security deposit” or “last month’s rent,” unless the tenant has a pet.

Security Deposit Collections in Vermont

While other states have additional requirements for landlords that collect a security deposit, such as providing certain documentation of the condition of the unit at move-in, Vermont does not. However, cities and towns may establish their own rules.

Do Landlords Have to Provide a Receipt for the Security Deposit in Vermont?

Although some states like Washington require a receipt, landlords are not required to provide a receipt for the security deposit in Vermont.

What Obligations Do Landlords Have to Establish the Condition at Move-in in Vermont?

Vermont law does not have specific obligations before a tenancy. While other states like Washington have pre-tenancy obligations like a written inventory of damages, Vermont does not. However, cities and towns may enact their own rules, like in Burlington.

Landlords in Burlington must provide a list of existing damage to the rental unit. The list must be signed by the landlord and tenant.

Security Deposit Holdings in Vermont

Vermont law does not require landlords to hold security deposits separate from other funds. Some other states mandate how and where security deposits are held, but Vermont does not.

A Burlington ordinance instructs landlords to hold security deposits in interest-bearing accounts. However, state law prohibits rules limiting how security deposits may be held, so it is unenforceable.

Are Tenants Entitled to Interest on Their Security Deposit in Vermont?

Vermont law does not require landlords to provide interest on held security deposits. However, state law allows local governments to establish their own rules regarding interest.

Burlington landlords are required to provide interest on held security deposits. The minimum rate is equal to the current interest provided by a Vermont bank passbook savings account.

How Are Security Deposits Accounted for in Vermont?

Security deposits are not considered taxable income when they are collected.

What Happens to a Security Deposit When the Property is Sold in Vermont?

When a property is sold in Vermont, the seller must transfer the security deposit to the new owner, who must handle it according to the same rules. The new landlord must notify each tenant of the transfer and provide their name and address.

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Security Deposit Collections in Other States