In West Virginia, the collection and return of security deposits are primarily regulated under the WV Code § 37-6A-2 These laws provide a set of rules that West Virginia landlords and property managers have to follow to protect all parties.
Maximum Security Deposit Charge in West Virginia
In West Virginia, there are no limits on how much a landlord may charge as a security deposit. Generally, landlords may charge between one and two months’ rent as a security deposit.
Additional Pet Deposits. Under West Virginia’s law, the landlord may ask for an additional pet deposit. However, people with disabilities who use service animals are entitled to full and equal access to housing. Thus, the tenant may not be discriminated against and the landlord may not require the tenant to pay extra to have a service animal. If the service animal causes damage to the rental unit, the tenant is liable to pay for any damages.
The Federal Fair Housing Act requires housing facilities to allow tenants who use service dogs and emotional support animals to have an equal opportunity to use and enjoy their home.
Allowable Deductions on Security Deposits in West Virginia
The landlord may use the security deposit to make deductions only after the tenant has vacated the premises. Deductions should only be made for specific reasons, which include:
- Unpaid rent.
- Costs of damage caused by the tenant’s failure to comply with obligations as a tenant but not those considered to be standard wear and tear.
- Unpaid utilities owed to the service provider or landlord directly.
- Costs of cleaning the premises so that it is in the same condition at the beginning of tenancy.
- Costs of removing and storing abandoned property from the unit.
- Other deductions outlined in the lease agreement.
Can the deposit be used by the tenant as last month’s rent? The deposit may be used as the last month’s rent only if both parties agree in the lease agreement. Otherwise, the security deposit should be handled separately from any rent balance left outstanding.
“Normal Wear and Tear” vs. Damage in West Virginia
- “Normal Wear and Tear” is defined as deterioration that occurs as a result of use for which the rental unit is intended and without negligence, carelessness, accident, or misuse or abuse of the premises or contents by the tenant or members of his household, or their invitees or guests. It can include minor issues, such as gently worn carpets, loose door handles, fading wall paint and flooring, stained bath fixtures, lightly scratched glass and dirty grout that occur naturally as a result of the tenant using the property as it’s designed to be used.
- “Damage” refers to destruction to the rental unit that occurs because of abuse or negligence by a tenant during the course of the tenancy and can affect usefulness, value, normal function of the rental unit. Pet damage (heavily stained and ripped carpet), broken tiles, hole in the wall, broken windows and missing fixtures are all examples of damage.
Check out our article on wear and tear vs. damage to get a better idea of the difference.
The landlord can only charge the cost of repairs if the damage was caused by the failure of the tenant to comply with their obligations as a tenant. This obligation is to maintain the property and return it in the same condition it was received.
To comply with these obligations, the tenant must:
- Keep the premises, including all plumbing fixtures, clean and safe.
- Dispose of garbage and other waste in a clean and safe manner.
- Use all facilities (e.g., electrical, plumbing, heating, etc.) and appliances reasonably.
- Maintain smoke detection and/or carbon monoxide detection devices.
- Comply with the maximum number of persons allowed to occupy the premises.
- Leave the premises in the same condition it was in when it was handed to the tenant.
The tenant is also obligated not to perform certain actions during possession of the unit, such as:
- Change the locks on doors on the premises, except if necessary in an emergency.
- Destroy, damage, or remove parts of the premises.
- Unreasonably disturb the neighbor’s peaceful enjoyment of the premises.
- Engage in illegal activities involving prostitution, gambling, use of alcohol or controlled or prohibited substances, and other similar or illegal activities, or in activities promoting the same within the premises.
If the damage to the premises was caused by the tenant’s failure to comply with any of the above, then the landlord may take the cost of repairing it from the security deposit.
Returning Security Deposits in West Virginia
Time Frame: A West Virginia landlord has 60 days from lease termination to return any unused portion of the security deposit along with an itemized list of damages deducted. This period decreases to 45 days if the property is rented to a subsequent tenant, starting from the date of possession.
Excessive Damages: If the damages incurred during tenancy exceed the full sum of the security deposit and requires a third-party contractor, the landlord should provide the tenant with a written notice. In the event that the premises has excessive damage, the landlord has an additional 15 days to itemize costs and present the statement to the tenant.
Return Requirements: To comply with West Virginia legal requirements, a tenant’s security deposit must be either personally delivered, mailed to the tenant’s forwarding address (if provided), or mailed to their last known address. It is the responsibility of the tenant to provide a forwarding address.
Non-Deliverable Mail Holding: If the security deposit cannot be returned to the provided address of the tenant, the landlord must hold the deposit for six months before recovering it. During this time, they must deliver the deposit within 72 hours of receiving a request from the tenant at the landlord’s place of business during business hours. (WVC § 37-6A-2 (g))
Failure to Return Security Deposit as Required: If the landlord refuses or fails to return the security deposit within the 45 or 60 day limit, the tenant stands to recover the withheld funds, plus damages equal to one and a half times the withheld sum and any legal fees associated with recovering the deposit in court if the withholding is considered willful and negligent. Tenants can sue landlords in Small Claims Court or otherwise known in West Virginia as “Magistrate Court” for the return of their deposit, up to a dollar amount of $5,000.
Security Deposits and Tax Filing in West Virginia
Whether a security deposit will be treated as taxable or not depends on if the deposit is used or returned.
Taxable Income: Security deposits are not automatically considered income upon collection at the beginning of tenancy. They only become taxable income when the landlord no longer has any obligation to refund them (such as for settling damages incurred). At this point they may also qualify as a write-off for tax purposes as well.
Reporting Security Deposit as Income: Whether or not security deposit should be reported as income and when to do so will depend on what it is being applied to or used as. Below are three simple rules the IRS has suggested:
- If the deposit is forfeited due to a breach of the lease or applied to unpaid rent, then the amount kept should be declared as income in the year it was forfeited or applied.
- If the security deposit is used to cover expenses that are chargeable to it, then the landlord should only include the part of the deposit used as income if the landlord includes the cost of repairs as expenses. If the landlord doesn’t include them as expenses as a matter of practice, then there’s no need to include the part of the deposit kept to cover them as income.
- There is an agreement between the parties to use the deposit or part of it as the final month’s rent, then the landlord should include it as income when the same is received.
Record Keeping Requirements in West Virginia
West Virginia landlords are required to keep record of all itemized deduction statements that they have used to make deductions to a security deposit for a term of one year. During this period, the tenant or their agent may submit a written request to review or receive a copy of the record. Within 72 hours of receipt, the landlord should comply with the request. (WVC § 37-6A-3)
Additional Rules & Regulations in West Virginia
Receipt Requirements: The landlord is not required to provide a receipt for the security deposit in West Virginia.
Security Deposit Holdings in West Virginia: West Virginia laws do not require landlords to hold security deposits separate from other funds.
Security Deposit Interest in West Virginia: West Virginia laws do not require landlords to provide interest on held security deposits.
Sublessee Deposit: A West Virginia landlord may only hold a single deposit in compliance with security deposit law. (WVC § 37-6A-2 (f))
Application of Deposit Against Unpaid Rent: A court of law or otherwise cannot construe that a tenant is entitled to an immediate credit against his/her delinquent rent account in the amount of the security deposit at the time of tenancy termination. (WVC § 37-6A-2 (d))
Prohibited Provisions: A rental agreement may not require a tenant to agree to waive or forego rights or remedies established under state security law. If there is a prohibited provision in the rental agreement, it is unenforceable even if the agreement is signed and the landlord becomes liable to cover damages relating to illegally enforcing it.
New Property Owner’s Responsibility: If the original landlord decides to sell or transfer ownership of the rental property, the new landlord (or whoever holds the landlord’s interest in the premises at the termination of tenancy) assumes responsibility for its return. They must comply with all security deposit laws in their return of the security deposit that were established at the commencement of tenancy. (WVC § 37-6A-2(e))
For additional questions about security deposits in West Virginia, please refer to the official state legislation, West Virginia Landlord-Tenant Statutes.