“3 Is A Magic Number” For Virginia Landlords

By Brent J. Schultheis, Esquire

Schoolhouse rock

The canon of Schoolhouse Rock, that pillar of musical education, offers many lessons that continue to enlighten and entertain. One of the gems from its songbook is critical if you own and lease residential property in Virginia: “3 Is A Magic Number.”

Three is important because it’s when you, generally, become subject to the Virginia Residential Landlord and Tenant Act (VRLTA). The VRLTA excludes many types of rental relationships from its provisions (for example, college dormitories). But the most important exemption to the average landlord is this one: “Occupancy in single-family residences … where the owners … own in their own name no more than two single-family residences subject to a rental agreement.” In simpler terms, if you have three or more properties subject to a rental agreement, then the VRLTA will apply to your leases – whether you say so or not.

Why does this matter? Because the VRLTA imposes a number of restrictions not applicable to non-VRLTA (a/k/a “common law”) leasing. Many of the VRLTA’s provisions are tenant-favorable and impact important landlord rights. Some examples are:

  • Security deposits – Where the common law has virtually no rules or limits regarding security deposits, the VRLTA has several. The amount of the deposit in a VRLTA lease cannot exceed two months’ rent. The landlord must also adhere to strict recordkeeping and time requirements for deducting from the deposit and returning it.
  • Delivering possession – The common law places the risk on the new tenant if an old one refuses to leave: the landlord is not required to deliver ‘actual’ possession at the start of term, only the right to possession, which the new tenant must use to evict the squatter. But in a VRLTA lease, the rent abates if the landlord “willfully fails” to deliver actual possession, and the new tenant has the option to terminate the lease with five days’ notice if possession isn’t delivered.
  • Accelerated rent – If the tenant defaults, a carefully written common law lease can make him immediately liable for all rent due through the remainder of the term. The VRLTA limits you to rent you have actually lost by the time of judgment, and requires you to limit those losses by seeking a new tenant.

So when you’re deciding whether to lease a third rental property, keep your Schoolhouse Rock in mind. If you already rent out three or more, call counsel to make sure your leases comply with the VRLTA and keep you protected.



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