Security Deposit Alternative in Virginia
Virginia caps a security deposit at two months' rent and gives you 45 days after the tenancy ends or the resident moves out, whichever comes later, to send an itemized statement and the balance. Fail that willfully and a court orders the whole deposit returned along with damages and the resident's attorney fees. Virginia also names damage insurance in the same statute as an alternative it recognizes, so the ground rules for offering one are written down rather than inferred.
What Virginia law says about security deposits
Read from the Virginia statute on 2026-09-09. Deposit rules change, and this is general information rather than legal advice. Confirm the current text with your own counsel before you change a lease.
Can you require it of every Virginia resident?
Virginia writes this arrangement into the deposit statute itself. Subsection I says a landlord may permit a tenant to provide damage insurance coverage in lieu of paying a security deposit, on five conditions: the provider is licensed or approved by the Virginia State Corporation Commission, the coverage starts on the first premium and runs the whole lease term, the per-claim coverage is at least what you would have required as a deposit, the provider agrees to approve or deny claims, and the provider tells you within ten days if the policy lapses or is canceled. Subsection J decides the mandatory question. A resident who starts on damage insurance may switch to paying the full deposit at any time, without your consent, and you may not alter the lease terms when they do. A program built on requiring the fee does not survive that sentence.
Fee-in-lieu provision: Code of Virginia 55.1-1226(I) and (J), read on 2026-09-09.
Rules differ by state and by city, and subsidized housing is its own question. This is general information for property managers, not legal advice. Get a written opinion before you make the fee a condition of tenancy anywhere.
How the program works in Virginia
The mechanics are the same in every state Beagle operates in. The program is designed to comply with applicable state and local regulations, and the rate is set by the deposit amount rather than by geography, so a Virginia property and one two states over are quoted the same way.
The resident chooses at signing
Instead of producing the full deposit, the resident pays a smaller non-refundable monthly fee that is billed with rent. Nothing is held, so nothing has to be returned.
The property keeps its protection
Damage beyond normal wear is reimbursed up to the deposit amount the unit would otherwise have required, so what you can recover does not shrink.
Move-out stops being a negotiation
A claim is filed against the program rather than deducted from money you are holding, which takes the itemised-deduction letter and the dispute that follows it off your team's desk.
You earn on every resident who takes it
You set an administrative fee on top of the premium, up to $5 per unit per month, and keep it.
Virginia security deposit alternative FAQs
No. The deposit statute lets you permit damage insurance in lieu of a deposit, but the same section says a resident who chooses it can switch to paying the full deposit at any time without your consent, and that you cannot alter the lease terms when they do. Offer it as a choice, and write the lease so the choice can actually be exercised.
See it on your Virginia units
Run the program against your own unit count, or walk through it with our team. No upfront fees, no onboarding charges, no long-term contracts.