One of the most important aspects of having a tenancy as a landlord is the security deposit. While quite a useful buffer for incidences on the property, it’s very important to know how and when to use a security deposit as well as returning it. Vermont has very important procedures to handling the security deposit, so it is best to follow them as closely as possible.

Vermont has no limit as to what a landlord can ask for as security deposit, though many landlords ask for an amount between one to two months’ rent. Per 9 V.S.A. § 4461, you, the landlord, may apply charges to the security deposit for any of the following: nonpayment of rent; damage to property of the landlord (except for by wear and tear or resulting from actions or events beyond the control of the tenant); nonpayment of utility or other charges which the tenant was directed to pay directly to you or a utility; and expenses required to remove from the premises property abandoned by the tenant.

The end of the tenancy is where you need to pay the closest attention. When returning all or a portion of the security deposit, you must return it with a written statement itemizing any deductions from the total to the tenant within 14 days from the date the tenant has vacated the premises (with a notice to quit), or, in an abandonment, when the landlord has received notice of the tenant’s having vacated the premises. Vermont also has language referring to rentals that are seasonal or intended to not be the primary residence of the tenant (i.e. vacation home, hunting camp). In these cases, the security deposit and written statement must be returned to the tenant within 60 days after notice to quit or abandonment.

Security deposits in Burlington

Burlington has more regulations to comply with regarding security deposits. Any rental property that is within the city limits and is subject to the municipal code is subject to these regulations.

The security deposit must not exceed one month’s rent and must be held in an interest-bearing account, and it may not be used to cover last-month’s rent. In addition, you, the property manager, may require a pet deposit, if applicable, equal to one-half month’s rent. You and the tenant are required to provide and sign a condition of the premises list of existing damage to the premises that must be retained by both parties for when your tenant vacates the premises.

When the tenancy is terminated, you are required to return all or a portion of the security deposit as well as a written statement itemizing any deductions from the security deposit as well as informing the tenant of the opportunity to appear before the Burlington housing board of review. The time line for mailing the written statement and the tenant’s intent to dispute the amount returned is the same for rental properties outside of Burlington. The difference here is that the tenant may, within 30 days of receipt of the itemized statement, request a hearing before the Burlington housing board of review to dispute the amount returned.