Security Deposit Help

[Ashley Barlow]

Hi everyone! I need your help with something please. I own a house that I rent to a “tenant” that “tenant doesn’t actually live there, they then rent the house out as a short term rental. I get paid every month regardless of bookings and they keep the spread between the rent they pay and the profit from bookings. The original tenant signed the lease then a couple months later asked to add their business partner to the lease.

Everyone was on board and signed the lease addendum and we were all set. Moving forward a few months later tenant 1 fell off the face of the earth. Soon after tenant 2 was added I found out from tenant 2 that tenant 1 was hired to find short term rental opportunities for tenant 2 and the plan for them was to always have tenant 2 take over - this is all per tenant 2 - I still have heard nothing from tenant 1 in over a year.

Tenant 2 has become the primary contact and has been wonderful to work with. Anyhow, lease is expiring and they do not wish to renew. However, regarding the security deposit, tenant 1 paid the deposit, however now that they have fallen off the face of the earth tenant 2 is expecting it back. I told tenant 2 I would need tenant 1 to sign a release stating the security deposit may be returned to tenant 2. But, we can’t get in contact with tenant 1. What do I do with the security deposit? This is in Virginia.

I have received advice to write the check out to both tenants but they have separate out of state addresses, who would I send the check to?

And no unfortunately when we added tenant 2 to the lease it didn’t cross my mind at that time to put in writing how the security deposit should be handled.