Florida Security Deposit Laws
Landlords in Florida charge a security deposit to help protect themselves against financial damage that can occur as a result of renting out their property, as per Florida's security deposit law. The following are ways in which you may suffer financial damage.
• When a tenant causes property damage and moves out without fixing them. Examples of such property damage include torn curtains, holes in walls, and burns on carpet under Florida's security deposit law. The damage, however, must exceed normal wear and tear.
• When a tenant stops paying rent. If your tenant stops paying rent without a legally justified reason, you may be able to use part or all their deposit to cover your losses.
• When a tenant breaks the lease without a legally justified reason. Breaking a lease is a serious violation of the agreement. In the absence of a legally justified reason, such as a military deployment, you’d be able to make appropriate deductions on their deposit.
• When a tenant fails to clear their utility bills when moving out. Naturally, some utilities will be in your tenant’s name. And when moving out, it’ll be their responsibility to make sure they have cleared them. If they don’t, you’d be able to make the appropriate deductions from their deposit.
• When a tenant abandons the rental unit. A tenant can also choose to abandon your rental unit for whatever reason. However, just because they have doesn’t mean they are off the hook when it comes to their lease responsibilities, like paying rent.
With that in mind, there are rules that you must follow when charging security deposits. The following is a basic overview of the Florida security deposit law according to the state's landlord-tenant law.
Florida Security Deposit Limit
Some states have limits on how much landlords can charge as a tenant's security deposit, but Florida isn’t one of these states. So, technically speaking, a Florida landlord can charge whatever amount they wish as their tenant's security deposit under the Florida statute.
However, all good Florida landlords realize that overcharging tenants with their security deposits isn’t an option. Overcharging your tenants will only serve to increase the vacancy rates, as prospective tenants will opt for rentals that are reasonably priced.
Generally, you should only charge a deposit that’s equivalent to one month’s rent. Under typical circumstances, this should help you cushion yourself against any potential financial damage.
Storage of a Tenant’s Security Deposit
In Florida, landlords are required to store their tenants’ security deposits in either of three ways under Florida statutes.
• Option #1: You can choose to store your tenant’s deposit in a normal account, also called a non-interest-bearing account. The non-interest-bearing account must be in a financial institution located in Florida. You must also not mix the deposit with other funds.
• Option #2: You have the option of storing your tenant’s deposit in an account that earns interest. And just like in the first option, it must be located in Florida. Also, the funds must be held separately; that is, not mixed with other personal funds.
• Option #3: You can also choose to post the deposit as a surety bond. The bonding company must be licensed to operate in Florida. Besides, you must post the surety bond in the county where your property is located.
If a Florida landlord fails to properly store a security deposit, they can be held liable.
Additional Pet Deposit
In addition to the normal security deposit, Florida landlords are also allowed to charge an additional pet deposit as per the Florida landlord-tenant law. The only exception to this is for disabled tenants who have service dogs or other types of service animals.
The Fair Housing Act requires landlords to ensure tenants with service dogs and emotional support animals have equal housing opportunity. So, requiring a disabled tenant to pay extra for their service dog would be tantamount to housing discrimination.
What happens in case of damage? In such a case, you should hold your tenant liable for such.
Security Deposit Receipt
Some states require landlords to notify their tenants immediately they receive their deposit. This is true in Florida. As a landlord, you have a responsibility to notify your tenant within 30 days of receiving their deposit. The written notice must be delivered either in person or via mail.
You must include the following things in the written notice.
• How you’re holding your tenant's security deposit. That is, the name and address of the financial institution, as well as whether the funds are kept separate or not.
• If in an interest-bearing account, the rate of interest that is accruing on an annual basis.
If you change the manner in which you’re holding the deposit, you’ll have 30 days to let your tenant know of the same.
Allowable Deductions on Security Deposits
As a landlord in Florida, you’re allowed to make deductions on your tenant’s deposit for any of the following reasons.
• If your tenant, for whatever reason, becomes unable to pay their rent, you can use your tenant's security deposit
• If your tenant causes damage exceeding normal wear and tear (you can also evict at times on these grounds)
• Any monetary damage that you suffer as a result of your tenant’s breach of the lease
• Charges that you’re allowed to make in the lease agreement. A lease termination fee is an example of soemthing allowed under the security deposit laws, but a lease termination fee isn't always included in the lease as well.
It's a good idea to do a walk-through inspection before and after the tenant has lived in the unit. This way, if a tenant objects, you have documentation of the state of the unit before and after the tenant lived there, as per the walk-through inspection. Make sure to take pictures during your walk-through inspection as it supports a landlord's claim of damage.
Returning a Tenant’s Security Deposit
When exactly to return security deposits depends on whether you’ve made deductions or not.
If returning the security deposit in full, you have exactly 15 days to return it to your tenant, alongside any accrued interest if you held the security deposit in an interest-bearing bank account.
If there are deductions to the security deposit, then you’ll have 30 days to let your tenant know of your intentions to withhold part or all the deposit. Of course, your tenant can choose to object to your claims or not. If they do, you could take the matter to a small claims court. The court will then have the final say.
If the tenant, however, doesn’t object, then you must return the remaining portion of the deposit to the tenant within 30 days after the initial written notice.
Sale of the Property
In the event the property changes hands, you must transfer the deposit (plus any accrued interest) to the incoming landlord. Next, you must create a written receipt indicating the amount transferred.
If you own a rental property in Florida, it's always best to be familiar with the local security deposit law. Since we know managing Florida landlord-tenant laws and Florida's security deposit law can be difficult for both a new and experienced property owner, consider getting in touch with our team at Best Rental Services!
We have the years of expertise and knowledge in the real estate industry to help you navigate both old and new regulations. Give us a call today and see how we can help your real estate investment reach its full potential!
Disclaimer: This information isn’t intended to be a substitute for professional legal advice. If you have a specific question, kindly get in touch with a qualified attorney or an experienced property management company for expert help.