As a landlord in Florida, you have the right to ask your tenants for a security deposit as part of any move-in costs. But this is governed by the Florida security deposit law.
In so doing, however, you must abide by Florida’s security deposit laws. Including, how you must store the security deposits, what you can use it for, and when you must return it back to your tenant.
At Keyrenter South Florida we believe Florida landlords should fully understand these security deposit laws, so the following is a basic overview of the Florida Deposit Laws.
Are There Florida Security Deposit Limits a Landlord Can Ask of Their Tenant?
The short answer is no!
As per the statewide landlord-tenant laws, there are no statutes that cap the value of the security deposit a landlord can ask of a tenant when moving in. But an effective landlord shouldn’t use this as an opportunity to overcharge your tenant.
Overcharging your tenant may only complicate your efforts to fill a vacancy in your rental property and can be a real problem in property ownership. But undercharging may leave you with less financial cushion against potential issues.
Generally speaking, requiring either a month or two month’s rent as a security deposit should be enough to cover potential things like property damage, and vacancy costs.
Even though there are no laws governing the value of the security deposit you can charge, you must be consistent. Charging different security deposits based on the individual prospects’ circumstances could be a breach of the Fair Housing Act. So, make sure that your deposits are consistent, no matter who is paying them.
How should you store your tenant’s security deposit in Florida?
You have three options for storing a tenant’s security deposit in Florida:
- You can store the deposit in a non-interest-bearing account. The non-interest-bearing account must be registered in Florida, and the funds must not be commingled with others.
- You could also store the security deposit in an interest-bearing bank account. You must pay the tenant any interest accrued on the deposit on an annual basis or at the end of the lease.
- The third option is to post a surety bond for the deposit amount, or $50,000, whichever of the two options is less. This post must be registered in the same county in your rental property is situated. Additionally, you must pay the tenant an annual interest of 5% on the bond.
Do you need to provide a written notice after receiving a tenant’s deposit?
Yes. Once you receive your tenant’s deposit, you must notify them within 30 days of receiving their security deposit. In the initial written notice, you must include the following details:
- The name and address of the financial institution that stores your tenant’s security deposit – especially if it’s an interest-bearing account.
- Whether you’re storing the funds separately, in a surety bond, or whether you’re commingling them with other funds.
- If it’s a separate interest-bearing account, then the rate at which the tenant’s deposit is accruing interest rate (if you choose that storage option).
Once you have included all this important information, you must deliver the notice either by certified mail or in person. Should you need to change where you are holding the funds, you must notify your tenant where it is stored.
What are the allowed reasons for deducting a tenant’s security deposit in Florida?
As per Florida statute, you can make deductions to a tenant’s deposit for the following reasons.
- To cover any past due rent your tenant owes you.
- To cover unpaid utility bills.
- Cover the cost of damage exceeding wear and tear.
- To cover costs from other violations of the lease, such as a lost month’s rent.
If the tenant objects to the landlord’s claim then you must follow Florida landlord-tenant laws to resolve the matter. A security deposit can rarely cover things like attorney fees or advance rent payment.
What is the difference between Wear and Tear versus Damage?
A tenant may have the understanding that they have left the unit clean and in pristine condition, but the Florida landlord may disagree. As a result, the tenant may only end up getting a fraction of their security deposit back.
The tenant may file a lawsuit in a small claims suit citing the landlord has wrongfully withheld their deposit. So, understanding the major differences between what constitutes Normal Wear and Tear versus Damage is key. As you can only make deductions to a tenant’s deposit for damages exceeding normal wear and tear.
Do Florida tenants have a right to a walk-through inspection?
No, unlike some other states, Florida tenants don’t have a right to a walk-through inspection before vacating.
When must Florida landlords return their tenant’s security deposit after they move out?
If there are no deductions, you must return your tenant’s deposit (or whatever of it remains) within 15 days of lease termination. If the tenant is evicted, this process may change, in which case it is best to consult a legal professional or property management company.
If there are deductions to the security deposits, you’ll have up to 30 days to notify the tenant about your intention to keep a portion of their deposit as per Florida Landlord-Tenant law. If you fail to do so, you’ll forfeit your right to keep any of the deposits as per security deposit law.
What should happen should the landlord sell the property?
If you sell the property, you must transfer the security deposits (plus any interest accrued) to the incoming landlord. You must also create a written receipt showing the amount of the security deposits you’ve transferred.
Understanding the Florida Security deposit rules is incredibly important for any landlord. So, if you have any further questions regarding this or any other aspect of property management. Please don’t hesitate to contact us!
Disclaimer: This blog isn’t a substitute for professional legal advice from an attorney. For expert advice, KeyRenter South Florida can help. We can make renting your home a hassle-free experience. Get in touch today to learn more!