Security deposits are a crucial part of the leasing process as are their Florida security deposit laws. Security deposit laws serve as a financial safety net if tenants damage your rental property, fail to pay rent, or leave your unit excessively messy after they move out. Having this financial buffer makes it easier to maintain a rental property's condition and ensure financial stability.
However, collecting a security deposit is not as simple as asking tenants for money before moving in. Landlords have to comply with Florida security deposit laws. Depending on the location of your rental, you may be limited to how much you can charge for a deposit or may have to store it in a separate interest bearing account.
If a landlord fails to follow these rules they will be legal repercussions. That’s why you should familiarize yourself with your local landlord-tenant regulations and Florida security deposit laws. In this article, the expert Dennis Property Management will go over everything you should know about Florida security deposit laws!
1. Security Deposit Limit
The amount of a security deposit that a landlord can demand from a tenant is capped in several states. Fortunately, the amount you can charge for a deposit in the state of Florida is unlimited. Charging at least the cost of one month's rent is a general rule of thumb.
On the other hand, if your rental property is furnished, you may charge extra. Generally speaking, the security deposit should be sufficient to compensate for any damage that a tenant may cause. But, you have the right to sue the previous tenant for more damages if the cost of the losses is higher than the security deposits.
2. Storing a Tenant Deposit in Florida
The only use for a non-interest bearing account is for security deposits. Security deposits also need an interest-bearing account, into which landlords credit renters with 75% of the money earned or 5% annually, whichever is less.
As an alternative, a landlord can credit tenants with five percent annual interest by posting a surety bond with the county's circuit court clerk. This bond, which must be from a business with a Florida license, must be sufficient to cover the upfront rent plus the security deposit, or $50,000, if less.
Landlords who rent out properties in five or more counties are required to post a bond with the Secretary of State equal to the amount held, or $250,000, whichever is lower. Tenants must get written notice of any modifications to the security deposit arrangement within 30 days, unless the landlord oversees four or fewer units.
If a landlord fails to follow these rules they will be legal repercussions.
3. Notice Requirements
According to Florida security deposit law, landlords must provide tenants with a written notice within 30 days of receiving the security deposit.
This written notice, sent via certified mail, should detail whether the security deposits are being kept in a separate account or combined with other funds, the name and location of the financial institution where the security deposit is held, and the interest rate if the security deposit is in an interest-bearing account.
Failure to do so can result in the landlord forfeiting the right to claim any part of the security deposit for damages unless proper written notice of the claim is given to the tenant.
4. Reasons to Withhold a Tenant’s Security Deposit in Florida
In Florida, landlords are permitted to deduct various expenses from a tenant's security deposit. These deductions can include unpaid rent, costs associated with damages that exceed normal wear and tear, financial losses resulting from a rental agreement violation, expenses for cleaning the rental unit, and any other charges specified in the rental agreement or lease agreement.
Unlike some states, Florida does not impose a legal cap on the amount landlords can deduct for damages, but they must ensure that these deductions are reasonable and justified. If the total cost of damages surpasses the Florida security deposit amount, landlords retain the right to pursue further compensation from the former tenant through additional legal means.
This underscores the importance for both parties to understand and adhere to the terms outlined in the rental agreement or lease agreement to avoid disputes over security deposit deductions.
5. Security Deposit Refund in Florida
According to Florida law, the landlord has 15 days after the tenant moves out to return the security deposit to the tenant, less any deductions, assuming there are no claims made against it.
If deductions are to be made, the landlord shall give the tenant written notice specifying the deductions within 30 days of the tenant's request. This notice, which must be issued by certified mail to the tenant's last known address, must include an itemized account of damages or charges.
Following that, the tenant has 15 days to challenge the deductions. The landlord may withhold the stipulated sums and return the security deposit within 30 days following the conclusion of the notice period if no complaints are voiced during this time.
Bottom Line
Florida security deposit laws are one of the most important regulations landlords have to comply with. Familiarizing yourself with these laws will help you handle the Florida security deposit appropriately, respect timelines for refunds, only make permissible deductions, and provide any required documentation.
Now that you’ve learned the basics of Florida security deposit laws, you’re better prepared to rent out your home! If you have more questions, contact Dennis Property Management today. We can help you navigate the legal complexities of renting out a property in the Sunshine State!
Disclaimer: This blog should not be used as a substitute for legal advice from a licensed attorney in your state. Laws frequently change, and this post might not be updated at the time of your reading. Please contact us for any questions you have in regards to this content or any other aspect of your property management needs.
