As a landlord, asking tenants for a security deposit is a smart move. Why? You see, when you rent out a property to a stranger, certain liabilities can arise. A tenant can move out without paying the due rent or utility bills. They can also cause property damage.
Without a security deposit to insure you against such issues, you’d be left to foot the entire restoration costs by yourself. This can seriously impact your bottom line! Fortunately for landlords in Florida, asking tenants for a security deposit is one of the many rights under the state’s landlord-tenant laws.
The following is everything you should know regarding the Florida security deposit laws.
Maximum Amount of Security Deposit
Fortunately for Florida landlords, there is no cap on how much you can ask a tenant as a security deposit. This means that you can ask for as much or as little as you want. Don’t make the mistake of overcharging a tenant, however. This can make your property less desirable in the eyes of prospective tenants, making it difficult for you to land a quality tenant.
Most landlords in Florida, generally speaking, only ask for a maximum amount of twice the monthly rent amount. If you are, for instance, charging tenants a monthly rent of $2,000, then only ask for a maximum deposit amount of $4,000. This should help cover your financial liabilities in case of property damage or unpaid rent.
Storing a Tenant’s Security Deposit
Under Florida security deposit laws, landlords must choose between three methods for storing tenants’ deposits. One option is to store the deposit in an interest-bearing account at a financial institution located and licensed to operate in Florida.
Landlords must credit the tenant with either 75% of the annualized average interest rate or 5% per year simple interest. The landlord cannot commingle these funds with any other and cannot use them until they are due. Another option is to store the deposit in a non-interest-bearing account in a Florida financial institution.
Similar to the interest-bearing account, the funds must not be mixed with any other accounts or used until they’re actually due to the landlord. The final option is to post a surety bond for the tenant’s deposit with the clerk of the circuit court in the county where the rental property is located.
The bond should cover either the total amount of security deposits and advance rent or $50,000, whichever is less. Additionally, landlords must pay the tenant 5% per year simple interest on the deposit. The bond must be executed by a surety company authorized and licensed to operate in Florida.
Notice of Receipt of Security Deposit
Under Florida security deposit law, landlords are required to provide tenants with a written Notice of Receipt of Security Deposit within 30 days of receiving the deposit.
This notice must include the name and address of the financial institution where the deposit is held, specify whether the account is interest-bearing or non-interest-bearing, and detail any terms regarding interest that may accrue.
If the landlord changes the location of the deposit, they must notify the tenant within 30 days of the change. This requirement ensures transparency in handling tenant funds and gives tenants a clear understanding of where their security deposit is held throughout the lease term.
Reasons for Withholding a Tenant’s Security Deposit
As a landlord in Florida, you can legitimately withhold part or all of a tenant’s security deposit for several reasons. They include the following.
Unpaid rent: Tenants must make rent payments for the entire duration of the lease. If a tenant moves out without doing so, you can withhold appropriate amounts from their deposit to cover the losses.
Unpaid utility bills: Just like unpaid rent, you can also withhold the tenant’s deposit to cover payments such as electric or gas.
Damage exceeding normal wear and tear: This is the type of damage that results from abuse, misuse, negligence, or careless behavior by the tenant.
The following provides a summary of examples of what exactly constitutes damage and normal wear and tear. These differences are important to note to avoid potential conflicts arising from security deposit deductions regarding property damage.
Normal Wear and Tear
Scuffed flooring that arises due to furniture movement and foot traffic.
Discolored grout which results from exposure to moisture and cleaning agents.
Sagging shelves.
Dents in appliances due to accidental bumps or drops.
A squeaky door during opening and closing.
Faded paint on walls due to sunlight exposure.
Loose wallpaper.
Damage Exceeding Normal Wear and Tear
A cracked or missing flooring tile.
Damaged locks on shelves.
A damaged appliance due to misuse or abuse.
A missing door or handle.
Graffiti on walls or unwanted paint colors.
Torn wallpaper.
Returning a Tenant’s Security Deposit
You have 15 days after a tenant moves out to return their deposit. This time limit only applies when returning the deposit in full. When returning it partially, you have up to 30 days to do so after they move out.
In the case of deductions, you must provide the tenant with an itemized statement. You must then send the statement, plus the remainder of the deposit if any, to the tenant via certified mail. After receiving the statement, the tenant will have up to 15 days to contest the deductions.
Conclusion
Staying legally compliant as a landlord is key to becoming successful. It’s usually a recipe for a solid landlord-tenant relationship for a smooth landlording experience. For further clarification on any aspect of Florida security deposit laws, don’t hesitate to get in touch with SunnySide Properties.
At SunnySide Properties, we’re experts in all aspects of property management including security deposits. Get in touch to learn more!
Disclaimer: Please note that the information provided in this blog is intended for general guidance and should not be considered as a replacement for professional legal advice. It is important to be aware that laws pertaining to property management may change, rendering this information outdated by the time you read it.
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