Florida Statute § 83.49 governs the collection and return of security deposits in the state of Florida. It specifies all the rules that landlords must follow, including how much to charge for a security deposit, how to store it, and when to return it to the tenant.
The following is everything you need to know regarding Florida security deposit laws.
Security Deposit Limit
Fortunately for property owners, Florida law doesn’t limit the amount of money for a security deposit landlords can charge tenants. However, it’s important that landlords don’t overcharge their tenants as that can cause high tenant turnover and extended vacancies.
Generally speaking, charging the equivalent of one to two months’ rent as a security deposit should be enough to protect you against any financial damages your tenant may cause.
Security Deposit Storage
You have three choices to consider when storing your tenant’s security deposit.
Interest Bearing Account
The first option is to store it in an interest-bearing account. The banking institution you open the account with must be located in the state of Florida. You will need to pay your tenant the interest that has accrued on their deposit on an annual basis and at the end of the lease term.
It’s crucial that you don’t commingle the deposit with any other funds, or use the accrued interest or deposit before it’s due to your tenant.
Non-Interest Bearing Account
The second option is to store it in a standard bank account. This is an account that doesn’t accrue any interest. The banking institution must be located within the state of Florida.
Additionally, you must not commingle the deposit with other funds, or use the deposit money before the end of the lease term.
The third option you have when storing a tenant’s security deposit is posting it as a surety bond. You can post the bond for the amount of the security deposit, or $50,000, whichever is less.
The company you post the bond to must be located in the same county as your rental property. Additionally, you must pay your tenant 5% interest annually on the bond.
Landlords in Florida have an obligation to notify their tenants in writing once they receive their security deposit. You must do this within a period of 30 days. In the notice, you must provide your tenant with the following information:
- The name and address of the banking institution or bonding company where the deposit is being stored.
- Whether the money is commingled or kept separate from other funds.
- The rate of annual interest in which the security deposit is being held.
You must then deliver the notice to the tenant either in person or by mail. If you change the location where you’re holding the deposit, you must provide your tenant with an additional notice within 30 days of the location change.
Keeping a Tenant’s Security Deposit
There are some situations in which you may be able to keep part or all of your tenant’s security deposit after the lease ends. Florida security deposit law specifies three circumstances as follows.
Covering Unpaid Rent
Tenants have an obligation to make all rent payments agreed to in the lease prior to moving out. If they move out without paying all rent due, you can make appropriate deductions from their deposit.
Covering Property Damage Exceeding Normal Wear and Tear
Examples of this kind of property damage include broken cabinets, excessively damaged doors and walls, and smashed mirrors and tiles.
Covering Lease Violations
These kinds of costs include fixing illegal property alterations that a tenant may have made during their tenancy.
Please note that you must wait until the lease ends or the tenant breaks a lease in order to make these deductions and your deductions must be reasonable and appropriate.
A walk-through inspection is normally conducted two weeks prior to the end of a lease term. It’s a visual inspection of the premises to check whether a tenant has caused any damage exceeding normal wear and tear.
In some states, tenants have the right to participate in a walk-through inspection. Florida isn’t one of these states. So, you don’t have to do a walk-through inspection before your tenant moves out.
Returning a Tenant’s Security Deposit
When to return a tenant’s security deposit depends on whether you’re returning it in full or making deductions. If returning the deposit in full, then you must do so within 15 days of the tenant moving out along with any accrued interest owed to the tenant.
If you’re making deductions, however, you have 30 days to notify the tenant of your intention to keep a portion of the deposit. If you fail to do so, you risk forfeiting your right to make any deductions to their deposit.
In this written notice, you must inform the tenant of the following details.
- Your intention to keep part or all of their deposit.
- The reason for the deductions.
- A statement indicating they have 15 days after receiving your notice to agree to or contest the deductions.
You must then send this notice to the tenant’s forwarding address through certified mail. It’s the tenant’s responsibility to provide you with their address. If they don’t, you have no obligation to notify them prior to making the deductions.
If the tenant objects to the claim, you may be left with no option but to seek legal redress. The party that wins will then be entitled to the court-awarded sum, plus attorney fees and court costs.
However, if the tenant doesn’t object, then you must send the remainder of the deposit to the tenant within 30 days after the initial notification.
Sale of Rental Property
If the property’s ownership changes hands, you must transfer the tenant’s deposit to the new landlord. You must also provide a receipt indicating the exact amount you’ve transferred to the new property owner.
At this point, you’ll no longer have further responsibilities related to holding the tenant’s deposit.
Knowing about statewide Landlord-Tenant Laws is critical to the success of every Florida landlord. If you have a question regarding Florida security deposit laws or any other aspect of property management, Stringer Management can help!
We have over 31 years of experience in managing rental properties in Sarasota and the surrounding areas.
Disclaimer: This blog is not intended to be a substitute for legal advice from a professional and qualified attorney. Also, this content may not be updated at the time you read it as laws are subject to change.