Landlords have the right to ask for a security deposit. The deposit basically acts as a financial cushion against any loss that the tenant might be responsible for, such as, causing damage exceeding normal wear and tear, and failing to pay rent.
Florida, just like many other states, has security deposit laws in place. Contained therein are rules that every landlord in the state must abide by. They are as follows:
Maximum Security Deposit
Florida doesn’t impose a limit on how much security deposit a landlord can ask from their tenant. However, cities and counties may have legislation capping the amount of security deposit a landlord can ask.
As such, be sure to check with the municipality where your property is located.
Additional Pet Deposit
Florida allows landlords to ask for an additional pet deposit. Please note, however, that the same doesn’t apply to tenants who have service animals due to a disability. According to the Fair Housing Act, disability is a protected characteristic, and service animals are not classified as pets.
As such, a tenant with a service animal is entitled to equal access to housing. So, by requiring that tenant to pay an extra fee because of having a service animal, that would amount to discrimination.
That said, the tenant with a service animal isn’t exempt from being held liable for any damage their animal causes to the unit.
Security Deposit Holding
Landlords in Florida have three options when it comes to storing their tenants’ security deposits.
The first option landlords have is storing their tenant’s security deposit in a non-interest-bearing account. The financial institution must be located in Florida, and the deposit must not be commingled with other funds.
The second option you have as a landlord is to store your tenant’s deposit in an interest-bearing account. And just like the first option, the account must be in a Florida bank, and the deposit must not be commingled with other funds.
What’s more, a landlord must give or credit to the tenant either 75% of the interest the account earns or pay 5% simple interest per annum on the security deposit amount.
The final option Florida landlords have is to post a security bond. The surety company must be licensed to operate as such by the circuit court’s clerk in the county your unit is located in.
Aside from posting the bond, you must also pay 5% simple annual interest on the deposit amount. The bond should be for the total amount of deposit that you’re holding for all the tenants living in your rental unit, or $50,000, whichever is less.
Written Notice
Once you have received the security deposit, you’ll have 30 days to choose how to hold the deposit and notify your tenant of the same. That said, you still have a right to predetermine the manner in which you’re going to hold the deposit, as well as the notice period to give in your lease agreement.
There are certain details that you must include in the written notice:
- Name and address of the institution where you’re holding your tenant’s security deposit.
- State whether your tenant is entitled to any interest on their security deposit.
- State whether you’re holding the deposit separately or is commingled with other funds.
You must deliver the notice either by mail or in person. If for whatever reason, you change the location where the deposit is being held, you must again notify the tenant in writing. This should be done within 30 days.
Reasons to Keep a Tenant’s Security Deposit
Florida landlords are allowed to make deductions on a tenant’s security deposit for certain reasons. They are as follows:
- To cover unpaid rent - This can result from either the tenant breaking their lease early in Florida without a justified reason, or simply occurring when a tenant abandons their unit.
- To cover damage exceeding normal wear and tear - Examples of such damage include a broken toilet seat, a smashed bathroom mirror, and damaged door handles.
- Charges are allowed to be deducted under the lease agreement - An example of this is an early termination fee.
Walk-Through Inspections
Tenants in the state of Florida don’t have a right to a walk-through inspection prior to moving out. However, as a landlord, you may still choose to have your tenant present during the inspection.
Returning Security Deposits in Florida
Florida landlords have 15 days to return their tenant’s deposit once the tenant leaves the unit if there are no deductions.
Where there are deductions, you’ll have 30 days to let them know of the deductions you intend to make. If you fail to notify them within the 30-day period, you’ll forfeit your right to make any deductions to their deposit.
What’s more, wrongfully withholding your tenant’s security deposit can have some financial and legal ramifications. Among other things, you may be liable to pay your tenant the withheld deposit amount, plus costs of the suit and reasonable attorney fees.
Sale of Rental Property
If the property’s ownership changes, you must transfer the security deposit and any interest accrued to the incoming owner. You must also create a written receipt indicating the amount that you transferred to the new owner.
Once you’ve done this, you’ll be relieved of your responsibilities for holding your tenant’s security deposit.
Taxation on Security Deposits
In Florida, security deposits aren’t taxable until they become the property of the landlord. And, this can happen when the deposit is applied towards rent payment, is forfeited, or is applied to other charges allowed under the lease agreement.
Summary
As a landlord in Florida, it’s important that you know and understand your rights and responsibilities under landlord-tenant laws. You must ensure that you follow all security deposit and leasing laws. If issues arise, you must also be sure to follow the proper legal eviction process in Florida.
If you would like help keeping track of your legal responsibilities or managing your rentals reach out to a trusted property management company. The team at Suncastle Properties will gladly assist you! Contact us today to learn more about our services.
Disclaimer: This blog isn’t a substitute for professional legal advice from a licensed attorney. Laws change frequently and this post may not be updated at the time you read it. If you have a specific question, kindly reach out to a legal expert for help.