Did you know that, as a landlord, collecting a security deposit from your tenant can protect you and your rental property from potential costly charges in the future?
As a landlord in Broward County, it’s useful to learn about the security deposit laws in the state. Understanding your rights regarding security deposits will ensure you proceed legally.
A security deposit can cover the following:
- Utility bills: If a tenant moved out of the unit and, for any reason, left with unpaid bills. The landlord can use the security deposit can be used to cover these payments.
- Cleaning charges: If the tenant left the landlord’s rental unit in a sloppy and dirty condition, you can use the security deposit to pay for cleaning services. This will help make your unit attractive once you open it for marketing and re-leasing.
- Rental payments: If your tenant is struggling to meet their payments, the security deposit the landlord collects can cover this payment.
- Rental income: If the tenant moves out of the landlord’s rental unit without notice, the security deposit can help cushion the temporary financial loss.
- A tenant’s neglect and damage: If your tenant was careless in the landlord’s unit, a security deposit will help pay for the damage repair. It is always good to maintain your landlord-tenant relationship, however, just to avoid this happening in the first place.
Landlord-Tenant Law in Florida: Security Deposit Laws Overview
1. Florida’s Security Deposit Limit
In Broward County, FL, you have control over how much security deposit you wish to collect from your tenant as a landlord. There’s no limit. This means a landlord can ask for a month’s rent or as much as three months’ rent as your security deposit. However, most landlords will keep the amount within a reasonable sum to encourage tenants to advance a month’s rent and stay immediately.
2. Non-refundable Fees
Landlords are not governed by any Florida landlord-tenant laws regarding non-refundable fees. However, a landlord should be aware that this practice is normal.
3. Storing a Tenant’s Deposit in Florida
As a landlord in Broward County, FL, Florida statutes state that there are 3 ways that you can store a resident’s security deposit. Landlords can choose to store a tenant’s security deposits in a non-interest-bearing account, an interest-bearing bank account, or a surety bond. The security deposit money may be stored with other funds.
- Non-interest-bearing Account: If the landlord places security deposits in a non-interest account, you must not mix the tenant’s deposit with other funds. You are also discouraged from using the deposit to cover specific fees before it’s due.
- Interest-bearing: If you are using a separate interest-bearing account, you should pay the tenant any interest at the end of the tenancy period. Tenants should receive this directly, or you can use it to pay a portion of their rent. However, if the tenant commits a breach of contract, they will lose the earned interest. Finally, similarly to the non-interest account, Florida landlords cannot mix the security deposit with any different funds.
- Surety bond: A landlord can opt into posting a surety bond as per security deposit laws. This can only be done in the same county as the property’s location. The tenant should receive 5% interest from the bond every year.
4. Written Notice after Security Deposit Receipt
Once the landlord’s notice is received, a tenant’s security deposit, Florida Law requires you, the landlord, to send the tenant written notice through certified mail. The initial written notice must be completed within 30 days. If the landlord fails to do this, I may open them to legal action.
The notice given through certified mail must include the following details:
- Florida banking institution information: Write the name and location of the bank that is holding the tenant’s security deposit in the notice.
- Indicate whether you have co-mingled the tenant’s security deposit with other money or not.
- If a landlord places the deposit in an interest-bearing account, provide information on the interest rate in the rental agreement.
- The landlord’s address and relevant business information.
5. Reasons to Withhold a Tenant’s Security Deposit in Florida
To help protect Florida landlords, if a tenant breaks their agreement, there are certain conditions that will permit a landlord to entirely or partially withhold a tenant’s security deposit. In Broward County, Florida, these are some common reasons to use a tenant’s remaining deposit.
- Use a tenant’s deposit to cover for property damage beyond regular normal wear-and-tear.
- Use a tenant’s deposit if they have committed a breach of contract resulting in financial loss for the landlord.
- Use a tenant’s deposit if they have committed lease violations that require payment.
- A landlord can use the security deposit to cover unpaid dues or advance rent if the lease agreement states.
If a tenant objects to the landlord’s claim that the lease agreement was broken then it is best to consult an attorney or property management company to ensure Florida’s security deposit law is adhered to.
6. A Walk-Through Inspection
In Broward County, Florida, a landlord does not need to complete a walk-through inspection upon a tenant’s move out or the lease termination.
7. Florida’s Security Deposit Refund
Under Florida law, and relevant Florida statutes pertaining to a deposit, you must notify and refund a tenant’s security deposits within 15 days. If you’re planning to keep a portion of the security deposit, you must send an initial written notice to the tenant’s mailing address containing a list of deductions. This must be done within 30 days to prevent a tenant’s forfeiture of the claim.
8. Change in Property Ownership
If a landlord decides to sell their rental property in Broward County, Florida, they are required to transfer all the security deposits and interests to the new landlord. Further, along with the transfer, Florida landlords must also notify with a written receipt showing they transferred the money. This is necessary to relinquish the previous landlord’s duties and responsibilities.
Handling tenant’s security deposits, posting a surety bond or advance rent can be tricky for any landlord, and handling them incorrectly can result in court costs. So if you have specific questions regarding your existing rental agreement or handling any tenant’s questions, hire the services of a qualified Florida attorney. Alternatively, a landlord can seek help from a knowledgeable property management company.
Please note that landlords should not substitute this blog for legal advice from a licensed attorney in Florida. Laws and Florida statutes frequently change, and this post might need updating at the time of your reading. Please contact us for any questions you have regarding this content or any other aspect of your property management needs.