Did you know that collecting a security deposit from your tenant can protect you 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 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.
- Rent payments: If your tenant is struggling to meet the rent 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.
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 as a landlord. There’s no limit. This means a landlord can ask for at least one month or as much as three months’ worth of rent as your security deposit. However, most landlords will keep the amount within a reasonable sum to encourage tenants to advance rent and stay right away.
2. Nonrefundable Fees
There is no Florida statute regarding nonrefundable fees. However, this practice is normal.
3. Storing a Tenant’s Deposit in Florida
As a landlord in Broward County, FL, there are 3 ways that you can store a resident’s security deposit. You can choose to store it in a non-interest-bearing account, an interest-bearing account or a surety bond.
- Non-interest-bearing: If you the landlord places security deposits in a non-interest account, you must not mix it with other funds. You are also discouraged from using the deposit to cover certain fees before it’s due.
- Interest-bearing: With this account, the landlord should pay the tenant an annual interest at the end of the tenancy period. The tenant can receive the interest 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, the landlord cannot mix the security deposit in this account with other funds.
- Surety bond: You can opt to post a $50,000 surety bond. 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 receives a tenant’s security deposit, the Florida Law requires you, the landlord, to send the tenant a written notice. The notice must be completed within 30 days.
The notice must include the following details:
- Bank 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 funds or not.
- If you have placed the deposit in an interest-bearing account, provide information on the interest rate.
5. Reasons to Withhold a Tenant’s Security Deposit in Florida
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 cover for property damage beyond regular normal wear-and-tear.
- The renter has committed a breach of contract resulting in financial loss.
- The tenant has committed lease violations that require payment.
- To cover for unpaid rent.
6. A Walk-Through Inspection
In Broward County, Florida, a landlord does not need to complete walk-through inspection upon a tenant’s move out.
7. Florida’s Security Deposit Refund
Under Florida law, as a landlord, you must refund a tenants’ security deposits within 15 days. If you’re planning to keep a portion of the security deposit, you must send a written notification to the tenant 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 you decide to sell your rental property in Broward County, Florida, you’re required to transfer all the security deposits and interests to the new landlord. Further, along with the transfer, you the landlord must also provide a written receipt showing the transferred amounts. This is necessary to relinquish the previous landlord’s duties and responsibilities.
If you have specific questions, hire the services of a qualified Florida attorney. Alternatively, you can seek help from a knowledgeable property management company.
Please note that this blog should not substitute for legal advice from a licensed attorney in Florida. Laws 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.