Did you know that collecting a security deposit from your tenant can protect you from potential costly charges in the future?
As a property owner in Broward County, it’s useful to learn about the security deposit laws in Florida. Understanding your rights regarding the security deposit will ensure you proceed legally.
A security deposit can cover the following:
- Utility bills: If a tenant moved out of the property 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 property in a sloppy and dirty condition, you can use the security deposit to pay for cleaning services. This will help make your property 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 can cover this payment.
- Rental income: If the tenant moves out of your rental property without notice, the security deposit can help cushion the temporary financial loss.
- A tenant’s property neglect and damage: If your tenant was careless in your property, a security deposit will help pay for the damage repair.
Landlord-Tenant Law in Florida: Security Deposit Overview
1. Florida Security Deposit Limit
In Broward County, Florida, you have control over how much security deposit you wish to collect. There’s no limit. This means you can ask for at least one month or as much as three months’ worth of rent as your security deposit. However, most property owners will keep the amount within a reasonable sum to encourage tenants to rent 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 property owner in Broward County, Florida, there are 3 ways that you can store a tenant’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 account: If you place a tenant’s security deposit in a non-interest-bearing 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 account: With this account, you 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-bearing account, you 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 you receive a tenant’s security deposit, the Florida Law requires you to send the tenant a written notification. The notice must be completed within 30 days.
It must include the following details:
- Bank information: Name and location of the bank that is holding the tenant’s security deposit.
- 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 you 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, you do not need to complete walk-through inspection upon a tenant’s move out.
7. Security Deposit Refund in Florida
Under Florida law, you must refund a tenant’s security deposit 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 owner. Further, along with the transfer, you must also provide a written receipt showing the transferred amounts. This is necessary to relinquish the previous property owner’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.