As a landlord in Florida, it’s essential to understand the laws and regulations surrounding security deposits. Section 83.49 of Title VI (Civil Practice and Procedure) of the 2023 Florida Sunshine Statutes outlines the rules for handling security deposits. Knowing these rules can help you avoid legal issues and maintain a smooth landlord-tenant relationship. This guide will break down the main points of the law for southwest Florida landlords. If exploring the ins and outs of Florida’s laws isn’t really your thing, let the experts at Douglas Realty Property Management handle all aspects of managing your rental properties in Florida, including dealing with security deposits.
Holding Security Deposits
When you receive a security deposit or advance rent from a tenant, you have three options for holding these funds:
- Non-Interest-Bearing Account: You can place the money in a separate, non-interest-bearing account in a Florida banking institution. It’s important to ensure that this account is solely for the tenant’s funds and not mixed with any of your own money. This ensures the tenant’s deposit is protected and clearly separated from your business funds.
- Interest-Bearing Account: Alternatively, you can hold the deposit in a separate, interest-bearing account in a Florida banking institution. In this case, the tenant is entitled to at least 75% of the annualized average interest rate or 5% simple interest per year, whichever you choose. As with the non-interest-bearing account, these funds must not be mixed with your own.
- Surety Bond: The third option is to post a surety bond with the clerk of the circuit court in the county where the rental property is located. The bond should be equal to the total amount of security deposits and advance rent held or $50,000, whichever is less. Additionally, you must pay the tenant 5% simple interest per year on the deposit. If you manage properties in five or more counties, you can post a single surety bond with the Secretary of State instead, covering up to $250,000 in deposits.
Notification Requirements
Florida law requires you to notify your tenants in writing about how and where their deposit is held. This notice must be provided in the lease agreement or within 30 days of receiving the deposit. The notification should include:
- The name and address of the financial institution where the deposit is held
- Whether the deposit is in an interest-bearing account
- A specific disclosure statement as required by law
If you change the way you hold the deposit, you must inform the tenant within 30 days of the change.
Handling Deposits at Lease Termination
When a tenant moves out, you have specific obligations regarding the security deposit:
- No Intent to Claim: If you do not intend to make a claim against the security deposit, you must return the deposit (plus any applicable interest) within 15 days.
- Intent to Claim: If you plan to make a claim against the deposit, you must provide the tenant with written notice of your intention within 30 days. This notice must be sent by certified mail to the tenant’s last known address and should include the amount you intend to claim and the reason for the claim.
- Tenant’s Response: The tenant has 15 days from the receipt of your notice to object to the claim in writing. If the tenant does not object within this timeframe, you can deduct the claimed amount from the deposit and return any remaining balance within 30 days.
Legal Considerations
There are a few things you need to consider from a legal standpoint concerning security deposits for rental properties:
- Failure to Notify: If you fail to notify the tenant within the 30-day period, you forfeit the right to claim any part of the deposit.
- Legal Actions: If disputes arise over the deposit, either party can take legal action. The prevailing party is entitled to court costs and reasonable attorney fees.
- Compliance: Adhering to these regulations ensures compliance with Florida law and protects you from legal repercussions.
Interest Payments
If you hold the deposit in an interest-bearing account or have posted a surety bond, you must pay the tenant any accrued interest annually. This can be done either by direct payment to the tenant or as a credit against their rent.
Transfers and Sales
If you sell or transfer ownership of the rental property, or if there is a change in the designated rental agent, the security deposits must be transferred to the new owner or agent along with any earned interest. The new owner or agent is then responsible for holding and managing the deposits according to the law.
Leave the Stress of Security Deposits Behind
Understanding and following Florida’s rules on security deposits is crucial for landlords. Proper handling of these deposits not only ensures compliance with state law but also builds trust and transparency with your tenants. However, complying with the nuances of landlord-tenant laws, including security deposit regulations, can be stressful and complicated. That’s where a reputable property management company, like Douglas Realty Property Management, comes into play. If you have any questions or need assistance with property management, our team is here to help. Contact us today at 239-542-6906 or message us online for more information on how we can support you in managing your rental properties in southwest Florida.
