Most landlords in Florida require a security deposit from their tenants to cover property damage beyond regular wear and tear, and to limit the financial loss of tenants breaking their lease early without paying rent. Florida law does not place a statutory limit on the dollar amount landlords may charge as a security deposit, but the equivalent of one month’s rent is typical.
There are other laws that you’ll need to follow when it comes to security deposits and advance rent.
Documenting the Security Deposit
First, you’ll need to disclose in writing whether a security deposit will be held in an interest or non-interest bearing account. Other information you have to provide includes the rate and time of interest payments, and the address of the bank where the security deposit is held. The law requires you to provide this information within 30 days of receiving a security deposit. We recommend you put it into your lease agreement so your tenants can access it before moving in and during the tenancy.
Interest Bearing Accounts and Security Deposits
You need to hold the security deposit in a Florida bank with a local branch office, even if you’re an investor from outside of the state. Security deposits do not need to be held in an interest-bearing account, but if they are, interest payments must be made both annually and at the termination of the tenancy. If you offer your tenants a renewal, you should pay interest on or before the one-year anniversary of the lease being executed.
It’s extremely important that you don’t co-mingle your tenant’s security deposit with your own funds. Make sure you have a separate account set up.
Returning a Florida Security Deposit
Florida law requires landlords to return a tenant’s security deposit within 15 days of move-out if there are no reasons to deduct money from that deposit. If you do plan to make deductions based on damage, cleaning costs, or past due accounts, you’ll have to return the remaining deposit and a detailed accounting within 30 days. Remember that you cannot deduct from the security deposit for normal wear and tear items. Things like small nail holes from where pictures were hung and scuff marks on the carpet from furniture are the responsibility of the landlord.
Accepting Advance Rent
