In Florida, the collection and return of security deposits are primarily regulated under FL Stat. § 83.49. These laws provide a set of rules that Florida landlords and property managers have to follow to protect all parties.
Maximum Security Deposit Charge in Florida
Florida Statutes do not limit the amount Florida landlords can charge as security deposit. However, cities and counties within Florida can put a cap on the amount.
Additional Pet Deposits. Under Florida’s law, the landlord may ask for an additional pet deposit; however, people with disabilities who use service animals are must have full and equal access to housing. The landlord cannot ask for an additional pet fee for a service animal. If the service animal causes damage to the rental unit, the tenant is liable to pay for any damages.
The Federal Fair Housing Act requires housing facilities to allow tenants who use service dogs and emotional support animals to have an equal opportunity to use and enjoy their home.
Security Deposit Holdings in Florida
Once the security deposit is received, the landlord has 30 days to choose how to notify the tenant of the details and the location of the security deposit.
Written Notice of Security Deposit
The written notice must be given in person or by mail and must include the below information:
- State the name and address of the depository or state if there is a surety bond.
- State if the tenant is entitled to interest on the security deposit.
- Include the following disclosure:
YOUR LEASE REQUIRES PAYMENT OF CERTAIN DEPOSITS. THE LANDLORD MAY TRANSFER ADVANCE RENTS TO THE LANDLORD’S ACCOUNT AS THEY ARE DUE AND WITHOUT NOTICE. WHEN YOU MOVE OUT, YOU MUST GIVE THE LANDLORD YOUR NEW ADDRESS SO THAT THE LANDLORD CAN SEND YOU NOTICES REGARDING YOUR DEPOSIT. THE LANDLORD MUST MAIL YOU NOTICE, WITHIN 30 DAYS AFTER YOU MOVE OUT, OF THE LANDLORD’S INTENT TO IMPOSE A CLAIM AGAINST THE DEPOSIT. IF YOU DO NOT REPLY TO THE LANDLORD STATING YOUR OBJECTION TO THE CLAIM WITHIN 15 DAYS AFTER RECEIPT OF THE LANDLORD’S NOTICE, THE LANDLORD WILL COLLECT THE CLAIM AND MUST MAIL YOU THE REMAINING DEPOSIT, IF ANY.
IF THE LANDLORD FAILS TO TIMELY MAIL YOU NOTICE, THE LANDLORD MUST RETURN THE DEPOSIT BUT MAY LATER FILE A LAWSUIT AGAINST YOU FOR DAMAGES. IF YOU FAIL TO TIMELY OBJECT TO A CLAIM, THE LANDLORD MAY COLLECT FROM THE DEPOSIT, BUT YOU MAY LATER FILE A LAWSUIT CLAIMING A REFUND.
YOU SHOULD ATTEMPT TO INFORMALLY RESOLVE ANY DISPUTE BEFORE FILING A LAWSUIT. GENERALLY, THE PARTY IN WHOSE FAVOR A JUDGMENT IS RENDERED WILL BE AWARDED COSTS AND ATTORNEY FEES PAYABLE BY THE LOSING PARTY.
THIS DISCLOSURE IS BASIC. PLEASE REFER TO PART II OF CHAPTER 83, FLORIDA STATUTES, TO DETERMINE YOUR LEGAL RIGHTS AND OBLIGATIONS.
Storing Security Deposits
Florida landlords have three options when storing security deposits in an account. Below are the three options and the specific duties relating to them:
- Non-Interest Bearing Account. The landlord can choose to place the security deposit in a non-interest bearing account in a Florida bank. The landlord is not allowed to use this account for funds other than security deposits.
- Interest-Bearing Account. The landlord can choose to keep the money in an interest-bearing account in a Florida bank. The landlord must credit the tenant either 75% of the interest earned or 5% simple interest per year. The landlord is also prohibited from using this account for funds other than security deposits.
- Security Bond. The landlord can choose to post a security bond from a surety company that’s licensed by the clerk of the circuit court. In addition to the bond, the landlord must pay a 5% simple annual interest on the amount of deposit. The bond should be conditioned upon the landlord complying with duties concerning the security deposit (e.g., holding, accounting for, returning, etc.).The bond should be the lesser of $50,000 or the total amount of security deposit that the landlord is holding for all the tenants. However, if the landlord is renting units in five or more counties , the landlord has the option of posting a bond with the Secretary of State for $250,000 or the total amount of all security deposits the landlord is holding, whichever is less.
Change in the Manner of Holding
Should the landlord change the manner or location of holding the security deposit, the landlord will have 30 days from the day the change was made to notify the tenant. The landlord does not need to give a new notice because the depository has merged with another financial institution or transferred ownership to a different financial institution.
Allowable Deductions on Security Deposits in Florida
Florida landlords may deduct from the security deposit the following:
- Unpaid rent.
- Cost of monetary damage caused by the tenant’s breach of the lease.
- Cost of repairs for damage to the unit in excess of normal wear and tear.
- Charges under the lease agreement (e.g., early termination fee).
Advanced Rent Deductions
If part of the security deposit was intended to be advanced rent , the landlord may take out amounts as they become due without prior notice.
Can the deposit be used by the tenant as last month’s rent? Not usually, but it can be if there is a written agreement between the parties to do so.
“Normal Wear and Tear” vs. Damage
- “Normal wear and tear” refers to the deterioration of the property by normal use. Normal wear and tear happens without negligence, carelessness, accident, misuse, or abuse by the tenant or the people the tenant brings there. They are minor issues that occur naturally like aging and expected decline as a result of everyday living. These can include gently worn carpets, loose door handles, fading wall paint and flooring, stained bath fixtures, lightly scratched glass, dirty grout and mold that occur naturally.
- “Damage” refers to the destruction that occurs because of abuse or negligence by a tenant during the tenancy and can affect usefulness, value, normal function of the rental unit. Pet damage (heavily stained and ripped carpet), broken tiles, hole in the wall, broken windows and missing fixtures are all examples of damage.
Check out our article on “wear and tear” vs. “damage” to get a better idea of the difference.
Returning Security Deposits in Florida
The landlord must return the security deposit within 15 days from the time the tenant vacates the unit to return the security deposit if there will be no deductions. If the landlord intends to make deductions, the landlord must provide the tenant with written notice of deductions within 30 days.
Failure to Return the Security Deposit on Time
Florida statutes do not provide a specific penalty on the landlord’s failure to return the security deposit on time. However, should the landlord fail or refuse to return it, the tenant may sue the landlord for the return of the same.
If the tenant wins, the tenant will be entitled to the costs of the suit and reasonable attorneys’ fees . However, if the landlord wins, the tenant will be the one to pay for the landlord’s costs.
Written Notice of Deductions
The landlord has 30 days after the tenant vacates the unit to provide this written notice. If the landlord fails to do so, the landlord’s rights to charge anything or hold on to the security deposit will be forfeited .
The landlord shall send notice to the tenant via certified mail and states the following:
This is a notice of my intention to impose a claim for damages in the amount of___________ upon your security deposit, due to________________. It is sent to you as required by Section 83.49(3), Florida Statutes. You are hereby notified that you must object in writing to this deduction from your security deposit within 15 days from the time you receive this notice or I will be authorized to deduct my claim from your security deposit. Your objection must be sent to (landlord’s address).
The tenant will then have 15 days after receiving the notice to dispute the claims or charges. If the tenant does not object to the charges, then the landlord may deduct the amounts as detailed in the written notice and return the remainder of the security deposit, if any, within 30 days from the date of the written notice that was sent to the tenant.
Forfeiture of the Tenant’s Right to Written Notice
Where the lease has no fixed term or where the lease has a fixed term but the tenant wants an early termination, the tenants must give the landlord at least seven days’ notice in writing before vacating the unit.
The notice of termination must include a forwarding address. Failure to do so will relieve the landlord of the latter’s duty to provide the written notice of deductions discussed above.
Security Deposits and Tax Filing in Florida
How the security deposit will be treated tax-wise depends on whether or not the landlord gets to keep it (or part of it).
Taxable Income. Security deposits are not automatically considered income when the landlord receives them. The IRS advises to not include security deposits as income. They only become taxable income when the landlord no longer has any obligation to refund them. For example, if the security deposit was given in 2021 but was only forfeited in 2022, then the landlord should only include it as income in 2022.
Reporting Security Deposit as Income. Whether or not a security deposit should be reported as income and when to do so will depend on what it is being applied to or used as. Below are three simple rules the IRS has suggested to follow:
- The deposit is forfeited due to a breach of the lease or applied to unpaid rent, then the amount kept should be declared as income in the year it was forfeited or applied.
- If the security deposit is used to cover expenses that are chargeable to it, then the landlord should only include the part of the deposit used as income if the landlord includes the cost of repairs as expenses. If the landlord doesn’t include them as expenses as a matter of practice, then there’s no need to include the part of the deposit kept to cover them as income.
- There is an agreement between the parties to use the deposit or part of it as the final month’s rent, then the landlord should include it as income when the same is received.
Additional Rules & Regulations in Florida
Receipt Requirements. Within 30 days of receiving a security deposit, a landlord must provide (in writing) the following information:
- The name of the account depository.
- If the funds will be held in an interest account/non-interest bearing account.
- The rate/time of interest payments.
Security Deposit Interest in Florida. Florida landlords must pay interest on the security deposit except if it’s in a non-interest bearing account. If the security deposit is in an interest-bearing account then the tenant shall obtain either 75% of the interest earned from the bank, or 5% on the amount of security deposit. If the landlord wants to post a bond, then the tenant shall receive 5% interest on the security deposit.
When interest is payable to the tenant, the landlord can either pay the tenant directly or credit it as rent, either way, the landlord must do this at least once a year . That said, the tenant forfeits rights to interest when the tenant wrongfully terminates the lease prior to the end of its term.
New Property Owner’s Responsibility: If the rental property is sold while the lease subsists, the buyer inherits the previous owner’s obligation to refund the tenant’s security deposit when the lease ends. The landlord is required to transfer the security deposit and provide an accurate accounting, especially when the property sold consists of several rental units. The landlord will not be relieved of his duties related to the security deposit unless he does so.
For additional questions about security deposits in Florida, please refer to the official state legislation, FL Stat. § 83.49, for more information.
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