Florida Security Deposit Law

Purpose. Security deposits are used to ensure a landlord is compensated, at least in part, for any loss that the tenant is responsible for, such as unpaid rent or property damage above normal wear and tear. Florida state laws help to govern the exchange of security deposits between tenants and landlords.

Legal Basics. There is no limit on the amount Florida landlords can charge as security deposit from which unpaid rent, cost of damage to the unit, charges under the lease and costs incurred by the landlord due to breach of the lease may be deducted. It must be returned within 15 days after the tenant vacates the premises. Otherwise, the landlord may be made to return the amount withheld plus the tenant’s costs of suit and attorney’s fees.

Maximum Security Deposit Charge in Florida

Florida Statutes do not limit the amount Flordia landlords can charge as security deposit charge. However, cities and counties within Flordia are can put a cap on the amount. Check with the municipality where the property to be rented is located, to be sure.

Security Deposit Holdings in Florida

Florida landlords have three options when storing security deposits in an account. Below are the 3 options and the specific duties relating to them:

1. 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.
2. The landlord can choose to keep the money in an interest-bearing account in a Florida bank. In this case, the landlord must give or credit to the tenant either 75% of the interest earned from the account or 5% simple interest per year on the amount of security deposit. The land is also prohibited from using this account for funds other than security deposits.
3. The landlord can choose to post a security bond from a surety company that’s licensed as such by the clerk of the circuit court in the county where the unit is. 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 for the lesser of $50,000 or the total amount of security deposit that the landlord is holding for all the tenants for all the rental units. (However, if the landlord is renting units in more 5 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, instead of posting a bond in each county.)

If the landlord is renting out 5 or more individual dwelling units, the landlord must provide the tenant with written notice of how the security deposit is being held. The landlord has 30 days after receiving the security deposit to choose how to hold the deposit and notify the tenant of the details of the same. However, the landlord has the option of predetermining the manner of holding and including the required written notice in the lease or rental agreement.

The written notice must be given in person or by mail and must include the following information:

1. The amount of the security deposit received
2. If the security deposit has been placed in an account, the name and address of the bank or institution where it has been deposited
3. If the landlord opted to post a bond, a statement that the landlord has posted a surety bond as provided by law
4. A statement of whether or not the tenant is entitled to interest on the security deposit
   The disclosure as quoted below:

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.

Change in the manner of holding: Should the landlord change the manner of holding the security deposit, the landlord will have 30 days from the day the change was made to notify the tenant of the same through a written notice, delivered in the same manner, with all the information as required in the above enumeration except for the disclosure in number 5. This change includes the instance where the landlord transfers the same into a different bank or bank account.

Allowable Deductions on Security Deposits in Florida

If part of the security deposit was intended to be advance rent, the landlord may take out the corresponding amounts as they become due without notice to the tenant but only for the months where advance rent payments were intended. For all other amounts to be taken from the tenant’s security deposit, the landlord must follow the rules below.

Florida landlords may deduct from the security deposit the following:

1. Unpaid rent
2. Cost of monetary damage caused by the tenant’s breach of the lease
3. Cost of repairs for damage to the unit in excess of normal wear and tear
4. Charges allowed to be deducted under the lease (e.g. early termination fee)

Can the deposit be used by the tenant as last month’s rent? Not usually, but it can be done 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 that happens when the property is used as it was meant to be used and only when that deterioration occurs 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 and visit our state laws page to learn more about other landlord-tenant responsibilities.

Returning Security Deposits in Florida

Time Frame: The landlord has 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.

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 attorney’s 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 notice must be sent to the tenant via certified mail and must contain a notice that more or less 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 of the same, the tenants must give the landlord at least 7 days’ notice in writing before vacating the unit. The notice of termination must include a forwarding address where the tenant may be reached. 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 if the landlord may still be required to return the same. 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 2019 but was only forfeited in 2020, then the landlord should only include it as income in 2020.

Reporting security deposit as income: Whether or not 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 3 simple rules the IRS has suggested to follow:

1. If 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.
2. 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.
3. If 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: The landlord is not required to provide a receipt for the security deposit in Florida.

Security Deposit Interest in Florida: Florida landlords are required to pay interest on the security deposit except when the same is placed in a non-interest bearing account. If the security deposit is placed in an interest-bearing account then the tenant is entitled to either 75% of the interest earned from the bank, or 5% on the amount of security deposit, whichever the landlord decides. If the landlord opted to post a bond, then the tenant is entitled to a 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 for the same, 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.
Florida

Frequently Asked Questions

How much can a landlord charge for a security deposit in Florida?

There is no maximum security deposit a landlord can charge in Florida. Florida law on security deposits does not currently put a limit on the amount of security deposit. Usually, landlords charge one to two months’ rent as security deposit.

Can you use the security deposit as last month’s rent in Florida?

In Florida, a tenant is not usually allowed to use the security deposit as last month’s rent. However, if there is an agreement between the landlord and the tenant to use the security deposit for last month’s rent, then the tenant can do so.

What can a landlord deduct from a security deposit in Florida?

A landlord in Florida can legally deduct the following from the security deposit: unpaid rent, monetary damage caused by the tenant’s breach of the lease, repairs for damage and charges allowed under the lease.

However, repairs and restorations are not chargeable against the security deposit if they are for that damage was caused by normal wear and tear, or existed before the tenant moved in.

Can a landlord charge a cleaning fee in Florida?

In Florida, a landlord is allowed to charge a cleaning fee if the rental agreement allows the landlord to do so. Without a provision in the agreement allowing cleaning services to be charged, the landlord is not likely to be able to charge cleaning services against the security deposit.

This is because cleaning will usually fall under normal wear and tear which is not deductible from the security deposit.

What is considered normal wear and tear in Florida?

Normal wear and tear in Florida is defined as a matter of case law or practice. The statutes do not specifically provide a definition but generally, it is deterioration that occurs naturally as a result of the tenant using the property as it’s designed to be used without fault or negligence from the tenant.

How long does a landlord have to return the security deposit in Florida?

In Florida, a landlord has 15 days from the move out date to return the security deposit if there are no deductions. If there are deductions, the landlord must also provide the tenant with a written statement of the deductions within 30 days.

Note, however, that the tenant has 15 days from the receipt of the written statement to dispute charges.

What happens if a landlord does not return the security deposit in Florida?

If a landlord in Florida does not return the security deposit within 15 or 30 days from the move out date, the landlord may be liable for the tenant’s costs of suit and attorney’s fees.

Are security deposits taxable in Florida?

Security deposits in Florida aren’t taxable until they become the landlord’s property. This happens when the security deposit is applied to rent, forfeited, or applied to charges allowed under the lease.

However, when they are used to cover expenses incurred by the landlord due to the tenant’s fault, like the cost of repairs or unpaid utilities, they are not always taxable. The IRS advises to only report them as income if the landlord also reports the costs they covered as expenses. Otherwise, there is no need to report them as income, in which case they will not be taxed.

For additional questions about security deposits in Florida, please refer to the official state legislation, Florida Statutes § 83.49, for more information.