Each state has different regulations when it comes to handling security deposits. This article will cover the laws surrounding them in Miami, Florida.
Asking for security deposits is a common requirement from landlords to act as protection when tenants commit a breach of contract or they suddenly abandon the rental unit. There are plenty of reasons that will be outlined below why they are so important.
If you’re a landlord in Miami, Florida, you can see the advantages of collecting a security deposit.
- Protect a landlord by paying off a tenant’s unpaid utilities in case they move out of the property. You may experience a situation where the tenant leaves without fulfilling their obligation of paying their bills. The security deposit acts as a reserve so you won’t be paying on behalf of the renter from your own budget.
- Pay off cleaning bills. Even if tenants are responsible for leaving a property in the same condition they found it, many don’t. To prevent the landlord from shouldering this burden, the security deposit can be used to pay for the cleaning costs. This will help speed up the property showings for prospective renters.
- Lessen the impact of loss on rental payments. A security deposit will effectively buffer and lighten the landlord’s financial loss.
- Protect loss in rental income. If a tenant moves out due to fortuitous events, the landlord has the right to deduct the amount of the loss from the security deposit he or she holds.
- Help pay for property repairs and fix property damage left by the tenant. Some tenants can be negligent and several damages may result from their stay. The security deposit will aid the landlord in repairing and finding substitutes for the damaged items.
Here’s a Guide to Florida's Security Deposit Laws
1. Florida Security Deposit Limit
A landlord retains discretion over the amount of security deposit they want to collect from a tenant. They have the option to collect as little as a month or as much as three months if he or she desires to do so. There is the risk that a tenant may be turned off if a security deposit is too high.
2. Nonrefundable Fees
In Miami, Florida, the practice of nonrefundable fees depends on a landlord. There’s no provision that it’s illegal to do so. It’s best to include and highlight nonrefundable fees in the lease agreement.
3. Storing a Tenants Deposit in Florida
The following are three ways to keep a security deposit in Miami, Florida:
A) Non-interest-bearing account
This limits the tenant’s security deposit from being mixed with other funds. The landlord cannot touch it unless the tenant violates the lease agreement.
In such a situation, the security deposit may be utilized as payment for rental loss and property damages.
B) Interest-bearing account
A tenant can expect a share from the interest accumulated from the annual average earned in the account where the security deposit is placed. It can’t be combined with other funds. A landlord cannot touch it before the amount is due. If a breach of contract occurs, a tenant will not be given their earned interest from the deposit.
C) Surety bond
The landlord must post a $50,000 surety bond. It’s also limited to where the landlord’s property is located. The tenant is further entitled to earning the accrued 5% annual interest generated from the surety bond.
4. Written Notice after Security Deposit Receipt
In Miami, Florida, landlords are required to provide a written notice to the tenant upon receiving the security deposit. It’s important that it's completed in 30 days. The following details must be shown in the notice:
- Bank name and location where the security deposit is kept;
- Disclosure if the security deposit of a tenant is combined with other funds;
- And disclosure on the amount of the interest rate that will be earned and information whether it’s contained in an interest-bearing or non-interest bearing account.
Any changes or movements of the security deposit must be disclosed to the tenant. The landlord is obligated to provide written notice and it must not exceed 30 days.
5. Reasons to Withhold a Tenant’s Security Deposit in Florida
The conditions to withhold a tenant’s security deposit are the following:
- Property damage occurred and it must be fixed. This should exclude normal wear and tear.
- A loss that occurred when a tenant committed a breach of contract.
- Payment for additional violations a tenant has committed in the terms and conditions of the lease.
- Cover for losses resulting from a tenant’s unpaid rent.
6. Walk-Through Inspection
There’s no requirement for a walk-through inspection in Miami, Florida.
7. Florida Security Deposit Return
A landlord must observe the 15-day period when it comes to the refund of a tenant’s security deposit. Since the tenant is entitled to the interest earned from an interest-bearing account, it should be added to the security deposit refund.
If the refund will only be given partially, a written list of deductions must be included. This must be accomplished in 30 days or the landlord risks their claim to the percentage of the security deposit.
8. Change in Property Ownership
Should there be a change in property ownership in Miami, Florida, a written notice must be given to the tenant. The new landlord will be responsible for the tenant’s existing security deposit. They will also shoulder the duties and responsibilities of the previous landlord.
If you have specific questions, hire the services of a qualified Florida attorney. Alternatively, you can seek help from a knowledgeable property management company.
Kindly note that this blog should not be used as a substitute for legal advice from a licensed attorney in Florida. Laws frequently change, and this post might not be updated at the time of your reading. Please contact us for any questions you have in regard to this content or any other aspect of your property management needs.