Florida Security Deposit Law: Requirements for Holding & Return of Security Deposit

Florida security deposit law outlines specific rules for holding, managing, and returning deposits, ensuring transparency and fairness. This guide covers everything you need to know about Florida security deposit rules, including collection limits, account requirements, and timelines for returning the deposit. 

Whether you’re a landlord or tenant, understanding these laws can help you ensure compliance in 2024.

For more details, you can refer to the full resources at Manage Central Florida Property.

No Maximum Security Deposit Limit

Under Florida security deposit law, there is no limit on how much landlords can charge for a security deposit. However, local cities or counties may impose their own limits. Generally, landlords request deposits equivalent to one to two months' rent, depending on:

• Property Value: High-value or luxury properties may require larger deposits.

• Tenant Screening: Tenants with lower credit scores or rental history issues may face higher deposit requirements.

• Market Standards: Local rental market conditions can influence the typical deposit amount.

Landlords should balance protecting their investment with offering reasonable terms to attract tenants.

Requirement for a Separate Account

Florida law requires landlords to keep security deposits in a separate account within a bank or financial institution located in Florida. This ensures the tenant's funds are safeguarded and not mixed with the landlord's personal or business finances. Landlords have three options for managing security deposits:

1. Non-Interest-Bearing Account: This is the simplest option, and landlords are not required to pay tenants any interest on the deposit.
2. Interest-Bearing Account: Deposits can be placed in an account that earns interest. In this case, landlords must pay tenants either 5% simple annual interest or 75% of the interest earned. Payments can be made yearly or credited toward rent.
3. Surety Bond: Instead of using a bank account, landlords can post a surety bond for the deposit amount. This bond guarantees the security of the tenant’s funds and also requires the landlord to pay 5% simple annual interest to the tenant.

Within 30 days of receiving the security deposit, landlords must notify tenants in writing about:

• The name and address of the financial institution holding the deposit.
• Whether the account is interest-bearing or non-interest-bearing.
• The interest rate, if applicable.

This written notice ensures transparency and helps tenants understand how their funds are being managed. If the landlord changes the account or terms, they must provide an updated notice within 30 days of the change. Failure to comply with these requirements can lead to disputes or penalties.

Procedure for Returning the Deposit

Returning the security deposit in Florida is governed by specific rules to ensure fairness and transparency. Landlords must follow a strict timeline and provide proper documentation if deductions are made: 

• No Deductions: If no deductions are made, the landlord must return the entire deposit within 15 days after the tenant moves out.
• With Deductions: If deductions are necessary, the landlord must send a written notice to the tenant within 30 days of the lease ending. This notice must explain the reasons for withholding part or all of the deposit.

Failing to follow these timelines can lead to legal penalties, and landlords may lose the right to withhold any portion of the deposit. Learn more about lease termination and holdover rules in Florida to avoid legal issues by reviewing Florida Quit and Holdover.

Landlords can deduct from the security deposit for specific reasons, including:

• Unpaid Rent: Any rent owed by the tenant at the time of lease termination.
• Property Damage Beyond Normal Wear and Tear: Examples include broken windows, large holes in walls, or stained carpets.
• Unpaid Utilities: Outstanding utility bills that were the tenant’s responsibility.
• Excessive Cleaning Costs: Cleaning expenses beyond standard expectations.

To ensure compliance, landlords must document all deductions thoroughly. This includes:

1. Itemized lists of damages or outstanding payments.
2. Receipts or estimates for repairs and cleaning.
3. A clear explanation of each deduction to prevent disputes.

Florida law requires landlords to notify tenants in writing within 30 days if deductions are being made from the deposit. This notice must include:

• An itemized list of deductions with explanations.
• The remaining deposit amount (if any).
• Language mandated by Florida Statutes (§ 83.49).

Tenants then have 15 days to dispute the deductions. If they do not object, landlords must return any remaining deposit balance within 30 days of the initial notice. If the tenant objects, the landlord may need to resolve the matter in court.

Failing to provide this written notice within the 30-day window forfeits the landlord’s right to withhold any part of the deposit. In such cases, the landlord must return the full deposit, even if damages or unpaid rent exist.

Florida Security Deposit Deductions

Landlords can make deductions from the deposit only for valid reasons under Florida security deposit law:

Common reasons for deductions (damage, unpaid rent)

• Excessive Damage: Damage beyond normal wear and tear, such as broken appliances, large holes in walls, or stained carpets.
• Unpaid Rent: Any outstanding rent owed by the tenant can be deducted. Evictions and unpaid rent in Florida often play a role in justifying these deductions under Florida law.
• Cleaning Costs: If the property is left in an unclean state, landlords may deduct reasonable cleaning fees.

Legal requirements for notifying tenants about deductions.

Landlords must notify tenants in writing within 30 days if they plan to make deductions.

The written notice must comply with Florida security deposit rules, including detailed explanations for claims.

Failing to meet these requirements can result in forfeiture of the landlord’s right to withhold funds, and they may need to return the full deposit.

Conclusion

Florida security deposit law is essential for both landlords and tenants to ensure smooth rental transactions. Landlords must follow strict Florida rental deposit law rules for holding and returning deposits, including maintaining separate accounts and meeting notification deadlines. Tenants, on the other hand, should be aware of their rights to a timely and fair return of their deposit.