Landlords in Miami need to be aware of the laws governing security deposits. In Florida, landlord and tenant law is governed by the Florida Statutes, Chapter 83. This law sets out the specific requirements that landlords must follow when it comes to security deposits. In this article, we share what landlords in Miami, Florida, need to know about security deposits.
This article content is for informational purposes only. It is not intended to give any legal advice and may include outdated information as laws changes. Please refer to the Florida Tenant and Landlord Law or consult a lawyer.
In this article, landlords in Florida will learn about the following:
What is a security deposit?
How much can a landlord require for a security deposit?
The responsibilities of landlords when collecting security deposits
Disbursing the security deposit
Claiming the security deposit
What is a security deposit?
A rental security deposit is money a landlord requires from a tenant when signing a lease agreement or before the tenant moves in. Florida landlords may use the security deposit to cover any damages the tenant may cause to the property during their stay.
By definition, according to Florida law:
"Security deposits" means any money held by the landlord as security for the performance of the rental agreement, including, but not limited to, monetary damage to the landlord caused by the tenant's breach of the lease before the expiration of the lease.
CHAPTER 83 LANDLORD AND TENANT PART II RESIDENTIAL TENANCIES 83.43 Definitions. (12)
How much can a landlord require for a security deposit?
There is no defined limit on the amount Florida landlords can require as a security deposit for a lease agreement. However, the amount should be reasonable. In Miami, the typical amount for a security deposit is equivalent to one month. However, in some cases, two months is required.
Cases where two security deposits are required:
Some landlords or property managers require two months' rent as a security deposit instead of first, last, and one-month security. They require two months' security instead of last month's rent to maximize the amount they can claim if they need to seek damages.
Condo associations may require a separate security deposit for common areas. In this case, a landlord may collect two months of security and pay one to the association, or the tenant will pay one deposit to the landlord and the other to the association.
The responsibilities of landlords when collecting security deposits
As a landlord, it's essential to understand how to handle security deposits and advance rent. Here are some critical points for landlords to keep in mind:
Landlords must hold the security deposit in a separate account at a Florida banking institution for the tenant's benefit. The landlord may keep the funds in a non-interest-bearing or interest-bearing account. (Keep it simple and hold funds in a non-interest-bearing account.)
Suppose the landlord chooses to hold funds in an interest-bearing account. In that case, the landlord must pay the tenant at least 75% of the annualized average interest, or 5% per year simple interest.
Landlords in Florida cannot mix the security deposit or advance rent with any other funds or use it as collateral until it is due. For example, if last month's rent is collected, it should remain in the account until the end of the last month has ended.
Alternatively, you can post a surety bond and pay the tenant 5% annual interest. (This is uncommon in Miami)
When the lease ends, the landlord must pay or credit the tenant for any due interest. However, no interest will be due if the tenant wrongfully ends the lease before the end of the term.
Suppose you rent out five or more dwelling units. In that case, you must notify the tenant in writing within 30 days after receiving the security deposit or advance rent. This notification should include where you are holding the money, the interest rate (if any), and when the payments will be made.
If the landlord owns five or more units
You must provide written notice to the tenant within 30 days of receiving advance rent or a security deposit.
Suppose you change the manner or location where you are holding the advance rent or security deposit. In that case, you must notify the tenant within 30 days of the change. This notification should be given in person or by mail. It should include the name and address of the bank where the money is held or state that you have posted a surety bond as allowed by law.
The landlord is not required to give notice if the bank has merged with another financial institution, changed its name, or transferred ownership to a different financial institution.
The notice should include the following:
The bank's name
The bank's address
State whether or not the tenant is entitled to any interest on the deposit.
It is advisable for landlords to get into the habit of providing a security deposit disclosure, even if they currently own less than five rental units. This can help establish a straightforward process for handling security deposits, which can be beneficial if the landlord ends up owning more than five properties in the future.
Disbursing the security deposit
Landlords need to understand the process for returning a security deposit after a lease has concluded. Here are some steps to follow:
Once the lease is over, the landlord has 15 days to send the security deposit to the tenant.
Collect the tenant's new mailing address. If the landlord cannot get the tenant's new address, the landlord may mail it to the rental property's address. In most cases, tenants set up mail forwarding with USPS.
The landlord should mail the security deposit to the tenant's most recent known address via certified mail. Using certified mail ensures that the tenant receives the deposit and that there is a record with tracking numbers of the landlord sending it.
By following these steps, landlords can ensure that they return a security deposit to the tenant promptly and transparently.
Claiming the security deposit
If a landlord intends to claim a security deposit, there are specific steps they need to follow:
The landlord has up to 30 days to notify the tenant in writing via certified mail to their last known address.
If the landlord cannot get the tenant's new address, they can send the notice to the property that the tenant was renting. The tenant may have forwarding services in place to receive mail.
After the tenant receives the notice, they have 15 days to object to the claim in writing.
If the landlord does not provide this notice within 30 days, they forfeit their right to claim the security deposit. However, they can still file a suit against the tenant for damages after returning the deposit to the tenant.
Suppose the tenant does not object within 15 days of the claim. In that case, the landlord may deduct the claim amount from the security deposit. If there is a remaining amount, the difference should be sent to the tenant within 30 days after the date of the claim notice.
The tenant may still seek damages in a separate suit even if they did not object. If the tenant objects to the claim made on the security deposit, the landlord should contact an attorney.
Conclusion
Landlords and property managers in Miami must understand and follow the laws related to security deposits. By following these tips, landlords can avoid issues and ensure they handle security deposits fairly and responsibly. It's important to remember that proper management of security deposits protects the landlord's interests and helps build trust and maintain a positive relationship with tenants.
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