Florida Security Deposit handeling property management

Posted: September 11th, 2015

Congrats you just rented your home! What can you do with the security deposit?

Well you can’t use that money as a downpayment on BMW. Florida statutes 83.49 has some specific rules what you can and can’t do with that security deposit.

The relevant parts of the Landlord Tenant law for where to place the security deposit is as such:

83.49 Deposit money or advance rent; duty of landlord and tenant.—

(1) Whenever money is deposited or advanced by a tenant on a rental agreement as security for performance of the rental agreement or as advance rent for other than the next immediate rental period, the landlord or the landlord’s agent shall either:

(a) Hold the total amount of such money in a separate non-interest-bearing account in a Florida banking institution for the benefit of the tenant or tenants. The landlord shall not commingle such moneys with any other funds of the landlord or hypothecate, pledge, or in any other way make use of such moneys until such moneys are actually due the landlord;

(b) Hold the total amount of such money in a separate interest-bearing account in a Florida banking institution for the benefit of the tenant or tenants, in which case the tenant shall receive and collect interest in an amount of at least 75 percent of the annualized average interest rate payable on such account or interest at the rate of 5 percent per year, simple interest, whichever the landlord elects. The landlord shall not commingle such moneys with any other funds of the landlord or hypothecate, pledge, or in any other way make use of such moneys until such moneys are actually due the landlord; or

(c) Post a surety bond, executed by the landlord as principal and a surety company authorized and licensed to do business in the state as surety, with the clerk of the circuit court in the county in which the dwelling unit is located in the total amount of the security deposits and advance rent he or she holds on behalf of the tenants or $50,000, whichever is less. The bond shall be conditioned upon the faithful compliance of the landlord with the provisions of this section and shall run to the Governor for the benefit of any tenant injured by the landlord’s violation of the provisions of this section. In addition to posting the surety bond, the landlord shall pay to the tenant interest at the rate of 5 percent per year, simple interest. A landlord, or the landlord’s agent, engaged in the renting of dwelling units in five or more counties, who holds deposit moneys or advance rent and who is otherwise subject to the provisions of this section, may, in lieu of posting a surety bond in each county, elect to post a surety bond in the form and manner provided in this paragraph with the office of the Secretary of State. The bond shall be in the total amount of the security deposit or advance rent held on behalf of tenants or in the amount of $250,000, whichever is less. The bond shall be conditioned upon the faithful compliance of the landlord with the provisions of this section and shall run to the Governor for the benefit of any tenant injured by the landlord’s violation of this section. In addition to posting a surety bond, the landlord shall pay to the tenant interest on the security deposit or advance rent held on behalf of that tenant at the rate of 5 percent per year simple interest.

Here are a few takeaways from the above statute:

83.49 (1)- This paragraph defines what money we are actually talking about. If a tenant gives you first, last and security the landlord must consider the last month and security deposit as money that should be placed in escrow. Any money that is for rent other than the next rental period and for security deposit must be placed in one of the three allowable ways.

83.49(1)(a)- Landlords or their agent must place the deposited funds in a Florida non interest bearing account with out commingling the funds.

83.49(1)(b)- If the landlord wants to place the funds in a interest bearing account in Florida then she must pay the tenant a portion of the interest received.

83.49(1)(c)- The third option is for the landlord to post a surety bond in the tenants behalf of $50,000

If you are having any questions on how to handle your security deposit please contact your attorney. If you would like us manage your property contact us on the form to the right or call us.

Our company only charges two fees to manage your property which is a initial tenant placement fee and a monthly management fee. We do not charge lease renewal fees, markup on maintenance, lease prep fees, security deposit handling fees or any other type of fees. We always have a property manager on call to handle a tenant emergency 24/7. If you are looking for a property manager to manage your portfolio or single home please call us at 561-358-6755 and speak to one of our property managers.