Landlord-tenant conflict isn't uncommon, and security deposits are a major cause of these conflicts. Florida's landlord-tenant laws allow you to charge a security deposit upfront. It protects you from financial losses if the renter causes damage to the property, and for renters, paying a security deposit is a sign of intent and goodwill.
If you're a first-time or accidental landlord, you might think you only need to ask for the deposit. But if you're not careful, you could make costly mistakes that can even land you in court.
Continue reading for a list of some of the common security deposit mistakes Orlando landlords make and how to avoid them.
1. Not Following Florida's Security Deposit Laws
While state law allows you to collect a deposit, you must do so under specific regulations. They include:
- Deposits can only be held in a surety bond, interest-yielding account, or non-interest-yielding account
- Landlords must within 30 days from the onset of tenancy inform the renter where their security deposit is held, and if it's interest-earning
- Deposits must be returned within 30 days after the end of the tenancy if there are deductions, and within 15 days if there are no deductions.
Needless to say, violating any of these rules can get you sued by the tenant. At the very least, you could rack up negative reviews and struggle to attract new tenants.
2. Not Following Industry Best Practices for Security Deposit Limit
In Florida, there's no limit to the amount of security deposit landlords can require. However, this doesn't mean you should use the freedom to exploit renters. Some good security deposit advice would be to ask renters to pay two to three months of rent as a security deposit, depending on the type of property.
For example, if your property is fully furnished, you're justified to ask for a bigger security deposit because you risk losing a lot of money if tenant damage is excessive. Luxury unfurnished properties can also command bigger security deposits.
3. Improper Security Deposit Deductions
When a tenant moves out, you're legally required to return the security deposit after making the allowed deductions: These include:
- Unpaid rent
- Damaged caused by the tenant (beyond normal wear and tear)
- Any fees specified in the lease agreement, such as early lease termination fees or move-out inspection fees.
Unfortunately, a few overzealous landlords sometimes want to deduct more than they deserve. They could deduct the cost of move-in cleaning, yet the departing tenant left the property in a reasonably clean condition. Or they could try to charge for replacing a floor that was worn out from regular use.
A tenant won't hesitate to file a dispute if they feel the itemized list you provided includes unjust deductions. Stick to the rules to minimize such disputes.
Treat Security Deposits With the Caution They Deserve
These are the common mistakes Orlando landlords make with security deposits. Following the law and ensuring transparent communication with the tenant goes a long way in preventing conflict.
You can also go a step further and entrust the management of security deposits to a company offering property management in Orlando. PMI Main Street Management MGMT has the experience and technology to provide residential and commercial property owners with the highest quality of services.
Schedule a consultation to discuss your needs with one of our experts.
