Landlords and property managers in Orlando collect a security deposit from their tenants to cover property damage beyond regular wear and tear, and to limit the financial loss of tenants breaking their lease early or not paying rent.
In Orlando, there’s no limit to what you can collect in a deposit, but there are strict restrictions that dictate where you hold it and how you inform your tenants of its location. The most important part of the security deposit, however, is its return.
Expensive mistakes are often made with the security deposit return, and we want to help you avoid them.
Collecting and Holding a Security Deposit
Before you can return a deposit, you have to collect it. Once you do, you are required to disclose to your tenants in writing whether a security deposit will be held in an interest or non-interest bearing account. Other information you have to provide includes the rate and time of interest payments, and the address of the bank where the security deposit is held (it must be a bank with a Florida branch location). The law requires you to provide this information within 30 days of receiving a security deposit, so it’s easiest to include the information in your lease agreement.
It’s extremely important that you don’t co-mingle your tenant’s security deposit with your own funds. Make sure you have a separate account in place.
Returning Your Orlando Tenant’s Security Deposit
Florida law requires landlords to return a tenant’s security deposit within 15 days of move-out if there are no reasons to deduct money from that deposit.
If you do need to deduct because of tenant damage, cleaning costs, or past due rent and utilities, you’ll have to return the remaining deposit and a detailed accounting within 30 days. Remember that you cannot deduct from the security deposit for normal wear and tear items. Things like small nail holes from where pictures were hung and scuff marks on the carpet from furniture are the responsibility of the landlord.
How to Handle a Security Deposit Dispute
Be prepared for tenants who may dispute what you’re charging. Make sure that you take detailed pictures and notes before the tenants move in and after the tenants move out so you can demonstrate how the condition of the home has changed. If there’s clear evidence of abuse, misuse, or neglect and you have the photos to back that up, your tenants probably won’t take it any further. This is why move-in and move-out inspections and photographs are so critical.
Be ready to compromise with tenants if there’s any question about whether your deduction is justifiable. Going to court will only be expensive and time consuming, and you may have to pay penalties and damages that far exceed the original deposit amount. Showing up in small claims court to defend a $100 security deposit claim is not in your best interests.
Security deposits are a useful and necessary tool for landlords, but they become a problem when the appropriate laws are not followed. To ensure that you comply with the applicable laws as an Orlando landlord, make sure you know the requirements, or work with an Orlando property management company that can help you stay in compliance.
We can help with any security deposit questions or conflicts. Contact our talented team at R. Russell Properties.