Orlando has a higher percentage of renters than most other cities, with fewer than 40% owner-occupied homes in the city. This creates plenty of opportunity for real estate investors to profit off of rental properties, but not without knowledge of the law.
Each state has specific laws and regulations regarding security deposits, and Florida is no exception. The last thing you want is to get hit with a court date because you fail to comply with the law.
Read on to learn everything you need to know about collecting, returning, or using security deposits in Florida.
How Big Can Orlando Security Deposits Be?
When you're signing on a new tenant, there are several steps you should take. The first is to screen applicants to ensure they're a good fit. The second is to provide a clear lease that includes information about:
- Monthly rental amounts
- Rent due dates
- Fees for late rent
- Security deposit amounts
- Additional fees and deposits
In the state of Florida, there are no specific laws regarding maximum deposit amounts. However, that doesn't mean landlords should run rampant and charge several months' rent. To protect your property while remaining competitive, charge one to two months' rent for security deposits.
How Can You Make a Claim on Security Deposits?
You've decided to make a claim on a security deposit, meaning that you're going to use some or all of a tenant's deposit to cover certain maintenance costs or late rent. This is where Florida security deposit laws do come into play.
If a tenant fails to pay rent, you may collect that amount from their security deposit without notice. If you intend to use a tenant's deposit to cover damages after move-out, you have 30 days to provide the tenant with written notice. In your notice, you must specify how much you're withholding and why.
If you intend to return the security deposit in full, you have 15 days from the time the tenant's lease ends to do so.
What Should Security Deposits Cover?
Security deposits do not cover all the maintenance you'll need to do after a tenant moves out. For example, if you just need to address basic wear and tear, you'll need to cover that with your own financing. Security deposits can cover:
- Unpaid rent
- Extraneous cleaning fees
- Damages exceeding typical wear and tear
If you allow tenants to keep pets on your property, you can charge an additional, non-refundable pet fee upon move-in. Keep in mind that you can't charge pet fees for registered service or emotional support animals.
Right House Can Help
When done properly, security deposits can protect Orlando landlords from shouldering the cost of excessive cleaning or maintenance. However, you must follow all Florida laws when charging, using, or returning a security deposit. If you're struggling to keep up with state laws and regulations, property management can help.
Right House Realty has been in the business of driving property investor success in Orlando since 2021. Both our broker and property manager can strengthen your portfolio and ROI. Let us know how we can be of service today.
