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When it comes to asset management, there’s a lot to learn, and mistakes can cost you dearly.
Handling security deposits is something that you, as a landlord, will need to know about!
The purpose of a security deposit is to protect you against financial loss. In the State of Florida, there’s no limit on how much you charge as a security deposit. However, one or two months’ rent is usually considered reasonable.
Read on for a quick summary that will get you up to speed with a few landlord-tenant laws in Florida.
Managing Security Deposits
The following information is just to get you familiar with a few important facts. If you want more detail, why not chat with an Orlando-based property consultant?
Here are five things to know:
1. Receiving and Storing a Security Deposit
Storing a security deposit takes a little money management and legal compliance. In Orlando, you have to give your tenant written notice within thirty days of receiving the security deposit.
The notice should detail the name and address of the place where the funds are kept. You will also need to include whether you’re storing their deposit separately or combining it with others.
2. Walk-Through Inspections
According to Florida’s landlord-tenant laws, walk-throughs aren’t necessary. However, conducting a property inspection is a good practice to keep. When a tenant moves out, a security deposit will cover the following:
- Damage beyond expected wear and tear
- Breach of contract such as early lease termination
- Unpaid utility bills
You should expect your property to be returned to you in the same condition as when you first rented it out.
3. Withholding a Security Deposit
Your tenants need to uphold all the conditions of their lease agreement. If they don’t, you are entitled to withhold their deposit relative to the breach of contract.
4. Security Deposit Returns
When a tenant moves out, you need to refund the deposit within fifteen days. However, if there are deductions, you have an additional fifteen days to make the transfer. If you don’t make the refund within the allocated time, you lose the right to claim any deductions.
In addition, you also need to pay any interest that has accrued on the deposit amount. If this sounds confusing, it doesn’t have to be. Property management services include keeping track of owner statements and reporting security deposits.
5. Selling Your Property
If you decide to sell your property while the lease is still active, you might choose to return the deposit to the tenant right away. The other option is to transfer it to the new landlord, who will take over that obligation.
Shouldering the Responsibility
Security deposits are a critical factor in protecting you from bad tenants. Going in prepared will put you in a better position to deal with certain stressful situations that come with being a landlord. Nevertheless, property management can become extremely challenging.
It's never a bad thing to know your rights as an Orlando property owner, but you don’t have to bear all the responsibility alone. Chat with the Home River Group Orlando for sound property management advice!
