Security deposits play a vital role in Florida rental agreements, serving as a safeguard for landlords and motivating tenants to take care of the property.

For both landlords and tenants, understanding Florida’s security deposit laws is essential to preventing disputes and ensuring legal compliance. If you're a new landlord, have faced expensive deposit-related issues in the past, or prefer to avoid the complexities of managing deposits, partnering with a professional property manager can offer peace of mind.

That’s where Everest Realty comes in—providing expert guidance and property management services to help landlords navigate Florida’s rental landscape with confidence. Read on to learn what qualifies as a security deposit in Florida—and why it matters.

Key Takeaways

Florida law provides clear rules on how landlords must handle, hold, and return security deposits to protect both parties.
Florida does not set a legal cap on security deposits, allowing landlords flexibility to set amounts. However, they must avoid overcharging and meet disclosure requirements.
Only specific costs like unpaid rent and damage beyond normal wear and tear are deductible from deposits.
Disputes over deposits require written notice, and tenants have legal rights to challenge improper deductions.

What Is a Security Deposit for Rent?

Under Fla. Stat. § 83.49, landlords and tenants are given specific responsibilities regarding the handling, return, and use of security deposits.

A security deposit is distinct from advance rent or other fees, and its purpose must be clearly outlined in the rental agreement. It is a sum collected at the start of a tenancy to protect the landlord against potential losses, such as unpaid rent, excessive property damage, cleaning expenses, or breaches of the lease terms. Deposits also serve as an encouragement for tenants to maintain the property in good condition.

Landlords have the discretion to collect various deposits or advance rent, but it must be clearly stated whether these are refundable. If a tenant pays in advance but chooses not to occupy the unit, they may not be entitled to a refund unless otherwise stated in the lease.

How Much Can a Landlord Charge for a Rental Deposit in Florida?

While it’s common practice across Florida, including in Palm Coast, to charge one to two months’ rent as a security deposit, the state does not impose a statutory cap. This gives landlords flexibility in setting the amount.

However, it’s important not to overcharge. Even without a legal maximum, an excessively high deposit may discourage prospective tenants and reduce your return on investment. When deciding on the amount, consider practical factors such as whether the unit is furnished, if pets are allowed, and any perceived risk factors.

Important reminder on pets: Pet deposits are permitted unless the animal is a service animal—in which case, landlords are not allowed to charge extra.

Can a Landlord Raise the Security Deposit?

Landlords may increase the security deposit under specific conditions, such as when a lease is renewed or a new agreement is signed. Changes may also occur if the tenant adds pets or additional occupants. In some cases, an increase is warranted if risk factors change—such as tenant behavior or modifications made to the property.

Any change to the deposit must comply with legal notice requirements, including proper advance written communication.

How Should Landlords Hold and Return a Security Deposit?

According to the Florida Statute § 83.49, there are three legal methods to hold a security deposit:

A non-interest-bearing account held in a Florida financial institution and kept separate from other funds.
The tenant can either get 75 percent of the interest earned or a straightforward 5 percent simple interest each year from an interest-bearing account.
You can put up a surety bond in the county where the rental is and pay 5 percent simple interest every year.

Notification Requirements

Within 30 days of receiving the deposit, landlords are required to provide tenants with written notice. It must include the following:

Name and address of the financial institution
Type of account (interest-bearing, non-interest-bearing, or surety bond)
Applicable interest rate or terms

If the deposit needs to go to a different account, the tenant still needs to be told within 30 days.

Return Timeline and Procedure

If no deductions are made, the deposit must be returned within 15 days after the tenant vacates the rental property. If deductions apply, the landlord has 30 days to send a written itemized notice by certified mail to the tenant’s last known address. Then, the tenant has 15 days to object in writing after receiving the notice.

Reminder: When landlords don't give tenants the required notice, they lose their right to make claims.

What Can Landlords Deduct From Security Deposits?

Be careful when listing deductions from security deposits, as there are both permissible and non-permissible deductions. Permissible deductions include the following:

Unpaid rent or outstanding balances
Broken windows, large holes in walls, or other damage that goes beyond normal wear and tear
Cleaning fees if the unit is left in an unreasonably dirty condition
Lease violations that cause monetary loss (e.g., unauthorized pets or occupants)
Contractual fees, such as early termination penalties, if specified in the lease

As for non-deductible items, necessary services like routine maintenance, as well as normal wear and tear, cannot be deducted from the security deposit. So don’t list natural faded paint, carpet wear from foot traffic, minor nail holes, dead lightbulbs, or minor bathroom tile wear—among others.

To justify deductions and prevent disputes, do the following:

Conduct pre- and post-move inspections
Use checklists and take date-stamped photos to document the unit's condition
Provide an itemized list of deductions with clear evidence
Limit deductions to restoration, not improvements

Tip: Document every step as backup in case of future disputes.

What Happens If There’s a Dispute Over the Security Deposit Return?

Landlords must send the notice of deductions by certified mail and include a detailed itemized list along with supporting evidence. Disputes often stem from perceived unfair deductions. Encourage open communication to resolve issues early.

If that fails, tenants may submit a demand letter, citing state law and relevant documentation. Under Florida law, tenants have 15 days to dispute the deductions in writing.

If no resolution is reached, either party may proceed to court. The prevailing party will be awarded the remaining deposit, along with any interest, legal fees, and court costs.

How Does Florida Law Protect Tenants and Landlords regarding Security Deposits?

Florida law establishes clear rules to protect both tenants and landlords. It defines the legal methods for holding security deposits, sets strict timelines for providing notice and returning the deposit, and requires that any notice of deductions be sent by certified mail. Tenants are also given the right to dispute deductions and pursue legal remedies if a landlord fails to comply with the law.

Additional protections under Florida law also help ensure fairness and accountability. If the property is sold, the security deposit must be handed over to the new owner, and the tenant must receive written notice. In the meantime, landlords can't get back at tenants for standing up for their rights.

Precise record-keeping is essential for safeguarding against tax and legal liabilities. Note that any portion of the deposit withheld for unpaid rent is considered taxable income, whereas amounts used for repairs are not.

Understanding these protections helps both landlords and tenants avoid costly legal issues and maintain a professional rental relationship.

Local Expertise Matters

Florida’s security deposit laws are generally straightforward but can become complex depending on lease terms, property condition, and the nuances of landlord-tenant relationships. To ensure a smooth rental experience and full legal compliance, landlords must handle deposits properly—from collection to return.

If you need assistance navigating the deposit process or want to ensure you're managing tenant funds by the book, Everest Realty is here to help. We aid Palm Coast landlords in managing their rentals easily, keeping everything compliant, and steering clear of any hassles. Contact us today for a free rental analysis and expert property management support!

FAQs

1. What is the maximum security deposit a landlord can charge in Florida?

Though not legally capped, security deposits in Florida usually equal one to two months' rent, varying based on factors like pets or furnished properties.

2. How should landlords properly store and refund a tenant’s security deposit?

In Florida, security deposits must be held in a Florida bank account or surety bond. The return of these deposits is mandated within 15 to 30 days, contingent on any deductions. Written notice is required within 30 days.

3. What deductions are permissible from a tenant's security deposit?

Deductions may be made for unpaid rent, damages beyond normal wear and tear, cleaning costs, or violations of lease terms. Normal wear and routine maintenance cannot be deducted.

4. What if a tenant disputes a deduction?

Tenants have 15 days to object in writing. Should an amicable resolution not be achieved, either party retains the right to take the matter to court.

The Most Common Questions on Security Deposits in Florida