How To Keep a Tenant’s Security Deposit and Not Get Sued
By Cody McCaughan, Esq.
Security deposits are at the center of many landlord-tenant disputes, and I deal with them on a daily basis. One of the most commons reasons I get contacted by landlords is because a tenant trashed their unit, moved out early, or didn’t pay last months’ rent. Just as often, I get calls from tenants explaining that their landlord wrongfully withheld their security deposit, and they want to sue. In Florida, Landlords are in a very strong position in these disputes if they followed the law, and common sense, in keeping the deposit.
Send the Security Deposit Claim Letter within 30 Days of Tenant Vacating
If you plan to keep any portion of a tenant’s security deposit, you must send the tenant a written security deposit claim letter within 30 days of the tenant vacating the unit. A text or email will not suffice, the letter must be on paper, and should follow the form set out in the Florida Landlord and Tenant Act. If you fail to send the letter, or fail to include the proper information in the letter, then you must return the deposit, although you still have the right to sue the tenant for damages, but not until after the deposit is returned.
Know What You Can Legally Deduct From the Deposit
As a landlord, you generally have wide discretion to deduct costs, fees, and damages from the security deposit. This can include unpaid rent, late fees, or other amounts due under the lease agreement, as well deductions for actual damage to the property. However, you cannot deduct for reasonable wear and tear, or for damages that were not the tenant’s fault or are not the tenant’s responsibility under the lease terms.
Document Your Damages and Expenses Cause by the Tenant's Wrongful Conduct
There are two important aspects of documenting your security deposit deductions. The first is documentation of the actual event leading to the deduction, such as unpaid amounts due under the lease or damage to the property. It is always a good idea to take pictures of the property before the tenant moves in and after the tenant vacates. In addition, you should keep a basis ledger of actual amounts paid by the tenant for rent or other obligations under the lease.
The second type of documentation consists of receipts or invoices showing actual out-of-pocket expenses necessary to repair damage to the property caused by the tenant. Remember, in a legal dispute over the deposit, showing that the damage was caused by the tenant is only half of the battle, you also want to be able to prove the actual cost to fix the damage in order to justify the amount of the deduction.
If Tenant Objects, Consider Returning a Portion of the Deposit
This is where things get more complex, and failing to act properly can end up costing you an amount far in excess of the deposit. Florida law is clear that in litigation over the security deposit, if the tenant obtains a judgment entitling them to the return of any portion of the withheld amount, the tenant is considered the prevailing party in that this litigation, which obligates the landlord, as the non-prevailing party, to pay the tenant’s attorney’s fees.
For example, if you withhold a $5,000.00 security deposit and the tenant files a lawsuit for its return, and obtains a judgment in their favor for only $100.00, you may have to pay the tenant’s attorney’s fees bill, which can easily exceed the total amount of the deposit.
For this reason, if you retain a deposit, and the tenant objects, you should contact an attorney to determine exactly which deductions you have sufficient evidence to prove in court, and which you are better of returning to the tenant. Making the wrong choice at this stage will create a huge liability for the landlord.
We specialize in representing both commercial and residential landlords in all aspects of landlord-tenant law, including security deposit disputes. If you are considering keeping a tenant’s security deposit, or have already retained a deposit and are involved in a dispute, contact us at (305) 928-4190 for a no-charge consultation.