Collecting a security deposit is a standard practice when renting properties. This money allows you to protect your interests in at least a small way. The deposit works to provide you with money to make repairs in the event a tenant damages your property before moving out. However, a security deposit is not income for you.
According to the Florida Statutes, when a renter gives you a security deposit, you must put that money into an account that is separate from your other money. The account may gather interest or not, but if it is an interest-bearing account, then you must pay the tenant either 5% interest or a minimum of 75% of the actual accrued interest. You may also post a surety bond and pay the tenant 5% interest. In any case, it is important that you do not mix security deposit money with other money, such as rent payments or your personal accounts.
Receiving the deposit
If you have more than five renters, then within 30 days after receiving the rent or within the lease, you must inform the tenant in writing where you will hold the security deposit and if he or she will receive interest. The notice also should contain a disclosure telling the tenant how to receive the security deposit back once he or she moves out and what will happen if you decide to keep the deposit. You must also notify the tenant in writing if you move the money after this point within 30 days of the change.
Returning the deposit
You have 15 days to return the deposit when a tenant moves out. If you intend to keep the deposit, you have 30 days to provide notice of this. The tenant then has 15 days to object. You cannot keep the security deposit because the tenant fails to give a proper move-out notice, but you do not have to pay interest to a tenant who does not honor the lease provisions.