The following are some important aspects of the security deposit claim process.
Two Types of Claims. Under Florida law, there are essentially two types of claims: 1) damages caused beyond normal wear and tear, and 2) monies owed under the lease agreement.
“Damages beyond normal wear and tear”. This standard is somewhat vague, and Florida courts have ruled differently on the subject, depending on the facts presented. The less serious the damage, the less likely a judge or jury will consider it to be “damage beyond normal wear and tear”. Thus, sound discretion is key here, and consulting your attorney to get a legal opinion is helpful.
Note: Florida courts generally do not see house or yard cleaning as “damages beyond normal wear and tear”. The condition would be have to be excessively dirty for the court to consider it damage.
Note: for this reason above, you should consider including a lease provision that requires the tenant to pay for a house cleaning fee, rather than rest your claim on the gray area of “damages beyond normal wear and tear”. The same can be done for other routine items that cost you or the owner money upon each tenant move-out. This takes out the guessing game of the gray situations.
Monies Owed Under the Lease. Florida courts enforce contract terms, as long as they are not unconscionable. Thus, to avoid issues about what is “normal wear and tear”, consider charging a fee in the lease agreement for the normal, routine costs/expenses that happen upon a tenant move-out, such as house or floor cleaning fees. That way, the tenant owes the fee, regardless of the question of “damage beyond normal wear and tear”.
NOTE: The fees and the item for which the fee is charged must be specific (e.g. “House Cleaning Fee - $150”; Yard Maintenance Fee - $100; June 2020 Late Fee - $100)
Note: the lease needs to also state something to this effect: “Fees do not include costs of repairing or replacing damages caused during the tenancy, but are charged for normal and routine services for maintaining the items for which the fee is charged.”
IMPORTANT: if you are going to charge such fees in the lease, BE SURE TO ACTUALLY PERFORM THE SERVICE that you are charing for. Otherwise, you could be committing a crime and certainly expose yourself to civil liability, including a class action. This same rule applies for every fee that you charge for, e.g. attorney preparation lease fee, tenant insurance, etc.”.
INSPECTION - “GARBAGE IN - GARBAGE OUT”
Before a tenant moves in, document thoroughly the condition of the home. Without this evidence, it may be difficult to prove that the tenant caused damage during the tenancy.
TIP: Third Party Vendors - there are third party vendors that provide quality services in this regard. See if they can service your needs to document well the condition of the property prior to move-in. If the home is a complicated/complex type of home, consider a matter-port inspection.
30 OR 15 DAY “DROP DEAD” DATE (TIME SENSITIVE)
Upon the tenant vacating the premises upon terminating the lease, you have 15 days to return the deposit if you have no intent to make a claim, or 30 days to make a claim if you do have the intent to make a claim. If you miss this deadline, you must return the deposit to the tenant in full.
Inspect the premises soon after the vacate date, so you have enough time to inspect and investigate damages and make the claim prior to the 30 day deadline.
Note: if the tenant vacates upon the early termination of the lease, take note of that date, because day #1 starts the day after the early vacate.
Note: if the tenant abandons the premises, but you had no knowledge of the tenant abandoning the premises, day#1 for purposes of making a claim on the deposit starts the day after you determine that abandonment has occurred and take possession of the premises. In other words, the tenancy does not terminate simply because the tenant abandoned, but rather, it terminates once you take possession under abandonment. It is the act of taking back possession that terminates the lease under abandonment.
Note: if the tenant surrenders possession of the premises, you have the choice of accepting or rejecting the surrender. If you accept the surrender, that is the date that the tenancy ends, so you should communicate that to the tenant so that there is a clear-cut date that the tenancy terminated. From that date, day#1 starts for purposes of making a claim. If you reject the surrender and do not take possession, you need to communicate that to the tenant and inform him that you will continue to charge rent until such time as you decide to take possession or the lease term ends. The "vacate date upon termination of the lease” will be the date that the lease naturally expires.
NOTICE IN WRITING
The claim must be a notice:
in writing,
Specify the item of damages, and
Specify the amount of damages
Note: address the notice “TO: [all tenant names who remain on the lease]. Since Florida landlord-tenant law is very notice oriented, including all tenant names on the notice will ensure that a tenant does not have a valid objection that you did not mail the notice as to him or her specifically.
CERTIFIED MAIL
The notice must be certified mailed to the tenant’s last known address. (No other kind of notice is sufficient — no emails, text messages, etc.)
If you have actual knowledge of the tenant’s address, even though it is different than what the tenant may have provided you, the best practice is to certify mail it to both locations.
Your lease should state that the notice will be mailed to the last remaining tenant, to a designated tenant, or to whichever tenant the landlord chooses to mail it to, in his or her discretion. Otherwise, you should certify mail the notice to each remaining tenant to avoid the claim that you failed to certify mail it to the tenant.
ABANDONMENT
If the tenant abandons the premises and does not provide you with a forwarding address, you are not obligated to certify mail the notice.
Note: some courts in Florida have imputed the duty to certify mail the notice when the landlord has actual knowledge of the tenant’s address, even though the tenant did not provide the address. Thus, best practice is to always certify mail the notice when you have actually knowledge of the tenant’s address.
SURRENDER
If the tenant surrenders possession, get a forwarding for the tenant. If you don’t and send it to the “last known address” (i.e. the rental property), the tenant won’t get it, and it could result in an unnecessary dispute.
THE CLAIM
Claim only items that are damaged beyond normal wear and tear or for monies that the tenant owes under the lease agreement (e.g. house cleaning fee, unpaid late fee)
For damages beyond normal wear and tear:
If you have questions regarding causation, it may be necessary to have the particular vendor qualified to speak to causation to give you a written opinion about causation.
For example, if there is a broken sprinkler head, and the vendor opines that it was caused by a vehicle driving over it, rather than just normal maintenance issues, then have that vendor write you an email specific to causation so you have support for your claim in the file.
VALUATION OF DAMAGES
DEPRECIATION
You are not permitted to charge the tenant full replacement value for an item that has depreciated in value. The court will depreciate the item that is damaged, and the tenant would owe that depreciated value.
For example, the tenant burns the carpet in the living room; and the carpet is 10 years old. The court will not order the tenant to pay replacement value of the 10 year old carpet; but will order the tenant pay for the depreciated value of the damaged carpet.
For example, if the tenant damages a 5 year old microwave beyond repair, the tenant is responsible to replace a 5 year old microwave of similar like and kind, not to buy a new microwave at full replacement value.
Depreciation of the Item v. Labor of replacing the item. If there is a damaged item that needs to be replaced, you must depreciate the value of the item, but a fair market labor charge can be claimed for having to replace the item. Note: be careful not to include labor that could include other services the vendor provided, and not to include labor for services that are not directly related to the replacement of the damaged item.
ECONOMIC WASTE
There is a legal principle about “economic waste”. That is, if the court has a choice of ordering the tenant to pay the landlord a lesser or greater amount to make the landlord whole, the court will likely choose the lesser amount.
For example, if the tenant damaged the front door, and it can be repaired by applying new paint, the court will not order the tenant to pay for a whole new door.
MATCHING
Be careful about the issue of “matching” and charging the tenant the full costs of having to match an item that is damaged.
For example, if the 10 year old carpet cannot be replaced because the manufacturer does not produce that product anymore, this does not obligate the tenant to replace the entirety of the carpet throughout the home.
This issue can be very complex and delicate. You will need legal consultation to address the issue if it arises.
MOVE-OUT PROCEDURES
Well-stated Move-Out procedures are helpful, but they can cause issues if you rely on them heavily to make a claim for “damages” or for “monies owed under the lease”.
First, if you are going to charge the tenant fees upon the tenant’s vacating the premises, always have those fees disclosed to the tenant in writing at the time of lease signing—either incorporate them into the lease or use an addendum. Fees are always a material term of a contract, and if there are not stated/identified in the agreement, the court would likely rule that the fee is not enforceable given that there was no “meeting of the minds” as to that term. You would then be stuck with “damages beyond normal wear and tear” and would have the burden of proving that damage.
If you intend to make a claim on the deposit for the tenant not following a move-out procedure, the lease agreement or its addenda needs to specify what the item of charge would be and the value of that fee for failure to perform that item.
It is also a good idea to provide the tenant with the move-out procedures at the time of leasing signing, as an addendum, so that the tenant is clearly bound by the move-out procedures.
BALANCE OF THE DEPOSIT
If there is a balance remaining of the deposit after you make a claim, include that in the mail along with the notice. Failing to return that balance within the 30 days is a violation of F.S. 83.49
OWNER DESIRES
If an owner desires or insists that you make a claim for an item that is either not “damage beyond normal wear and tear” or “monies owed under the lease”, inform the owner of your obligations under the law and do not comply just because the owner demands it. You are bound by F.S. ch. 475 and 83, pt. 2, to make only lawful claims and to return the deposit to the tenant within 30 days.
In this situation, it is important to get a legal opinion about the claim so you can document your file as to the legitimacy of the claim or not.
Note: issues of “causation” can be of great importance when an owner insists on make a claim; and having sufficient documentation of pre-move-in and post-move-out conditions is important to support your position; and having a legal opinion from your attorney is important.
TENANT OBJECTION - DISBURSEMENT OF FUNDS
If a tenant objects, it’s best practice not to ignore it, because it can result in litigation, which you want to avoid. Make a practice to respond within a few days to the initial objection, if nothing to state that you received the objection and will provide a response within “X” days. Then, consult your attorney for legal opinion about the claim and objection.
The question arises, “if a tenant objects within 15 days of receiving the notice, do I have to keep the money in the bank account, or can I disburse to the owner or vendors?”
The answer to the question is this:
If you do not intend to return any of the money to the tenant, regardless of the tenant’s objection, then it matters not whether you hold it in the bank or disburse it. Why? Because in either case, you are depriving the tenant of the deposit; and thus, if the tenant were to sue you for the return of the deposit, and if the court were to rule that the claim was not justified, you will be held liable to return the deposit to the tenant. In other words, you get no protection by law, simply by keeping the money in the bank, versus disbursing the money to the owner or vendor. Liability will result if the claim itself was not justified. But be sure of this: once you disburse the money to the owner or vendors, you better be very, very sure that the tenant’s objections are not valid, because you will not get that money back from the owner or vendor; and if the court orders the return of the money to the tenant, you may be on the hook for that.
If, however, you have questions about the sufficiency of the claim, you need legal consultation and need to keep the money in the bank until such time as a determination can be made as to the sufficiency of the claim.
If there is a balance of the deposit after you make a claim, enclose a check to the tenant for that amount along with the notice of intent to make claim. It is unlawful to withhold any balance that you have not claimed within 30 days of the vacate date.
If there is a balance owed by the tenant after the claim is made, here are the options:
Report the balance to a collection company (you have no obligation to do this, unless it’s in your PMA; you could put this obligation on the owner)
The owner can sue the tenant for damages
Note: do not get sucked into the services of a “collector”, because you are not a licensed collector and can be in violation of the law by attempting to collect a debt. Your PMA needs to be clear on this limitation of your authority.
See also, Property Management Law Solutions podcast, Episode 4, on Security Deposit Claims: