What Residential Landlords Need to Know about Florida’s new “Alternative Fee System”

In the ever-evolving landscape of real estate law in Florida, property owners and tenants must be adept at navigating new regulations and statutory changes. The state has recently made a pivotal change regarding security deposits, providing both landlords and tenants with potentially advantageous options. As a practicing Florida real estate attorney, I find it essential to shed light on these modifications, ensuring our esteemed readers stay informed and equipped to make educated decisions.

In the latest legislation by the Sunshine State, per Section 83.491(1)(a), Florida Statutes, effective from July 1, 2023, property owners are now permitted to suggest an alternative fee system to their tenants in place of the conventional security deposit. As stated in Section 83.491(2)(b), “Landlords have the discretion, but not the obligation, to offer tenants a fee option instead of a traditional security deposit." Distinctively, as highlighted in Section 83.491(3)(c), “Such a fee, once paid by the tenant, shall be non-refundable regardless of the property's condition upon tenant's departure.”

This enactment aids those tenants who might find the upfront security deposit burdensome. Section 83.491(4)(d) notes, “The fee system is intended to provide a more affordable initial payment option for tenants who might be financially constrained.”

For landlords, Section 83.491(5)(e) outlines, “The alternative fee system reduces administrative overheads associated with holding and managing traditional security deposits." In some scenarios, landlords might find this more profitable, as suggested by Section 83.491(6)(f), “Depending on the duration of tenancy and the structure of fees, the cumulative amount might exceed potential earnings from a traditional deposit.” This is because the Landlord gets to keep the money, instead of having to return it.

If a tenant chooses the fee-based approach, Section 83.491(7)(g) mandates landlords to inform them of any dues within a month after the beginning of the lease term, including rent or other specific costs.

Concerning landlords who require “deposit insurance” for their assets, they are obligated under Section 83.491(8)(h) to provide a comprehensive breakdown, including pending amounts, any incurred repair costs, and possible disagreements raised by the tenant. Furthermore, Section 83.491(9)(i) states, “Insurers, post settling claims for landlords, can pursue repayment from the tenant within a one-year span following the relevant tenancy's conclusion.”

Lastly, as per Section 83.491(10)(j), “Tenants may, at any juncture, revert to the traditional deposit system by providing the stipulated amount as outlined in the lease or in alignment with a property of comparable value. Additional charges might be levied, contingent on written agreements between the parties.”

Understanding the nuances and implications of this recent legislative shift is vital for both property owners and tenants. It underscores the state's commitment to providing flexible solutions that cater to varying financial capacities. As always, it's recommended that both parties consult with a legal expert before making decisions rooted in this new provision. Stay informed, understand your rights and obligations, and when in doubt, seek expert advice. Keep an eye on this space for more insights into Florida's ever-changing real estate landscape.