A security deposit is typically paid to guarantee that the property will be left in good condition. Rent in advance is also often paid (typically the last month’s rent). The Landlord and Tenant Act mandates how landlords (not real estate brokers) must account for and handle tenant’s deposits and advance rents. The landlord is typically the owner of a dwelling unit. When money is given to a landlord as a security deposit or advance rent, the landlord is obligated to account for such deposits in one of three ways:
- Hold the money in a separate non-interest-bearing Florida bank account fir the benefit of the tenant. The landlord may not commingle , hypothecate -that is, pledge as security for a debt-or use any such funds until the funds are due the landlord.
- Hold the money in a separate interest-bearing Florida bank account for the benefit of the tenant. In this case the landlord must pay the tenant at least 75% of the annualized average interest rate payable on the account or 5% per year simple interest, whichever the landlord elects. The landlord must not commingle, hypothecate, or use any such funds until actually due the landlord.