Today I had a conversation with a good friend who just rented a residential property she owns. She asked me a question about how I handle my tenant security deposits. Florida state law says that tenant security deposits must be kept in a separate non-interest bearing bank account in Florida. As in, you cannot “commingle” (mix) deposit money and business operating money in one account.
Apparently she had asked a long-time seasoned landlord the same question and he said that no one ever checks and he keeps his deposits in his operating account.
Early on in my (not so?) illustrious landlord career, I asked another long-time landlord the same question and she said that, yes the state law says that but she keeps her tenant deposits in an interest bearing account. Granted, the number of units she owns number in the hundreds so the interest earned on her deposits would be substantial. Mine? Not so much.
Regardless, I like to follow the law to the letter so that if I’m ever in front of a judge for any reason to do with landlord-tenant issues, the judge will have absolutely no choice BUT to find in my favor. Believe me, in my experience it’s worked like that before. To quote the judge, “Ma’am, if you want to stay there you MUST pay the rent. It’s the law.” And this was after asking me all these questions about the eviction procedure to see if I screwed up on my procedure.