SECURITY DEPOSIT CLAIM FORM BASICS

 

One of the basic documents used in real property management, whether apartment complex, single family home or condominium, is the Notice of Claim against Security Deposit, referred to in this article as the “Notice”. It is called other names such as Statement of Account (SODA) or Move-Out Reconciliation. It ranges from a standard form used by many owners and management companies to a letter individually drafted for each rental. A suggested form is at the end of this article.

 

The Statutory Duty

 

Florida Statutes 83.49(3)(a) states: Upon the vacating of the premises for termination of the lease, if the manager does not intend to impose a claim on the security deposit, the manager shall have 15 days to return the security deposit together with interest if otherwise required, or the manager shall have 30 days to give the resident written notice by certified mail to the resident's last known mailing address of his or her intention to impose a claim on the deposit and the reason for imposing the claim.

 

When To Use the Notice

 

The manager only uses the Notice if he is making a claim against the security deposit, other deposits (pet deposit), or any other unused pre-paid amounts (unapplied last month’s rent in case of a resident skip). All of these together will for purposes of this article be referred to as the “deposit”. If the manager is returning the entire deposit, then there is no need to use the Notice. The manager can simply return the entire deposit by first class mail with a cover letter to the last known address. If the manager is claiming any part of the deposit, then the manager must use the Notice. Technically, a good argument can be made that if the only escrow money held by the manager is last month’s rent, then no Notice has to be sent. Nonetheless, we still recommend notifying residents when any escrow money is retained. If the manager is returning part of the deposit, we suggest that the manager send a check for the balance with the Notice, because it provides a certified mail record of the refund check being received (since the Notice must be sent by certified mail), and the check demonstrates to the resident the manager is genuine about returning the portion of the deposit not claimed. If the resident does not get the check with the Notice, then there is a greater chance that he will object to the Notice. One downside to sending the refund check with the initial claim letter occurs when subsequent damages are discovered within the 30-day notice period, and the manager seeks to send a revised claim letter for a greater amount.

 

If the manager is returning all or a part of the deposit, he should return it to the last known address. In the case of multiple residents, the check should be made payable to all the residents jointly (A, B and C). In the case of a deceased resident, the check should be made payable to “The estate of A”.

 

Certified Mail

 

The statute requires that the Notice be sent by certified mail. Use of a return receipt (the green card) is not required, but we have traditionally advised managers to obtain a return receipt. Since managers now have the ability to track receipt of the Notice online, this position can be reconsidered. However, the green card is powerful evidence in court when the resident denies receiving notice. There is an exception to the rule requiring that you send the Notice. We recommend that you not rely upon this exception, unless you have forgotten to send the Notice within 30 days and are now forced to see if you fit within the exception. See our article entitled Forgetting to Send the Security Deposit Claim.

 

The manager may not charge the resident for the cost of the certified mail. It is a duty imposed on the manager by the statute and is not chargeable to the resident.

 

Last Known Address

 

The Notice must be addressed to all the residents. It must be sent to the last known address. If no forwarding address is given, then the “last known address” is the rental, and it is sent to the rental. If the lease contains an address for notice to the resident, then that is the address to use, unless there is a later forwarding address. In the case of multiple residents who may give multiple forwarding addresses, the notice goes to each of the forwarding addresses. If one of the multiple residents gave no forwarding address, that resident’s Notice goes to the rental address. If multiple residents cannot agree in writing to the forwarding address and a check is being sent to them, the manager should send the check to the last agreed address, probably the rental address or the resident notice address in the lease, with copies of the check and the Notice to the resident’s individual forwarding addresses.

 

Date

 

FS 83.49(3) (a) states: If the manager fails to give the required notice within the 30-day period, he or she forfeits the right to impose a claim upon the security deposit. Whatever the date on the Notice, the postmark date is conclusive. If the postmark is not within 30 days of vacating, then the Notice is late. The courts accept no excuses. For more information on timing, see our article entitled Security Deposit Claim and Refund Timing. Note that the failure to timely comply with the statute only bars claiming the deposit. It does not release the resident from his financial obligation to pay the damages. The manager must return the deposit, but the resident can be sent to collections or sued for the damages.

 

Required Statutory Language

 

FS 83.49(3) (a) states: The notice shall contain a statement in substantially the following form:

 

This is a notice of my intention to impose a claim for damages in the amount of _____ upon your security deposit, due to _____. It is sent to you as required by s. 83.49(3), Florida Statutes. You are hereby notified that you must object in writing to this deduction from your security deposit within 15 days from the time you receive this notice or I will be authorized to deduct my claim from your security deposit. Your objection must be sent to (manager's address).

 

Judges are familiar with this wording. While the statute permits some wording changes by only requiring a “substantially” similar statement, you are advised to consult with your attorney before making changes. As you can see, the above wording contains a provision that the manager’s address be included in the Notice. This is the complete manager’s (or agent’s) address, where any resident’s objection should be sent, including P.O. Box/street, city, state and zip.

 

Listing the Damages

 

The Notice only deals with the deposit. It is not required by law to be the complete listing of all the damages but it is highly recommended. Confusion can be avoided if the Notice contains a statement to the effect that the Notice does not waive or limit any of the manager’s rights to damages or amounts due, which may exceed the security deposit or the amounts listed on the Notice. The manager may later send the resident a statement of additional amounts due as a result of further damages found or incurred. It is best to send a statement and not a second Notice form, as sending a second Notice may unnecessarily lead the resident to think that the manager was required to send the second Notice within 30 days also.

 

As used in this article “damages” means physical damages to the premises, cleaning charges, unpaid rent or other accrued charges, and any other amounts charged to the resident. It is good practice to list all known damages at the time the Notice is sent. If the damages exceed the deposit, the resident will have a clearer idea of the true status of the account.

 

We advise against accelerating rent owed through the lease expiration date. This is not a right created by Florida Statute 83.595, the statutory section outlining a manager’s collection rights. The disclaimer on the Notice indicating that amounts not listed are not waived should eliminate any doubt that future rents will later become a valid, additional claim if the manager is unable to relet the premises prior to the lease expiration date.

 

Damages Detail

 

The purpose of the statute is to give notice to the resident of the disposition of his deposit. To effectuate that purpose, the courts require that the Notice contain sufficient detail to apprise a reasonable person such that he could make an informed decision as to objecting to a damage item claimed or the charge for that damage. A manager should ask the question, “If this Notice is given to a judge, will he be able to ascertain what was damaged and how much it cost?”

 

The following represent bad practice claims: claiming the deposit without listing any damages; listing the damages without amounts; lump-sum damages, such as “rent, damages and cleaning: $900.00”; and summary listings, such as a long paragraph of the individual itemized damages followed by a total amount. If you are considering referencing an automatic deposit forfeiture on the Notice, please first review our article entitled Forfeiture of the Security Deposit.

 

The Notice can refer to another attached or enclosed list that itemizes the damages and amounts, such as a move-out reconciliation or a final inspection form.

 

The Math

 

All too often the math is wrong. Check and re-check your math. Most importantly, is the balance owed the manager or the refund to the resident correct?

 

An incorrect Notice

 

If you find that you have made a mistake on the Notice, see our article entitled Revising the Security Deposit Claim.

 

Resident Objection

 

FS 83.49(3) (b) states: Unless the resident objects to the imposition of the manager's claim or the amount thereof within 15 days after receipt of the manager's notice of intention to impose a claim, the manager may then deduct the amount of his or her claim and shall remit the balance of the deposit to the resident within 30 days after the date of the notice of intention to impose a claim for damages.

 

The resident has 15 days from receipt of the Notice within which to object to the Notice. Prudent managers wait 20 days, adding another 5 days in case the resident mails his objection on the last day. Since the Notice is sent certified, the manager can track it on-line at the post office website (www.usps.com\). The manager can see when the certified mail is delivered. If it remains undelivered, it will be returned to the manager, who has fulfilled his statutory duty regardless that the mail has been returned. For more information on the resident’s objection time, especially for realtors disbursing the funds see our article entitled The 15 Day security Deposit Dispute Period.

 

Although not covered in this article, in case of a resident objection, see our article entitled The Resident Security Deposit Dispute. Note that the debt is now “disputed”, and it must be referred to as “disputed” in any communications. If the debt has been sent to collections or reported to a credit bureau, they must be informed that it is now "disputed".