Surety Bond Encyclopedia

Tenant Lease Bond - Statewide in Florida

Brief Summary

If you are a Florida landlord, this bond is what lets you stop holding your tenants' security deposits in a segregated account and put that money to work. It is one of three options Florida gives you under section 83.49, not a requirement, and it is capped at $50,000 no matter how many units you own. One thing to know before you choose it: posting the bond obligates you to pay your tenants 5 percent simple interest per year on their deposits.

Florida Statutes section 83.49(1)(c) lets a landlord post a surety bond with the clerk of the circuit court instead of holding tenant security deposits and advance rent in a separate account. The bond amount is the total of the deposits and advance rent held, or $50,000, whichever is less. It is executed by the landlord as principal, runs to the Governor for the benefit of any tenant injured by the landlord's violation of the section, and must be written by a surety licensed in Florida. A landlord who chooses this option must also pay tenants 5 percent per year simple interest.

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How to Apply for a Tenant Lease Bond:

Add up the security deposits and advance rent you currently hold across all tenants. That total, capped at $50,000, is your bond amount.
Count the Florida counties you rent dwelling units in. Five or more opens the single Secretary of State filing at up to $250,000 instead of a bond per county.
Have your legal entity name exactly as it appears on your leases and your Florida registration.
Owner or principal information and authorization for a credit review.
Complete the bond application and review the quoted premium.
Pay the premium and receive the executed bond, signed by you as principal and by the surety.
File it with the clerk of the circuit court in the county where the dwelling unit is located, or with the Secretary of State if you qualify under the five county provision. Call the clerk first, since filing procedure and any recording fee are set locally.
Update your lease or send written notice within 30 days stating that you have posted a surety bond as provided by law.
Set up the 5 percent per year simple interest payments to tenants that come with choosing this option.

Detailed Information About the Florida Tenant Lease Bond:

The landlord posts this bond, not the tenant

This is the single most common misunderstanding about this bond, and most pages about it online have it backwards.

Under Florida Statutes section 83.49(1)(c) the bond is executed by the landlord as principal. It runs to the Governor for the benefit of any tenant injured by the landlord's violation of the section. It guarantees the landlord's faithful compliance with the security deposit rules. A tenant does not buy it, and it does not protect a landlord against a tenant who trashes the place or stops paying rent. That risk is handled by the deposit itself, by insurance, or by a lawsuit.

It is optional, and it is one of three choices

Section 83.49(1) gives a Florida landlord holding security deposits or advance rent three ways to comply. Hold the money in a Florida banking institution in a non-interest-bearing account, separate from the landlord's own funds. Hold it in an interest-bearing account and pay the tenant either 75 percent of the annualized average interest rate or 5 percent per year simple interest. Or post this surety bond.

Nobody is forcing you into the bond. You choose it because segregating deposits in a separate account ties up cash you would rather deploy, and the bond releases that money.

The catch nobody mentions

A landlord who posts the bond must also pay the tenant interest at the rate of 5 percent per year, simple interest. That obligation is written into the same paragraph that authorizes the bond.

So the real comparison is not bond premium against nothing. It is bond premium plus 5 percent interest, weighed against what you can actually do with the deposit money once it is no longer sitting in a segregated account. For a landlord holding a meaningful amount of deposits that math often works. For a landlord holding very little, it usually does not.

Two amount tiers, and the five county line

The standard bond is filed with the clerk of the circuit court in the county where the dwelling unit is located. The amount is the total of the security deposits and advance rent you hold on behalf of tenants, or $50,000, whichever is less.

A landlord or landlord's agent engaged in renting dwelling units in five or more counties has a second option. Rather than posting a separate bond with each county clerk, that landlord may post a single bond with the office of the Secretary of State, in the total amount held or $250,000, whichever is less.

Five counties is the line. Below it, you file county by county. At or above it, one filing with the Secretary of State can cover the whole portfolio.

Notice, and the penalty for getting it wrong

Section 83.49(2) requires the landlord to give the tenant written notice, either in the lease agreement or within 30 days after receiving the money. Where the landlord has posted a bond, the notice must state that the landlord has posted a surety bond as provided by law, rather than naming a depository.

Missing that 30 day window is expensive. Under section 83.49(3)(a), a landlord who fails to give the required written notice within the 30 day period forfeits the right to impose a claim upon the security deposit and may not seek a setoff against it. The landlord can still sue for damages, but only after returning the deposit first.

This is not the fee in lieu of a security deposit

Florida added section 83.491, which lets a landlord offer a tenant the option to pay a nonrefundable fee instead of a traditional security deposit. It is a genuinely different thing and the two get confused constantly.

The statute is explicit that a fee collected under section 83.491 is not a security deposit as defined in section 83.43(13). No clerk of court is involved, and the required disclosure has to tell the tenant in capital letters that the fee is not a security deposit and that paying it does not absolve the tenant of any obligations under the rental agreement. A landlord may use fee revenue to buy insurance or a surety bond, but the fee itself is neither one.

If you are collecting real security deposits, section 83.49 and this bond are what apply to you.

Eligibility and Requirements for a Florida Tenant Lease Bond:

A surety company authorized and licensed to do business in the state of Florida.
The landlord executed as principal on the bond, not the tenant.
Bond running to the Governor for the benefit of any tenant injured by the landlord's violation of section 83.49.
Amount equal to the total security deposits and advance rent held, or $50,000, whichever is less. Up to $250,000 on a Secretary of State filing by a landlord renting in five or more counties.
Filed with the clerk of the circuit court in the county where the dwelling unit is located, or with the Secretary of State under the five county provision.
Entity name on the bond matching your leases and your state registration.
Owner credit review. On a bond this size credit generally shapes the rate rather than deciding whether you can be bonded.

Florida Tenant Lease Bond FAQs:

Does this bond protect me from a tenant who damages my property or skips out on rent?

No, and this is the thing almost everyone gets wrong about it. You are the principal on the bond and it guarantees your compliance with Florida's security deposit rules. It runs to the Governor for the benefit of any tenant injured by your violation of section 83.49. Damage and unpaid rent are what the security deposit itself, your insurance, and an eviction or damages action are for.

Am I required to post it?

No. Section 83.49(1) gives you three ways to handle security deposits and advance rent. A separate non-interest-bearing account at a Florida banking institution, a separate interest-bearing account paying the tenant 75 percent of the annualized average rate or 5 percent simple interest, or this bond. The bond is the option you pick when you would rather not have the deposit money sitting in a segregated account.

How much bond do I need?

The total of the security deposits and advance rent you hold on behalf of your tenants, or $50,000, whichever is less. The cap matters. A landlord holding $400,000 in deposits still posts $50,000, because the statute takes the lesser figure.

I rent in several counties. Do I need a bond in each one?

Only below five. A landlord or landlord's agent renting dwelling units in five or more counties may post one bond with the office of the Secretary of State instead of a bond with each county clerk, in the total amount held or $250,000, whichever is less. Below five counties, you file with the clerk of the circuit court in each county where the dwelling unit is located.

What does the bond cost?

You pay an annual premium rather than the face amount. On a bond of this size the premium is driven mainly by the owner's personal credit, and the bond amount itself sets the base. We do not publish a percentage here because a real quote depends on your file. Apply and see your actual number, it takes a couple of minutes.

Do I still owe tenants interest if I post the bond?

Yes, and it is easy to miss. The same paragraph that authorizes the bond requires the landlord to pay the tenant interest at the rate of 5 percent per year, simple interest. Factor that in alongside the premium when you decide whether the bond beats a segregated account.

What do I have to tell my tenants?

Section 83.49(2) requires written notice, either in the lease agreement or within 30 days after you receive the money. If you have posted the bond, the notice states that you have posted a surety bond as provided by law instead of naming a depository.

What happens if I miss the 30 day notice?

Under section 83.49(3)(a) a landlord who fails to give the required written notice within the 30 day period forfeits the right to impose a claim upon the security deposit and may not seek a setoff against it. You can still file an action for damages, but you have to return the security deposit first. It is a real penalty and it is avoidable with one paragraph in the lease.

Is this the same as the fee in lieu of a security deposit?

No. Section 83.491 lets you offer a tenant a nonrefundable fee instead of a traditional deposit, and the statute says plainly that such a fee is not a security deposit as defined in section 83.43(13). No clerk filing is involved and the disclosure has to tell the tenant in capital letters that the fee is not a security deposit. You may use fee revenue to buy insurance or a bond, but the fee is not itself either one.

My commercial landlord is asking me for a lease bond. Is this it?

Probably not. Section 83.49 is in Part II of Chapter 83, which covers residential tenancies, and this bond is something a landlord posts. A commercial landlord asking a tenant to guarantee a lease is asking for a private lease guarantee bond, where the landlord is the obligee and the terms come from the lease rather than from a statute. That is a different product. Send us the lease language and the requested amount and we will tell you which one you actually need.