Fees in lieu of security deposits? What renters need to know

Building a good relationship with your landlord is critical, and oftentimes, paying a hefty security deposit is the first step to gaining trust. But those lump sum payments could be replaced by monthly fees, which critics have dubbed  “junk fees.”

WINK News viewer Kathie Hayes sent our daily investigators a question on this topic. She wrote, “Haven’t heard anything on the news about DeSantis signing into law that landlords can now charge a junk fee…is this true?”

WINK Investigates reporter Kellie Miller researched the law and spoke to a local real estate specialist for some additional insight.

The law Hayes is referring to is HB 133: Fees in Lieu of Security Deposits. It allows landlords give their tenant the option to pay a recurring monthly fee instead of an upfront deposit. But the term “junk fee” is nowhere to be found in the law’s text.

Summary of law: Authorizes landlord to offer tenant option to pay fee in lieu of security deposit; provides requirements relating to certain notices, filing of insurance claims, options for paying fee, & written agreements between landlord & tenant to pay fee in lieu of security deposit; prohibits landlord from accepting certain payments; specifies landlords have exclusive discretion whether to offer tenants such option; prohibits landlord from approving or denying application for occupancy based on prospective tenant’s choice to pay fee in lieu of security deposit.

Supporters believe the law gives renters flexibility if they don’t have the funds for a big deposit upfront. However, various advocacy groups in Florida, including Florida Watch and Florida Rising, argue it’s not that simple.

The law does not establish boundaries for monthly fees, so they can be as low or high as landlords choose. Critics also argue the nonrefundable monthly fees could become the norm, and exploit renters altogether. 

Christine Pecoraro, president of MP Realty Group of MVP Associates believes this new law actually backfires on everybody. 

“The landlord doesn’t have what it doesn’t have, so there’s a benefit to having that money held up front in escrow,” she said. “It protects the renter; it protects the landlord. This new law protects nobody. Anybody can promise anything. But it’s that exchange of money that holds people accountable.”

Florida representative Jim Mooney introduced the bill in January. It was signed into law by Governor Ron DeSantis on June 2, and takes effect July 1.

If you have questions, send an email to kellie.miller@winknews.com.