The bill, HB 133, allows landlords in Florida to charge tenants a nonrefundable, limitless, recurring fee in lieu of a security deposit, or what's been dubbed “junk fees.”
Supporters of the bill — including corporate lobbying interests that stand to turn a profit from it — say it offers tenants an alternative to paying lump-sum security deposits that can often cost upward of one or maybe two months’ rent.
In Florida’s hot rental market, that could be thousands of dollars upfront.
Critics of the legislation have another word to describe the so-called security deposit alternative that the legislation permits, however: “predatory.”
Jay Mobley, an attorney for the Orange County Legal Aid Society who encounters many low-income people in his work, told Orlando Weekly the bill “opens the door for a lot of abuse on the part of bad landlords.”
There are no limits to the fees that landlords can charge as part of this alternative security deposit arrangement, so they could theoretically charge $25 per month, or they could charge $200 per month. “There’s no cap on the fees,” said Mobley.
The bill also garnered opposition from social advocacy groups, as well as labor unions like the Service Employees International Union, which represents many workers in low-wage jobs.
“As written, this legislation leaves working-class renters that are experiencing an affordable housing crisis vulnerable to predatory business practices,” a coalition of advocacy groups wrote in a letter urging DeSantis to veto the bill last month.
“The state is facing a housing crisis, and our communities are being exploited for profit.”
The Republican-sponsored bill was backed by property tech companies like Rhino and Leaselock. It's also similar to a bill that lobbyists for Leaselock helped draft leading up to the start of the 2022 legislative session.
It failed last year, but was revived during this year’s session and streamlined by Republican leaders in the House, referred to just two committees instead of the usual three.
LeaseLock, a company that offers so-called security deposit alternatives to landlords and tenants, has lobbied for similar laws on a local and state level elsewhere.
The company last year came under fire in the state of Maryland for concerns that it violated the state's consumer protections law.
Maryland’s State Attorney reached a settlement with the California-based company, which is blocked from offering such “alternatives” to landlords.
“LeaseLock’s program effectively had tenants paying their security deposits monthly, but, at the end of the lease, tenants got nothing back,” Maryland State Attorney General Frosh said in a statement at the time. “Under this settlement, tenants will get their money back from LeaseLock unless the funds were lawfully withheld for past due rent or damage to the property.”
Florida’s HB 133 doesn’t necessarily require landlords to offer this security deposit alternative.
It’s a choice, not a mandate, Florida Rep. Jim Mooney, a Republican who sponsored the bill, had argued.
Still, State Rep. Anna Eskamani, D-Orlando, told the Orlando Sentinel in April that for people who can’t afford a security deposit, it may not end up feeling like much of a choice.
“A never-ending fee compared to paying $2,000 upfront is, for many people, potentially cheaper, but if I don’t have $2,000 and the legislature has offered no caps on security deposits, then of course I’m going to choose a perpetual fee,” she said.
In Florida, there’s no cap on how much a landlord can charge for security deposits, nor how much they can charge for rent. But under this bill there’s also not a cap on this so-called security deposit “alternative.”
“It’s not designed to protect the tenant at all,” Mobley argued. “A security deposit covers a tenant’s liability for damage. This fee does not, unless the property owner decides to purchase an insurance policy which benefits only him, only the landlord, not the tenant.” So, a company like Rhino or Leaselock could go after a tenant for damages. "You have someone who's paid for an insurance product through a landlord for maybe a couple years, and then at the end of it, it doesn't benefit the tenant at all because they're still responsible for all of the damages."“It’s not designed to protect the tenant at all,” said local attorney Jay Mobley.
tweet this
Prior to its passage, some Democrats — including Eskamani — filed amendments to the bill to try and level the playing field for tenants.
All of them failed, similar to attempts by Democrats this session to water down other controversial bills targeting collective bargaining rights for public employees, LGBTQ rights, and abortion access.
But it wasn’t passed strictly along party lines either.
Several Florida Democrats joined Republicans in voting in favor of the bill, including Orlando-area Sen. Linda Stewart, who’s term-limited from seeking reelection, and Sen. Jason Pizzo, a South Florida Democrat whose family owns a property management company in New Jersey, and who’s been tapped to become the next Florida Senate Democratic leader following the 2024 elections.
Also on Friday, DeSantis signed into law 11 other bills, none quite so controversial as this one, save for a bill cracking down on kratom (an herbal substance that has stimulant and opioid-like effects).
This all comes on the heels of DeSantis approving legislation banning rent control, while another bill that’d wipe out local tenant protection ordinances (including a tenant’s bill of rights in Orange County) has yet to reach his desk.
DeSantis also formally announced his 2024 run for president last week in a botched campaign launch on Twitter. So his record will be subject to a high level of scrutiny in the months to come.
Update 6/5/23: A previous version of this story stated that the Florida Apartment Association backed HB 133. The FAA did not directly support this bill. A FAA representative contacted us to let us know of the error, which we regret.
Follow us: Google News | NewsBreak | Reddit | Instagram | Facebook | Twitter
