Redecorating Fee Must Be Included in Calculation of Gross Rent

August 17, 2009
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Redecorating fees, and any other type of fee, which are charged to a tenant for services required as a condition of occupancy, must be included in the calculation of gross rent, according to guidance provided by the Florida Housing Finance Corporation (FHFC). And, these redecorating fees may be charged to the resident as long as they do not cause the gross rent to exceed the maximum tax credit limits.

If the redecorating fees cause the gross rent to exceed the maximum tax credit rent limits, the FHFC will notify the IRS. Under these circumstances, non-optional redecorating fees charged to households must be refunded or credited to the tenant.

If an owner wishes to increase the security deposit to an amount that would include a redecorating fee, the FHFC says it is permissible. However, it warns property owners that they must still administer security deposits in accordance with Section 83.49 of the Florida Residential Landlord and Tenant Act.

PRACTICAL POINTER: Managers of mixed-income communities in Florida can charge redecorating fees to market-rent households because market-rate units are not rent restricted.