Security Deposit Laws in Texas

In Texas, most residential leases require a security deposit. A security deposit helps cushion the landlord against property damage caused by a tenant’s negligence or carelessness. In most cases, the security deposit is equivalent to one month’s rent.

According to the Texas security deposit laws, landlords must follow specific rules when handling a tenant’s security deposits. If they don’t, there are bound to be consequences. For help with managing your property in Lubbock, Texas contact us today and see how we can give you the peace of mind you deserve.

Here is a quick FAQ on the Texas security deposit laws:

1. Do Texas security deposit laws put a cap on the amount a landlord can charge a tenant for the security deposit?

No, it does not. Landlords have a right to charge whatever amount they see fit.

While this may be the case at a state level, city and county laws may have limits on the exact security deposit amount. Landlords may also negotiate the amount according to certain criteria. For instance, they may charge according to the tenant’s rental history.

2. Do landlords in Texas have to provide written notice after receipt of the renter’s security deposit?

No, they don’t. Landlords don’t have to give Texas tenants a written receipt for the deposit.

3. How should landlords store a tenant’s deposit in Texas?

Unlike other states, Texas security deposit law doesn’t dictate how landlords should store a tenant’s security deposit.

4. What if the landlord sells the Texas property?

The previous owner must forward all security deposits to the new landlord when a property changes hands during the lease period.

The previous landlord will still be held accountable for the security deposit in Texas so long as the tenants haven’t received a Change of Management/Ownership notice from the new owner. Under Texas rental laws, once the notice is given the new owner is solely responsible for the security deposits.

The notice should state the new landlord is now in possession of the security deposits and also state the exact amount of security deposit received.

5. Do Texas landlords and tenants need to perform a walk-through inspection?

No, it isn’t required. A walk-through inspection is when both the tenant and the landlord go through the rental unit to inspect it. This is because tenants need to leave the rental in the same condition as when they moved in.  

6. Can a landlord keep all or part of the security deposit?

Yes, they can. Like in other states, Texas landlord-tenant law specifies that a landlord has a right to keep all or part of the renter’s security deposits depending on certain situations.

A landlord may keep all or some of the security deposit at the end of the tenancy if:

• The tenant breaches the written lease, and the landlord suffers financially as a result of the breach.
• The tenant fails to give a written notice of lease termination.
• The tenant breaks the lease agreement early. The landlord may subtract the cost of finding a replacement tenant from the tenant’s security deposit.
• A tenant uses their security deposit as last month’s rent. Tenants may not only be liable for the landlord’s attorney fees but they may also need to pay the landlord three times the amount of rent.
• There’s damage to the landlord’s rental property. Damage is different from normal wear and tear of the dwelling.

Understanding the difference between normal wear and tear and excessive property damage is vital to avoid legal issues in small claims court.

7. What happens when a tenant signs a lease, pays the deposit but doesn’t move in?

In this case, the landlord has a right to mitigate. Texas rental law states that a landlord can charge reletting fees of up to 85% of one month’s rent. Or they can deduct their actual costs to find new tenants when a lease isn’t fulfilled.

8. When should a tenant expect their security deposit back?

Unless the security deposit was claimed to cover loss or damage, a landlord must return the security deposit at the end of the lease.

On the day the tenant moves out of the rental unit, the landlord has 30 days to refund the deposit to the tenant. The only exception to this general rule is if the landlord doesn’t have the tenant’s forwarding address. In this case, the landlord must wait until the tenant provides it.

The landlord can also demand an advance written notice of the move as a condition for refunding the deposit. That being said, a landlord can only do this if this requirement was highlighted in the lease or rental agreement.

If there is damage to the property, the landlord has a right to make deductions provided they include an itemized list of expenses. In this case, the damages must be over normal wear and tear. Examples of property damage that warrant security deposit deductions include:

• Huge stains on the carpet
• Multiple holes in the walls
• Broken windows and doors

A landlord must send the renter an itemized list of such damages, their estimated cost of repair, and the balance of the tenant’s security deposit. If the landlord doesn’t, then they forfeit the right to make any deductions from the security deposit.

The landlord may also need to pay for the financial loss the tenant has suffered in his or her efforts to recover the deposit from the landlord.

However, the landlord doesn’t need to give the tenant the list of items to be deducted if:

• There’s no disagreement regarding the amount of deposit owed, and if
• The tenant owes rent when he or she moves out of the rental unit.

Wrongfully withholding a tenant’s security deposit may attract penalties in Texas. These penalties usually include paying for the tenant’s attorney fees plus paying the renter three times the security deposit amount.

This overview of the security deposit laws in Texas is only meant to be informational. For specific questions, please seek help from a qualified Texas attorney. You could also review section 92.101-109 of the Texas Property Code for the full scope of the law.