12 Things Landlords Should Know About Texas Security Deposit Law

Every Texas landlord should be familiar with security deposit law in Texas. Not following the law could result in the landlord losing the right to keep a tenant's security deposit and may incur legal costs.

  • Wednesday, October 19, 2016

  General   Tips   Texas   

Every Texas landlord should be familiar with security deposit law in Texas. Not following the law could result in the landlord losing the right to keep a tenant's security deposit and may incur legal costs. Some counties and cities also have their own supplemental codes, so it will pay landlords to check with their local city or county hall for any additional or replacement regulations. These 12 points will help landlords to understand their rights and responsibilities.

  1. Landlords have a right to require tenants to pay a security deposit at the start of the tenancy.
  2. There is no state-wide upper limit on the amount. Many landlords stay in line with the amount other landlords hold. Landlords may also negotiate the amount according to criteria such as a tenant's known rental history.
  3. Landlords do not have to give a written receipt for the deposit.
  4. Landlords are free to hold the deposit in any form, and in any account of their choice.
  5. Landlords may keep all or some of the security deposit at the end of the tenancy when:
    • The tenant breaches the lease, and the landlord incurs charges as a result of the breach
    • The tenant damages the landlord's property, where the damage exceeds what would be considered normal wear and tear
    • The tenant fails to give advance notice of termination - provided the penalty for failure is clearly marked in the lease document (either printed in bold, or underlined)
    • The tenant breaches the lease and finds, or the landlord finds, a satisfactory replacement tenant to take over the lease. The amount of security deposit that may be withheld is calculated according to the costs incurred by the landlord in finding a tenant and/or creating the new lease agreement. Any remaining deposit amount, over and above those costs, must be returned to the tenant.
  6. Landlords must return the security deposit at the end of the lease unless it is claimed to cover loss or damage, etc.
  7. The deposit must be returned within 30 days unless the tenant did not leave a forwarding address. In this case the landlord does not have to make any effort to find the tenant.
  8. End-of-lease walk-throughs are not required, but if all or part of the deposit is retained, the landlord must send an itemized list of damage and estimated cost of repair, along with any unretained deposit.
  9. If the landlord does not give the tenant such an itemized list, the tenant may reclaim the deposit, and the landlord may be liable for legal costs.
  10. If there is no damage, but there is unpaid rent due, the landlord may keep the security deposit.
  11. Should any security deposit be retained unfairly, the landlord may be liable for the tenant's legal fees associated with reclaiming the deposit, plus up to three times the deposit figure withheld.
  12. When a property changes hands during the lease period, the previous owner must forward all security deposits to the new landlord. The new landlord must inform the tenant how much security deposit they received and where it is being held. The previous landlord remains liable for the deposit until this notice is received by the tenant.

This list is not intended to be exhaustive, since individual counties and cities may vary rights and responsibilities, but it does cover the essential matters. Any landlord who wants to check the original legislation will find it in the Texas Property Code, Section 92.101-109. Texas' goal is to be fair to both parties, and to keep the need for paperwork to a minimum.

Please don't hesitate to contact us for more information.


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