7 Basics of Texas' Security Deposit Law
Learn the Law in the Lone Star State
If you decide to collect a security deposit from your tenants in the state of Texas, you must be aware that there are certain rules you must follow. If you fail to follow the law, you could lose your right to keep any portion of your tenant’s security deposit, even if you had the right to make the deduction. Here are seven basic security deposit rules every Texas landlord should know.
7 Frequently Asked Questions:
- Security Deposit Limit- None.
- Storing Deposit- No Rules.
- Written Notice After Receipt- Not Required.
- Keeping Deposit- Breach of Lease, Damage, Live Out Security Deposit, Improper Notice.
- Walk-Through Inspection- Not Required.
- Returning Deposit- Within 30 Days' of Move-Out.
- Selling Property- Transfer Deposits to New Owner.
1. Is There a Security Deposit Limit in Texas?
2. Storing The Security Deposit in Texas
There are no requirements for how a landlord must store a tenant's security deposit in the state of Texas.
3. Is Written Notice Required After Receipt of the Security Deposit in Texas?
No, a landlord does not have to provide written notice to the tenant after receiving a security deposit in Texas.
4. Reasons You Can Keep a Tenant’s Security Deposit in Texas
In the state of Texas, a landlord may be allowed to keep all or a portion of a tenant’s security deposit for the following reasons:
- Breach of lease.
- Damage in excess of normal wear and tear.
- If a tenant attempts to “live out” their security deposit as last month’s rent, the tenant may be liable to pay the landlord three times the amount and any of the landlord’s attorney fees.
- If a tenant does not give advanced notice before vacating the unit, and it is clearly spelled out in the lease (either underlined or in bold print) that failure to give advanced notice will result in the tenant forfeiting their right to the security deposit, the landlord may be able to keep the tenant’s security deposit.
- a. If the tenant has breached their lease but finds a “satisfactory” replacement tenant who will move-in on or before the lease ends, the tenant will still be entitled to the return of their security deposit, minus any additional charges.
- b. If the landlord finds a “satisfactory” replacement tenant who will move-in on or before the lease ends, the landlord can still deduct expenses incurred from finding the replacement tenant including time spent to do so. If the lease agreement included a lease cancellation fee, the landlord is still allowed to charge the tenant this fee.
5. Is a Walk-Through Inspection Required in Texas?
6. Returning a Tenant’s Security Deposit in Texas
In Texas, the landlord has 30 days from the date the tenant moves out to return the tenant’s security deposit. The exception to this rule is if a tenant had not provided a forwarding address. In this case, a landlord does not have to make any effort to return a security deposit until the tenant provides the landlord with his or her forwarding address.
If the landlord has made any deductions from the tenant’s security deposit, the landlord must send the tenant the balance of their security deposit along with a written itemized list of any damages and the approximate cost of repair. The landlord is not required to include this list if the tenant owes the landlord rent at lease termination and there is no discrepancy regarding the amount of rent owed.
If a landlord attempts to wrongfully withhold a tenant’s security deposit, the landlord may be responsible for three times the amount of deposit withheld plus attorney's fees. If the landlord does not provide written notice of any damages for the portion of security withheld, the landlord gives up the right to withhold any of the security deposit and may have to pay any attorney fees the tenant incurred trying to recover their deposit.
7. What Happens to the Security Deposit If You Sell Your Property?
In the event that you sell your property, or the property otherwise changes ownership, you are responsible for transferring the security deposits to the new owner. You will be liable for these deposits until the new owner issues a signed written notice to the tenants informing them that they are now in possession of the security deposits and the exact amount of security deposit received. Once this notice is given, the new owner is solely liable for the security deposits.
What Is Texas’ Security Deposit Law?
If you are interested in viewing the actual text of Texas' security deposit law, please consult Texas Property Code Section 92.101-109