Texas Security Deposit Laws

Texas Laws Regulating Security Deposits

The Texas Property Code (specifically Title 8, Chapter 92, Subchapter C) outlines how Texas landlords can handle security deposits, including deposit limits, return timelines, and deduction procedures.

Important note: Review Texas landlord-tenant laws and check local ordinances before including security deposit terms in your next lease to ensure you follow the law.

Maximum Security Deposit Amount

Maximum amount: Texas law doesn’t cap security deposit amounts. Landlords typically set the deposit amount based on factors like the property’s value, average rental rate, and their assessment of tenant risk.

Pet deposits: Texas landlords can charge any amount for a pet deposit, as long as they include the amount in the lease agreement. Under federal law, however, landlords cannot charge pet deposits, fees, or rent for service animals or emotional support animals (ESAs) (Fair Housing Act).

Penalties: The courts may presume bad faith if a landlord doesn’t return the security deposit or supply an itemized list of deductions within 30 days after the tenant leaves the property. In that event, the landlord could owe $100, three times the amount wrongfully withheld, and the tenant’s reasonable attorney fees (Texas Property Code § 92.109(a)).

Handling Damage Deposits

Security deposit storage: Texas landlords don’t have to put a tenant’s security deposit in a separate account or disclose where they deposited the funds.

Interest-bearing account: Texas law does not require landlords to put security deposits into interest-bearing accounts.

Receipt: Texas landlords don’t have to provide tenants with a receipt for the security deposit.

Documentation: To avoid disputes, Texas landlords should complete move-in and move-out condition reports (with photos and videos) before and after every tenancy. These reports document the property’s condition before it changes hands and help identify any damage caused by the tenant.

Ownership transfer: If a landlord sells their rental property, they have two choices when handling the tenant’s security deposit:

1. Transfer the security deposit to the new property owner and notify the tenant in writing.
2. Return the security deposit to the tenant, less any lawful deductions.

Deductions

When landlords cannot deduct: Texas landlords can’t deduct security deposit funds for normal wear and tear, which the law defines as “deterioration that results from ordinary use; normal depreciation.”

Common examples of normal wear and tear include:

• Faded paint
• Worn or frayed carpet
• Slight discoloration in grout between tiles
• Small nail holes from hanging pictures
• Dusty air vents

When landlords can deduct: Texas landlords can deduct security deposit funds for tenant-caused damage beyond normal wear and tear, unpaid rent, and other charges listed in the lease agreement.

Common examples of allowable deductions include:

• Inability to collect rent or fees
• Removal of trash or personal items left behind
• Patching drywall from damage caused by the tenant
• Replacing missing keys, remotes, or access cards
• Cleaning to restore the unit to its previous move-in condition

Return Timeline

Timeframe: Texas law requires landlords to return a tenant’s security deposit, minus any lawful deductions, within 30 calendar days after the tenant moves out (Texas Property Code § 92.103(a)).

Deduction tracking: If a landlord deducts any part of a tenant’s security deposit, they must provide an itemized list of deductions with descriptions of each charge within 30 calendar days after the tenant moves out (Texas Property Code § 92.104(a).

Itemized deduction notification: Landlords must mail or personally deliver the remaining security deposit and itemized deduction statement to the tenant, usually to the tenant-provided forwarding address. Texas law doesn’t specify how landlords must return the funds. Check, money order, electronic payment, or other methods are acceptable unless the lease agreement specifies otherwise (Texas Property Code § 92.103).

Penalties: If a landlord fails to return the security deposit or provide an itemized list of deductions within 30 calendar days, they lose the right to keep any portion of it and must return the full amount to the tenant immediately.

In addition, the landlord may be liable to pay:

• $100
• Three times the amount wrongfully withheld
• Reasonable tenant attorney fees (Texas Property Code § 92.109(a))

Handling Disputes

Move-in/move-out checklist: To avoid security deposit disputes, landlords should use a move-in and move-out checklist at the start and end of every tenancy. This documentation helps establish the property’s condition, supports any lawful deductions, and reduces the chances of disagreements over damage or cleaning charges.

Tenant challenge: If a tenant disputes the return of their security deposit, the landlord should respond with a copy of the itemized deductions, the move-in and move-out checklist, and any supporting photos, videos, or receipts. Clear documentation often resolves deposit disputes without legal action.

Legal action: If a tenant files a small claims court case to recover all or part of their security deposit, the landlord should gather relevant documentation, such as the lease agreement, communication records, condition reports, receipts, and itemized deductions. They must prove to a judge that each deduction they made was justifiable.