Texas security deposit law

Texas does not cap the amount of a security deposit. A security deposit is any advance of money meant mainly to secure the tenant's performance under the lease, other than a rental application deposit or rent paid in advance.

Tex. Prop. Code §§ 92.101 to 92.113

• A landlord who requires a deposit may offer a recurring fee in lieu of it, but must also offer the deposit, may not use the tenant's choice when deciding the application, and needs a written agreement signed by both sides. Tex. Prop. Code § 92.111
• A fee in lieu of a deposit counts as a security deposit unless the parties signed the written agreement and the fee buys insurance covering both damages and unpaid rent the tenant owes. Tex. Prop. Code § 92.111(g), (h)

Refund the deposit on or before the 30th day after the tenant surrenders the premises, with a written description and itemized list of any deductions. You may deduct damages and charges the tenant is legally liable for under the lease, but never normal wear and tear. You do not have to refund or itemize until the tenant gives a written forwarding address, and the tenant does not lose the refund by failing to give one.

Tex. Prop. Code § 92.103 Tex. Prop. Code § 92.104 Tex. Prop. Code § 92.1041 Tex. Prop. Code § 92.107 Tex. Prop. Code § 92.108 Tex. Prop. Code § 92.109 Tex. Prop. Code § 92.113 Tex. Prop. Code § 92.105

• A refund or accounting mailed with a postmark on or before the deadline is presumed on time. Tex. Prop. Code § 92.1041
• No itemized list is needed if the tenant owes rent at move-out and the amount is not disputed. Tex. Prop. Code § 92.104(c)
• Missing the 30 days creates a presumption of bad faith. Keeping a deposit in bad faith costs $100, three times the amount wrongfully withheld and the tenant's attorney's fees; failing in bad faith to send the itemized list also forfeits the right to keep any part of the deposit or to sue for damage to the home. The landlord must prove each deduction was reasonable. Tex. Prop. Code § 92.109
• A tenant may not withhold the last month's rent against the deposit; doing so is presumed bad faith and costs three times the rent withheld plus fees. Tex. Prop. Code § 92.108
• Requiring advance notice of move-out as a condition of the refund works only if the requirement is underlined or in conspicuous bold print in the lease. Tex. Prop. Code § 92.103(b)
• Deposit notices may go by e-mail if the landlord and tenant have e-mailed each other before. Tex. Prop. Code § 92.113
• A new owner, other than a mortgage lender that takes title by foreclosure, becomes liable for existing deposits and must give each tenant a signed statement of the exact amount; the seller stays liable for deposits it received until the buyer receives them or assumes the liability, unless a written contract says otherwise. Tex. Prop. Code § 92.105
• If the lease required no deposit, give the tenant written notice of your claim for damages and charges no later than the day you report it to a consumer reporting agency or debt collector, or you forfeit the right to collect them. The notice is not required if the tenant gave no forwarding address. Tex. Prop. Code § 92.110

A landlord must keep accurate records of all security deposits. Nothing in the deposit subchapter requires paying interest or holding an owner-landlord's deposits in a separate account. A real estate license holder (a broker or sales agent) is different: while engaged in real estate brokerage, commingling other people's money or failing to deposit trust funds within a reasonable time with a Texas-authorized title company or in a trust or escrow account at a Texas-authorized bank is grounds for license discipline.

Tex. Prop. Code § 92.106 Tex. Occ. Code § 1101.652

• The tenant's claim to the deposit ranks ahead of the landlord's creditors, including a bankruptcy trustee. Tex. Prop. Code § 92.103(c)

No section of Property Code chapter 92 requires a general move-in condition inspection, checklist or photo record. The only move-in checks it requires are testing each smoke alarm and, where the landlord installed a fire extinguisher under a local ordinance or other law, inspecting it. A dated record of the unit's condition at move-in is still useful evidence if a deposit deduction is disputed.

Tex. Prop. Code ch. 92 Tex. Prop. Code § 92.258 Tex. Prop. Code § 92.263

• In a tenant's suit over the deposit, the landlord must prove that keeping any part of it was reasonable. Tex. Prop. Code § 92.109(c)
• Normal wear and tear, which can never be deducted, means deterioration from intended use; it does not include damage from negligence, carelessness, accident or abuse by the tenant, household members or guests. Tex. Prop. Code § 92.001(4) Tex. Prop. Code § 92.104(b)