Under the landlord-tenant law, as a landlord, you can collect security deposits from your tenant to act as a safety net.
A security deposit cushions you against negligent tenant actions in your rental property. For example, if a tenant decides to abandon the property, refuses to pay rent, or causes damage exceeding normal wear and tear, you'll have some cushion money.
All states have security deposit laws in place, and Texas isn't an exception. As a Texas landlord, you must follow these laws if you decide to collect a security deposit from a tenant. Breaking these laws can mean a landlord may risk facing several legal consequences.
In this article, you'll learn everything you need to know about collecting security deposit laws in Texas and the terms that dictate the refund process. The following are answers to commonly asked questions about Texas security deposits.
Do Texas landlords have a limit on how much security deposit they can ask from a tenant?
When it comes to the amount of a security deposit, it's legal for a landlord to charge their tenant whatever amount they deem fair to mitigate the risk of damages.
A reasonable amount for a Texas security deposit could be two times the amount of rent. So, if the monthly rent is $1,000, you could require your tenant pay $2,000 as security deposit.
That said, while no firm deposit amount is specificied in Texas law, be sure to check with your municipalities or counties, as they may have their own specific laws.
Where should landlords store a tenant's security deposit?
Texas law doesn't require landlords to store a security deposit in a particular way. But again, that's at the state level. It's entirely possible that some localities have various rules and regulations.
Do landlords have to provide their tenant with a written notice after receipt of their security deposit?
There is no requirement for landlords to provide their tenant with a written notice after they receive the security deposit. However, it never hurts to provide written notice, at a tenant's request.
What instances can make a landlord keep part or all of a tenant's security deposit in Texas?
As a landlord, you may keep all or part of a tenant's deposit in the event that they violate the lease.
Common violations that may warrant a landlord witholding security deposits include:
- Moving out without covering all unpaid utility bills. During a tenancy, renters are usually responsible for paying for a number of utilities such as gas, electricity, and water bills. If the tenant moves out without paying them, the landlord has a right to make appropriate deductions from their security deposit.
- Leaving the rented premises in an extreme case of uncleanliness. Most leases require tenants to leave the premises in the same exact condition they found it, beyond normal wear and tear. Unfortunately, not all tenants adhere to this rule. In such cases, you have a right to make the appropriate deductions from their security deposits.
- Breaking the lease. Breaking a lease is a serious violation of the lease agreement. A lease binds a tenant for a certain duration of time. So, if they move out before the lease expires, the landlord can mitigate their losses by deducting part or all of their security deposit. You can also sue the tenant should the security deposit fail to cover their losses.
- Failure to pay rent. If a tenant fails to pay the last month's rent, for example, you have every right to deduct part or all of the tenant's deposit to cushion yourself.
- Failure to give advance notice to the landlord when leaving. In Texas, a tenant must give you a 30-days' notice prior to moving out. If a tenant fails to do so, you can keep the entire deposit. However, for this to happen, it must be clearly spelled out in the lease or rental agreement.
- Extreme property damages. You can also make appropriate deductions from a tenant's deposit in case of excessive property damage. Excessive property damage is defined as any damage exceeding normal wear and tear.
The following are some examples of excessive property damage.
- Excessive dirt in the kitchen or bathroom
- A pest infestation
- Unapproved paint on the walls
- Sizable or numerous holes in the wall
- Carpet soaked with pet urine
- A broken toilet seat
- A smashed bathroom mirror
- Disabled locks or broken doors
Remember, though, you cannot penalize the tenant for damages resulting from normal wear and tear. Why? Because, these occur as a result of the normal use of a property.
Are Texas tenants allowed to "live out" their security deposit?
In Texas, tenants may not use their security deposit as last month's rent. If a tenant attempts to do so, they risk facing numerous penalties, such as paying the landlord up to 3X the amount, as well as paying the landlord's attorney fees.
When should a landlord return a security deposit?
As a landlord, you have 30 days from the date a tenant surrenders the property back to return their security deposit. The only exception to this rule is if you don't have the tenant's forwarding address; you have no obligation to return the security deposit until they give you their new forwarding address.
If you've made deductions to the deposit, then you must send an itemized list of the deductions alongside the remaining deposit amount. The only exception to this is if the tenant owes rent to the landlord, and there's no contention over the amount of rent owed.
What happens if a landlord wrongfully withholds a tenant's deposit?
In that case, Texas law dictates that a landlord may be liable for refunding tenants up to three times the withheld amount, plus attorney fees.
What happens in case the property changes hands during an active tenancy?
If the property changes hands, you must transfer all security deposits to the new landlord. The new landlord is then liable for safekeeping security deposits.
If you have more questions, kindly consider hiring an expert in Texas' rental laws. Alternatively, seek help from Limestone Country Properties, a reputable property management company.