Texas security deposit laws for landlords: the 30 day clock and the bad faith presumption
In Texas you must refund the security deposit, or send a written description and itemized list of deductions, on or before the 30th day after the tenant surrenders the premises. Miss that date and the law presumes you acted in bad faith, which can cost you $100, three times the amount you wrongly kept and the tenant's attorney fees. Texas sets no cap on the deposit amount. This guide covers each rule in Texas Property Code Chapter 92, Subchapter C.
How long do I have to return a Texas deposit?
Section 92.103 says a landlord must refund the deposit on or before the 30th day after the date the tenant surrenders the premises. Surrender is the day the tenant gives up possession, not the day the lease ends on paper. If you keep any of the deposit, section 92.104(c) requires the balance plus a written description and itemized list of all deductions in that same window.
Texas counts mailing as delivery. Under section 92.1041 you are presumed to have refunded the deposit or made your accounting if the refund or accounting is placed in the United States mail and postmarked on or before the required date. Keep the postmarked proof.
One condition matters a lot in practice. Section 92.107 says you are not obligated to return the deposit or send the list until the tenant gives you a written statement of a forwarding address for the refund. The tenant does not lose the right to the refund by failing to give one, so you cannot simply keep the money. If you have no address, write down every attempt you made to get one.
What does bad faith cost a landlord?
Section 92.109 is the part Texas landlords should know best. A landlord who in bad faith retains a deposit in violation of the subchapter is liable for $100, plus three times the portion of the deposit wrongfully withheld, plus the tenant's reasonable attorney fees in a suit to recover it. A landlord who in bad faith does not provide the written description and itemized list forfeits the right to withhold any part of the deposit and the right to sue the tenant for damage to the premises.
Two features make this risky. First, subsection (d): if you fail to either return the deposit or provide the itemization on or before the 30th day, you are presumed to have acted in bad faith. Second, subsection (c): in a tenant's suit, you carry the burden of proving that keeping any portion was reasonable.
Example a made-up tenant surrenders a duplex unit on June 1 with a $1,500 deposit. The landlord sends nothing by July 1 and later keeps $800 for damage. A court finds the $800 was not justified. With the bad faith presumption in play, the exposure is $100 plus $2,400 (three times the $800), plus the tenant's attorney fees, so at least $2,500 on an $800 mistake.
What can I deduct, and what is off limits?
Section 92.104(a) lets you deduct damages and charges for which the tenant is legally liable under the lease or as a result of breaching the lease. Section 92.104(b) bars keeping any portion of the deposit to cover normal wear and tear. The statute does not define wear and tear, so see normal wear and tear vs. damage for how to draw the line and document it.
There is one exception to the itemized list: you do not have to send a description and list if the tenant owes rent when surrendering possession and there is no controversy about the amount of rent owed. If there is any dispute, send the list.
If the lease asks the tenant for advance notice of surrender as a condition of the refund, that requirement works only if it is underlined or printed in conspicuous bold print in the lease (section 92.103(b)).
Does Texas cap the amount, require a separate account or require interest?
Subchapter C contains no limit on how much deposit you may collect, no requirement to keep it in a separate account and no requirement to pay interest. The sections cover the 30 day refund, the itemized list, the forwarding address, record keeping and penalties. Your lease sets the amount. A deposit is defined in section 92.102 as an advance of money, other than a rental application deposit or an advance payment of rent, that is primarily to secure performance under the lease.
You must keep accurate records of all security deposits (section 92.106). The tenant's claim to the deposit also takes priority over the claims of any creditor of the landlord, including a bankruptcy trustee (section 92.103(c)).
Texas allows a fee in lieu of a deposit under section 92.111, but only if you also offer a regular deposit, give written notice of both options and sign a written agreement. Unless the fee buys insurance under the section's conditions, it counts as a security deposit.
What if the tenant stops paying the last month and says use the deposit?
Section 92.108 says a tenant may not withhold the last month's rent on the ground that the deposit secures unpaid rent. A tenant who does is presumed to have acted in bad faith and is liable for three times the rent wrongfully withheld plus the landlord's reasonable attorney fees. The law runs both ways, which helps when a tenant tries this. Apply the deposit to the unpaid rent only after the tenant leaves, then account for it in your itemized list.
What happens to the deposit when the building is sold?
When ownership ends by sale or otherwise, the new owner is liable for deposits from the date title is acquired (section 92.105) and must give each tenant a signed statement that names the exact dollar amount of the deposit. The old owner stays liable until the new owner has received the deposit or assumed the liability. Hand over a clean per tenant deposit list at closing. More on this in security deposits when an apartment building is sold.
How DoorKeeping handles it
DoorKeeping carries each tenant's deposit as its own line in that property's books, so you can see what you hold for every unit and give a buyer or a tenant the exact figure. Leases are signed electronically and stored with the property's documents. DoorKeeping does not hold the deposit; it sits in your own account, and any step involving money waits for your one tap. DoorKeeping gives no legal advice, so check your lease wording with your own counsel.
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Questions
- How many days does a Texas landlord have to return a security deposit?
- Thirty days, counted to the 30th day after the tenant surrenders the premises (Tex. Prop. Code 92.103). A refund or itemized list postmarked by that date meets the deadline.
- Is there a maximum security deposit in Texas?
- Not in the security deposit subchapter. Texas Property Code Chapter 92, Subchapter C sets no cap, so the amount is whatever the lease says.
- Does a Texas landlord have to pay interest on the deposit?
- Subchapter C does not require interest or a separate account. It does require accurate records of every deposit.
- What if the tenant never gives a forwarding address?
- Section 92.107 says you are not obligated to return the deposit or send the list until you get a written forwarding address. The tenant still keeps the right to the refund, so keep the money available and record your attempts to reach them.