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Security Deposit Laws in Texas

Under Texas law, landlords can charge any amount for a security deposit and store the money any way they want.

It’s truly the wild West in Texas when it comes to security deposits. There's no limit on how high a deposit can be, deposits can be stored by the landlord wherever they wish, and a tenant is not entitled to any interest earned on their deposit. Landlords can even require, in a lease, that tenants must follow a specific procedure in order to have their deposit returned—or they forfeit the money.

Security deposits are not capped in Texas

Unlike many other states, Texas places no restrictions on how much a landlord can demand for a security deposit. While security deposits are always refundable (more on that below), they can theoretically be as high as the landlord wants to go.

Landlords can store security deposits however they want

There are no legal requirements as to how a landlord must store a security deposit. The deposit doesn't have to generate interest—and even if it does, there is no requirement that they money be given to the tenant. The landlord doesn't have to notify the tenant when they've received their deposit, either.

Tenants must follow a specific set of rules to get their deposit back

When the lease ends, a landlord has 30 days to return the unused portion of a security deposit to the tenant. However, Texas law specifically allows landlords to include a clause in the lease requiring tenants to give them advance notice that they are vacating the apartment. If the tenant fails to do so, the landlord gets to keep the deposit.1 While the law says a clause like this must be in bold print or underlined in the lease, it is still fairly onerous—even if the tenant’s lease is up, they must inform the landlord that they are moving out.

Additionally, a tenant must provide the landlord with a written statement containing a forwarding address. If they don’t do so, the landlord isn't required to return the deposit.2 This is the case regardless of what the lease says—tenants always need to provide their forwarding address.

Landlords cannot deduct for “wear and tear”

Along with the unused portion of a security deposit, a landlord must also provide the tenant with an itemized list showing why deductions were made, and a written statement describing the damages.4 Texas landlords can deduct money from security deposits for general “damages,” but the law specifically says this does not include “normal wear and tear.” Texas courts have helpfully narrowed down what’s considered wear and tear. It includes damage that results from age, or from the normal and intended use of a residence—but not from negligence, accidents, or misuse.5 Stains, scratches, and even smells can be sufficient cause for a Texas landlord to retain a portion of a security deposit.6

If the tenant owes any rent (and the rent owed isn't disputed), the landlord does not need to provide a tenant with any itemized list or written accounting.4 They can simply deduct the money owed from the security deposit.

If the landlord fails to provide an accounting or fails to return the deposit within 30 days, they are liable to the tenant for three times the amount of the deposit. They also forfeit any right to keep the deposit and must pay the tenant’s attorney fees spent trying to get the deposit back.3

Tenants cannot withhold last month’s rent

Occasionally, renters decide to skip out on the last month’s rent and assume the security deposit will cover it. Although it’s always against the law, that practice could have major consequences in Texas. If a tenant does so, the law says they have acted in “bad faith,” and they are liable to the landlord for three times the amount of rent withheld, plus the landlord’s attorney fees.7

[1] Texas Property Code § 92-103

[2] Texas Property Code § 92-107

[3] Texas Property Code § 92-109

[4] Texas Property Code § 92-104

[5] Schneider v. Watley, Court of Appeals of Texas, El Paso. Nov 29, 2017

[6] Pulley v. Milberger, Court of Appeals of Texas, Fifth District, Dallas Jul 24, 2006

[7] Texas Property Code § 92-108

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