qira-insights-header-2

Texas Security Deposit Laws

Author: Kasee Godwin
Date: 01.10.2023

The state of Texas recently implemented a new regulation that enables property owners to offer an alternative to traditional security deposits. Instead of a security deposit that the property owner holds, property owners may offer residents to pay a monthly fee instead. To learn more about the security deposit regulations in the state of Texas, continue reading below.

Is there a limit on how much the property manager/owner can charge for an application fee? If so, what is that amount?

There is no limit on the application fee amount in the state of Texas. Application fees are non-refundable.

What is the security deposit amount the landlord can collect?

According to legislation in the state of Texas, property owners can request a security deposit of any amount to protect their property in the event of damages or unpaid rent. In 2021 a new law was implemented that enables property owners to let their residents pay a monthly fee instead of a security deposit. In the event that a property owner would like to offer this to a resident, they must give the resident written notice of the fact that they have a right to pay a security deposit instead of a monthly fee, and they can stop paying the monthly fee and provide a security deposit at any given point. The amount of the security deposit or the monthly fee must be stated clearly.

Can the property manager/owner collect a fee for pets?

Yes. Property owners in Texas can collect a pet deposit separate from the apartment security deposit. Service pets are an exemption, and disabled persons with service pets do not have to pay an additional security deposit. However, if a service dog causes damages, the resident is still liable for expenses incurred.

How does the security deposit need to be held?

There is no regulation in the state of Texas regarding how the security deposit must be held, however property owner must keep accurate records of the security deposit they received.

Is the property manager/owner required to tell the resident where the deposit is held?

No. Property owners in the state of Texas are not required to tell residents where their deposit is held.

Is the property manager/owner required to tell the resident what the interest rate on the account is (if applicable)?

No. Property owners in the state of Texas are not required to tell residents what the interest rate on their account is.

What can the property manager/owner deduct from the security deposit?

Property owners operating in the state of Texas can use the security deposit, or a portion of it, to cover unpaid rent, utility charges, cleaning fees, damages that exceed normal wear and tear, damages the property owner had due to the resident breaking the lease agreement, or the cost of a monthly security deposit instead of a security deposit fee.

How long does the property manager/owner have to return the security deposit after the lease has ended?

Property owners in the state of Texas must only return the security deposit, or its remainder, if applicable, if the resident provided them with a forwarding address. Once a resident provides the property owner with their forwarding address, the property owner has 30 days to return the security deposit, or its remainder after deductions have been made. The property owner must send the remainder alongside an itemized list of the damages and deductions made.

What penalties does the property manager/owner face if they do not return the security deposit on time?

If a property owner in Texas does not return the security deposit within the 30 days of receiving the forwarding address of the vacating resident, and provide an itemized list of the damages and repair costs, if applicable, the landlord may be liable to pay up to triple the security deposit amount, a $100 fixed amount, and reasonable attorneys fees Property owners that do not return the security deposit may also be subject to legal action from the renters who may file a case in Small Claims Court for up to $20,000.

What is the process for the property manager/owner to claim the security deposit funds?

40 owners in the state of Texas that want to claim security deposit funds in order to cover damages, or unpaid rent, must provide an itemized list of deductions to the vacating renter. The itemize listed deductions must be sent within 30 days of receiving the vacating residents forwarding address. Failure to provide an itemized list of deductions to the vacating rancor may caused a property owner to forfeit the right to claim any portion of the security deposits fund.

Is the resident allowed to apply their security deposit towards the last month’s rent?

No. The state of Texas strictly prohibits the use of the security deposits towards the last months rent.
To summarize, property owners in the state of Texas have straightforward regulations regarding the time they have to return the security deposit to their vacating renters, and what they must include. It is crucial for property owners in the state of Texas to provide an itemized list of deductions and damages to vacating residents to avoid legal action and loss of the security deposit rights.

Disclaimer & Sources:

Qira aims to keep this information as up-to-date as possible. The content provided here is for informational purposes and should not replace legal counsel. Please refer to the relevant government sources to check for any changes or updates to the law.

kasee-godwin-80x80

Kasee Godwin

Position: Director of Marketing
Social Networks

Kasee is the Director of Marketing for Qira. She has nearly 15 years of experience in the real estate marketing industry, including 10 years on the client side. In her spare time, she enjoys reading science fiction, exploring new wineries, and fostering Golden Retrievers.

Other news

decorative image of Qira's logo

Mitigating Rental Risks with Tenant Screening Reports

Tenant screening reports are an essential tool in evaluating whether or not a rental applicant is a good candidate, learn more about how to conduct these reports in the most effective and cost-saving way possible.

Author: Kasee Godwin
Date: 06.01.2023
decorative image of Qira's logo

5 Tips for Growth at a Property Management Conference

Learn 5 tips to maximize your professional growth at a property management conference this season!

Author: Kasee Godwin
Date: 05.30.2023
decorative image of Qira's logo

The Role of Artificial Intelligence in the Multifamily Housing Industry

Artificial Intelligence (AI) is becoming increasingly popular in the real estate industry, transforming how property managers and owners operate their properties.

Author: Kasee Godwin
Date: 05.25.2023
decorative image of Qira's logo

How to Write a Security Deposit Return Letter

Property managers who collect security deposits are always expected to send a security deposit return letter. This article outlines best practices when writing security deposit return letters.

Author: Kasee Godwin
Date: 05.22.2023
decorative image of Qira's logo

8 Tips for First-Time Renters: From Budgeting to Finding the Perfect Apartment

Renting an apartment for the first time can be daunting, but you can make the process smoother with the right tips. Here are 8 tips for first-time renters to help you navigate the process.

Author: Kasee Godwin
Date: 05.18.2023
decorative image of Qira's logo

How to Navigate Evolving Security Deposit Laws by State

Learn how can your property management company can thrive while state security deposit laws are evolving to create more rental affordability.

Author: Kasee Godwin
Date: 05.15.2023
decorative image of Qira's logo

Rent Reporting: a Game-Changer for Property Managers & Renters

Reporting rent to the major credit bureaus is not only great for renters--but can help property management as well by bringing in reliable renters.

Author: Kasee Godwin
Date: 05.08.2023

We are a financial services platform for property management

We are a financial services platform for property managers and residents. We help property managers and owners improve cash flow, reduce vacancies and avoid bad debt.

1-3