Texas Security Deposit Laws for Landlords

Texas sets no limit on how much you can charge as a security deposit for a residential lease. You must refund it, along with a written description and itemized list of any deductions, on or before the 30th day after the tenant surrenders the unit, but that duty starts only once the tenant gives you a written forwarding address. If you miss day 30, the law presumes bad faith, and a landlord who keeps a deposit in bad faith owes $100 plus three times the amount wrongfully withheld, plus the tenant's attorney's fees.

How much can you charge, and what counts as a deposit?

No Texas statute caps residential deposits, so the amount is whatever the lease sets. Texas defines a security deposit as money paid in advance to secure the tenant's performance under the lease, other than a rental application deposit or advance payment of rent. Prepaid rent is therefore not part of the deposit, but it can be refundable under the "Tenant never moves in" rule below.

A few rules apply whatever the amount:

• No waiver. A lease clause that waives the tenant's deposit rights, such as the 30-day refund or the itemized list, is unenforceable.
• Records. You must keep accurate records of every deposit you hold. The deposit statute does not require a separate bank account or interest.
• Sale of the property. A buyer becomes liable for the tenants' deposits from the date it takes title and must give each tenant a signed statement acknowledging the exact dollar amount. The seller stays liable for deposits it received until the buyer receives them or assumes the liability, unless a written contract says otherwise.
• Fee in lieu of a deposit. You may offer a recurring monthly fee instead, but you must also offer a regular deposit and cannot use the tenant's choice to decide the application. When you make the offer, tell the tenant in writing the charges for each option and that the tenant can stop the fee at any time and pay a deposit instead. Unless you and the tenant sign a written fee agreement and the fee buys insurance covering the tenant's unpaid rent and damage, the fee counts as a security deposit and the refund rules below apply to it. The fee cannot exceed the reasonable cost of obtaining and administering that insurance, and the agreement must state that the fee only secures occupancy, is not refundable, does not insure the tenant, and does not reduce the tenant's duty to pay rent and damage, unless it says otherwise. To file an insurance claim, send the tenant an itemized notice of damages and unpaid rent, with the dates rent was due, within 30 days after move-out. Once the insurer pays, you cannot collect those amounts from the tenant.

When does the 30-day deadline start?

Texas Property Code section 92.103 sets the refund deadline at the 30th day after the tenant surrenders the premises. Section 92.107 adds that you do not have to refund the deposit or send a description of damages and charges until the tenant gives you a written statement of a forwarding address. A tenant who leaves without one keeps the right to the refund; your duty to act is what waits. If the address arrives after move-out, the statute does not set a separate deadline, so send the refund or list within 30 days of receiving it.

You are presumed to have met the deadline if you mail the refund or itemized list with a postmark on or before the required date, even if it arrives later.

For leases entered into or renewed on or after September 1, 2025, H.B. 2037 changed how deposit notices can travel:

• Email. Notices under the deposit law, including the tenant's forwarding address and your itemized list, can go by email if you or your agent and the tenant have emailed each other before. You may designate one email address for the tenant to use.
• Agents. Your managing agent, leasing agent, or resident manager is your agent for these notices, so a forwarding address handed to any of them counts as given to you.

Older leases that have not been renewed since September 1, 2025, stay under the prior law. Ask for the forwarding address in writing at move-out, and log the date you receive it.

Can you require advance notice of move-out?

Yes, but only if the clause is formatted correctly. A lease term that makes the refund conditional on advance notice of surrender is effective only if it is underlined or printed in conspicuous bold print. A clause in regular type is unenforceable against the deposit even if the tenant gave no notice. Check this when you update your lease form; our guide to Texas lease agreement essentials covers the other terms to review.

What can you deduct, and when can you skip the itemized list?

You may deduct damages and charges the tenant is legally liable for under the lease or as a result of breaking it, such as unpaid rent, unpaid utilities the lease assigns to the tenant, or repair of damage the tenant caused. You may not keep any part of the deposit for normal wear and tear, which Texas defines as deterioration from the intended use of the dwelling. Deterioration from negligence, carelessness, accident, or abuse by the tenant, a household member, or a guest is not normal wear and tear. For typical deduction categories, see what security deposits are usually used for.

Whenever you keep any part of the deposit, send the balance with a written description and itemized list of all deductions. You can skip the list only when both of these are true:

1. The tenant owed rent when they surrendered the unit.
2. There is no dispute about the amount of rent owed.

If you are also deducting for cleaning or repairs, itemize those. In a tenant's suit over the deposit, you carry the burden of proving that what you kept was reasonable, so keep photos, invoices, and the move-in condition record. Texas's deposit law does not require a move-in checklist, but one gives you the starting point that proof needs; see whether a move-in inspection is required.

Two situations have their own rules:

• Tenant breaks the lease early. Rent and charges the lease makes the tenant liable for after a breach can come out of the deposit and must be itemized. If the tenant abandons the unit, Texas Property Code section 91.006 requires you to try to reduce your losses, such as by re-renting, and a lease clause waiving that duty is void, so rent you could have recovered by re-renting may not be chargeable. See what to do when a tenant breaks the lease early.
• Tenant never moves in. If a replacement tenant you accept moves in on or before the lease start date, you cannot keep the deposit or prepaid rent. When you found the replacement, you may keep either the lease cancellation fee the lease sets or your actual costs of finding the new tenant, including a reasonable amount for your time.

Can a tenant use the deposit as last month's rent?

No. Under section 92.108, a tenant may not withhold any part of the last month's rent on the grounds that the deposit covers it. A tenant who does is presumed to have acted in bad faith, and a tenant found in bad faith owes you three times the rent withheld plus your reasonable attorney's fees in a suit to recover it. On $1,600 of withheld rent, that is $4,800 plus fees.

Remind tenants of this rule in the move-out letter, and treat skipped rent as unpaid rent. If the tenant is still in the unit, the Texas eviction process covers the notice to vacate and filing steps.

What happens if you act in bad faith?

Section 92.109 sets the penalties:

The presumption of bad faith arises if you fail to return the refundable deposit balance or fail to send the required written description and itemized list of deductions on or before the 30th day after the tenant surrenders possession. You can try to rebut it in court, but the safer course is to calendar day 30 the day the tenant moves out and has given the forwarding address.

Example: the deposit is $2,000. On day 25 you refund $1,250 with an itemized list that keeps $750 to repaint walls that show only ordinary fading. If a court finds you kept the $750 in bad faith, you owe $100 + (3 x $750) = $2,350, plus the tenant's attorney's fees.

A tenant can bring a deposit claim of up to $20,000 in justice court, where parties often appear without an attorney. If you face a claim there, see whether to represent yourself in small claims court.