Many residential leases and rental agreements require a security deposit in Dallas, Texas. This deposit should cover damage beyond normal wear and tear. In most cases, the deposit amount to a month’s rent.
The Texas landlord-tenant laws ascertain security deposit rights for both sides. Whenever you handle a tenant’s security deposit, you need to comply with these regulations.
In this blog, we’ll cover these regulations and discuss the importance of knowing about the security deposit laws in Texas.
What are the rules for returning deposits in Texas?
The deadline for itemizing and returning your tenant’s deposit is 30 days. The itemization has to be in a written form. You have to state how much is left from the original sum after cleaning, repair, and back rent.
The only exception to the 30-day rule is when you don’t have your tenant’s forwarding address. In this case, you have to wait until your tenant provides you with the address.
What can you legally deduct from the security deposit?
You can only deduct the damage caused by negligence, accidents, or malicious acts. Both tenants and their guests may have caused this damage that you are able to deduct from the deposit.
However, there’s no possibility to deduct for normal wear and tear. The term covers minor damage resulting from the regular and intended use of the rental unit. For example, normal wear and tear covers faded paint, loose grouting, and worn gaskets. We’ll explain these differences with more practical examples below.
Examples of property damage vs normal wear and tear
Here are some examples of wear and tear occurring under normal conditions and use:
- Wallpaper that has come loose
- Faded paint
- Dirt building up on carpets, ceilings, and windows
- Scuffed wood floors
But the following examples are not normal wear and tear:
- Missing blinds
- Walls completely painted over with a new color
- Deep pet scratches throughout the unit
- Burns on the floor and kitchen counters
You might be able to keep the entire security deposit if your tenant vacates the unit without any advance notice. This clause needs to be spelled out and highlighted in the lease agreement.
Your tenant is still entitled to the security deposit in one scenario. That’s if he or she breaches the lease yet finds a replacement tenant who takes his place on or before the lease ends. Additionally, the law states that the replacement tenant needs to be “satisfactory.”
Are there any limits for a security deposit?
No, there isn’t any statutory limit on security deposits in Texas.
The security deposit may never vary based on a tenant’s race, religion, gender, marital status, national origin, disability, and whether they have children or not. This is founded on a federal Act against discrimination in the housing market.
Where do you have to hold the deposit?
Texas has no requirements for the storage of a tenant’s security deposit.
What is the importance of a move-out letter?
Do you want to reduce the risk of security deposit disputes?
One of the approaches is to write a move-out letter.
This letter should include the following:
- Write a reminder to return the keys
- Explain how you want the property to be left, touching on subjects like appliances and windows
- List all the possible deductions you are allowed to make on the security deposit
- Go over the move-out inspection activities
- Explain the details of sending any refund that is due
What happens when a tenant owes rent?
Landlords don’t have to give their tenants a description and itemized list of deductions if the tenant owes rent. Although, this doesn’t apply if there’s any disagreement surrounding the amount of owed rent.
Does the tenant dispute the claim of owed rent?
In this case, the tenant has to write a request for the deposit that states the position concerning the rent. Unresolvable disputes need to be settled in court.
Does Texas recognize non-refundable deposits?
No, security deposits are always refundable, less any deductions made for repairing damages. Still, you are able to add non-refundable fees. These have to come with a different name, such as “make-ready fee” or “redecorating fee”.
Are move-out inspections a requirement?
You don’t have to do an end-of-lease inspection. Nevertheless, you need to send an itemized list of damages and estimated repair costs after retaining a part of the deposit. Without an itemized list, your tenant has the right to reclaim the deposit. Hence, you could be held liable for associated legal costs.
What happens when a landlord sells a rental property?
In Texas, the previous landlord has to send all security deposits to the new owner. The former landlord is responsible for the security deposit as long as the tenant receives no Change of Ownership or Management notice from the new landlord.
The notice states that the new owner possesses the security deposits. Moreover, the amount of deposit received is clarified in the document. After giving out this notice, only the new owner is responsible for the security deposits during the lease period.
The bottom line: security deposit laws in Texas
Security deposits frequently cause disputes. The Texas landlord-tenant laws focusing on security deposits protect both sides of the lease agreement. Complying with the regulations connected to security deposits is crucial. Otherwise, you could face costly legal consequences.
As a landlord, you need to return the security deposit in 30 days starting from the move-out, less any damage or loss coverage. The only exception is not having your renter’s forwarding address. In this case, you need to wait until your tenant provides the address.
If you need a professional property management company to take care of the security deposit process for you, contact us at Uptown Dallas Properties today!