Texas Security Deposit Law: Limits, Deadlines & Deductions

No cap, but a strict refund process

Texas doesn’t limit how much you can collect or require you to pay interest on it. The law focuses almost entirely on the back end: how and when you return the deposit, and what you can keep. The rules sit in Tex. Prop. Code §§ 92.101-92.109.

Because there’s no cap, nothing stops you from also taking a pet deposit or charging a nonrefundable pet fee, as long as the lease spells out which is which. Refundable money is part of the deposit and gets accounted for at move-out. A nonrefundable fee should be labeled that way in writing. You can’t charge a pet deposit for an assistance animal under fair housing rules.

When the 30 days actually starts

You have 30 days after the tenant surrenders the unit to refund the deposit or mail a written, itemized list of deductions. But you aren’t obligated to do either until the tenant gives you a written forwarding address. A tenant who never sends one doesn’t forfeit the money; you hold it until they do.

That makes the move-out walk-through the best moment to ask for the address on paper. Write the date on it and keep a copy.

If your lease requires the tenant to give advance notice of moving out as a condition of getting the deposit back, that clause only holds up if it’s underlined or printed in conspicuous bold. Check your lease template.

The last-month’s-rent rule

Tenants sometimes stop paying in the final month and tell you to “keep the deposit.” Texas law doesn’t allow it. A tenant who withholds the last month’s rent on the theory that the deposit covers it can owe three times the rent withheld plus your attorney fees, if they did it in bad faith.

In practice, most landlords send a short written reminder of the rule in the final month. If the tenant still doesn’t pay, the unpaid rent becomes a deduction on the itemized list, and the 3x claim is there if you need it.

What you can deduct

You can deduct unpaid rent and charges owed under the lease, and the cost of repairing damage beyond normal wear and tear. The statute specifically bars deductions for normal wear and tear.

• Wear and tear: carpet matted in walkways, small nail holes from pictures, sun-faded curtains, minor scuffs on baseboards.
• Damage: a hole kicked in a door, a broken window, deep pet scratches in hardwood, a burned countertop, missing fixtures.

Rekeying between tenants is a separate obligation. Texas requires you to rekey within 7 days of each tenant turnover, and it’s generally treated as your cost, not a deposit deduction.

A worked example at $1,600 a month

You rent a three-bedroom house in Lubbock for $1,600 and collected a $1,600 deposit plus a $300 refundable pet deposit, for $1,900 total held.

The tenant moves out on May 31 but doesn’t leave a forwarding address. On June 12 they text you one. A text is thin proof, so you ask them to email it, and the email arrives the same day. Thirty days after surrender is June 30, and you now have a written address well before then, so June 30 is the date to beat.

At the walk-through you found:

• Dog scratches through the finish on the hallway hardwood: $450 to sand and refinish that section (invoice)
• A broken blind in the main bedroom: $45
• Worn carpet in the bedrooms after four years: $0, wear and tear
• Rent: paid in full

Total deductions: $495. You mail an itemized list and a check for $1,405 to the forwarding address well before June 30.

The bad-faith penalty

Texas has one of the harsher deposit penalties. If you keep any part of a deposit in bad faith, you can owe $100, plus three times the amount wrongfully withheld, plus the tenant’s attorney fees. Missing the 30-day deadline creates a presumption of bad faith, which means you’d have to prove you acted honestly.

On the Lubbock example, an unsupported $495 deduction could cost $100 + $1,485, plus fees. And if you fail to send the itemized list in bad faith, you can lose the right to keep any of the deposit at all.

This page is general information, not legal advice. If a tenant disputes a deduction, a local attorney or the justice court’s self-help resources are the right next step.