Overview
Texas security deposit laws are governed by Texas Property Code Chapter 92, Subchapter C (Sections 92.101-92.109). Texas is considered landlord-friendly compared to many states—there's no limit on deposit amounts, no interest requirement, and no mandate to hold deposits in separate accounts. However, landlords must still follow strict return timelines and itemization rules. Passive's deposit management platform ensures you meet these requirements on time.
Maximum Security Deposit
Texas has no statutory limit on security deposit amounts (Property Code § 92.102). Landlords may charge whatever amount they deem appropriate.
However, market conditions typically keep deposits reasonable—most landlords charge one to two months' rent. Some local city ordinances may impose specific restrictions, so check local regulations.
Return Timeline
Landlords must refund the security deposit within 30 days after the tenant surrenders the premises (Property Code § 92.103).
Forwarding Address Requirement
Important: Under Property Code § 92.107, the landlord is not obligated to return the deposit until the tenant provides a written forwarding address. However, even without a forwarding address, tenants don't forfeit their right to the refund—the 30-day clock simply doesn't start until the address is provided.
Interest Requirements
Texas does not require landlords to pay interest on security deposits. Landlords also are not required to:
- Hold deposits in a separate account
- Hold deposits in an interest-bearing account
- Disclose where the deposit is held
Allowable Deductions
Under Property Code § 92.104, landlords may deduct from security deposits for:
- Damages and charges for which the tenant is legally liable under the lease
- Damages resulting from breach of the lease agreement
- Unpaid rent
- Cleaning and repair costs beyond normal wear and tear
Important: The statute explicitly states that landlords may not retain any portion of the security deposit to cover normal wear and tear.
Required Itemization
If a landlord withholds any portion of the deposit, Property Code § 92.104 requires:
- A written description of damages
- Itemized charges for each deduction
- The statement must be specific enough for the tenant to understand each charge
Landlords must also maintain accurate records of all security deposits under Property Code § 92.108.
Penalties for Non-Compliance
Under Property Code § 92.109, courts may presume bad faith if a landlord fails to return the deposit or provide an itemized statement within 30 days. Penalties include:
- $100 statutory penalty
- Three times the amount wrongfully withheld
- Reasonable attorney's fees for the prevailing party
The bad faith presumption means the burden shifts to the landlord to prove they acted in good faith. (Oklahoma has comparable rules—see Oklahoma security deposit laws.)
Common Compliance Questions
What if the tenant doesn't provide a forwarding address?
You're not required to return the deposit until the tenant provides a written forwarding address. However, the tenant doesn't forfeit the deposit—they can request it later with a valid address. Best practice: include a forwarding address form in your move-out packet and send it via certified mail if they haven't provided one within a week of move-out.
How specific does my itemization need to be?
Texas requires a written description and itemized list of deductions. Be specific: instead of "repairs - $500," write "Repair 3 holes in living room drywall (2" diameter each), patch and paint to match - $150; Replace damaged blinds in bedroom 2 - $75" and so on. Vague descriptions invite disputes and can be seen as bad faith.
What's the "bad faith" presumption?
If you fail to return the deposit or provide itemization within 30 days, courts presume you acted in bad faith. This shifts the burden to you to prove otherwise. A bad faith finding means the tenant gets three times the wrongfully withheld amount plus $100 plus attorney's fees. Even a few days late can trigger this presumption.
Can I charge for carpet replacement?
Only for damage beyond normal wear and tear, and only a prorated amount based on carpet age. If carpet has a 7-year expected life and the tenant damaged 4-year-old carpet, you can only charge for the remaining useful life (about 43% of replacement cost). Keep records of when carpet was installed and its condition at move-in. Schedule a demo to see how Passive tracks asset depreciation and move-in conditions.