Jacob Wallace* Attorney, Law Office of Jacob Wallace
LANDLORD TENANT LAW
Landlords regularly require a security deposit to secure a lease. The article below, written by Jacob Wallace, Law Office of Jacob Wallace, provides basic information about security deposits to help tenants understand their rights regarding security deposits.
1. Introduction Two years ago, you moved into a new apartment. When you moved in, the landlord charged you hundreds or even thousands of dollars as a security deposit. Now you are moving out and asking what, if any, of that money can you get back.
2. What is a Security Deposit? Texas law defines a security deposit as “any advance of money, other than a rental application deposit or an advanced payment of rent, that is intended primarily to secure performance under a lease of a dwelling that has been entered into by a landlord and a tenant.”¹ In other words, if you paid the landlord money that was not a rental application deposit or rent, it may be a security deposit.
A rental application deposit is a non-refundable application fee to pay for the cost of screening potential tenants. If the landlord wishes to charge a non-refundable rental application fee, she must provide you with a printed notice for you to sign with the criteria and grounds by which the rental application may be denied.² If the landlord fails to give you this notice, she must refund the application fee. Otherwise, this is not a security deposit and is not refundable.
Many landlords require you to prepay more than one month’s rent before you move in. The pre-payment of rent, as agreed to in the lease, is not considered a security deposit. For example, if your landlord asked you to pay first and last month’s rent when you moved in, this payment is not a security deposit and is not refundable.
Other items may not be considered “amounts paid to secure performance under a lease.” For example, a fee paid for having a pet in your apartment is not paid to secure the apartment under the lease and is generally not refundable. However, a pet cleaning deposit may be an amount paid to ensure that you maintain a clean apartment, and thus may be recoverable. It is important to look at each charge and determine why the fee was charged. Then you can determine if it could be refunded.
3. Non-Refundable Deposits What if my lease says that my security deposit is non-refundable? In Texas, there is no such thing as a non-refundable security deposit, regardless of what is stipulated in your lease. Texas state law specifically states that a landlord shall refund a security deposit³ and that a landlord’s duty concerning security deposits may not be waived.⁴ Under Texas law, it does not matter what the landlord calls it or whether she claims it is non-refundable. If the payment meets the definition of a security deposit, it must be either accounted for or refunded.
4. Security Deposits are NOT Rent It is important to note that your security deposit should not be used to pay the last month’s rent on your lease. Many tenants move out, not paying the last month’s rent, assuming that the security deposit will cover it; it does not. In fact, Texas law states that if a tenant, acting in bad faith, withholds any portion of the last month’s rent on the ground that the security deposit should be used as outstanding rent payments, the tenant is liable to the landlord for three times the amount of rent wrongfully withheld as well as the landlord’s reasonable attorney’s fees in a suit to recover the rent.⁵ You are presumed to be acting in bad faith if you withhold payment of rent on the grounds that the security deposit should cover your rent.⁶
5. How Do I Get My Security Deposit Back? Your landlord has no obligation to refund your security deposit or give a written description of damages and charges until you, the tenant, give the landlord a written statement of your forwarding address for the purpose of refunding the security deposit.⁷ This means that if you do not give your landlord your forwarding address–in writing, they are never obligated to refund or account for your deposit.
What if you have already moved out and failed to give written notice of your forwarding address? Texas law states that you do not forfeit your right to a refund of your security deposit merely for failing to give a forwarding address to your landlord before moving out.⁸ You can still provide your address via certified mail with return receipt requested and your landlord is required to issue your refund or an accounting.
6. What Are My Landlord’s Obligations? Once you have provided your landlord with written notice of your forwarding address and you have moved out, the landlord has 30 days to refund your security deposit.⁹ However, the landlord may deduct from the security deposit amounts used to repair damages to the apartment, charges for which the tenant is legally liable under the lease, or for breaching the lease.¹⁰ For example, if you do not return the key, she may deduct the reasonable cost for re-keying the apartment. It is likely a list of charges were made part of your lease or are available in the rental office. Most commonly, if the apartment is damaged or needs to be cleaned, the landlord can deduct the cost of the repairs or cleaning from the security deposit.
One of the most common disputes between landlords and tenants is the question of what repairs the landlord can deduct from the security deposit. Texas law states that “the landlord may not retain any portion of a security deposit to cover normal wear and tear.”¹¹
What is “normal wear and tear?” Texas defines normal wear and tear as “deterioration that results from the intended use of a dwelling, including” … “breakage or malfunction due to age or deteriorated condition, but the term does not include deterioration that results from negligence, carelessness, accident, or abuse of the premises, equipment, or chattels by the tenant, by a member of the tenant’s household, or by a guest or invitee of the tenant.”¹²
What does that mean? Generally, if the damages were caused by using the property as intended, the landlord cannot deduct for those damages. For example, if the carpet is worn out, but the only damage to it was people walking on it for ten years, the landlord generally should not be able to deduct the cost of a new carpet from your security deposit. However, if the carpet was damaged because you spilled oil on the carpet, burned the carpet, or your pet ripped the carpet up, that is not considered normal wear and tear and the landlord can deduct for those repairs.
If the landlord retains all or any part of your security deposit, she must give you the left-over amounts from your security deposit, if any, and a written description and itemized list of all deductions.¹³ This means your landlord must tell you how much she kept and why.
The landlord is not required to give you this description and itemized list of deductions if you owe rent when you surrender the premises and there is no controversy concerning the amount of rent owed.¹⁴ Many landlords try to use this provision to excuse failing to provide the itemized list of deductions, but as a general rule, it does not work because all a tenant needs to do is dispute the amount of rent due. For this reason, responsible landlords will provide an accounting even if rent is due.
7. What If the Landlord Does Not Pay? If the landlord fails to account for or refund the security deposit, or if you disagree with the amounts being refunded, the first step is to reach out to the landlord and try to find out why funds were withheld. Most of the time, it is a simple oversight and she will work with you to get the correct amounts returned. If your landlord does not respond or fails to address your complaints, you may need to bring a lawsuit against her, generally in Justice Court (this court handles “small” or lower valued claims), to recover the amounts due. If the landlord is found to have acted in “bad faith,” she must pay $100, three times the portion of the deposit wrongfully withheld, and the tenant’s reasonable attorney fees in a suit to recover the deposit.¹⁵ The landlord is presumed to have acted in bad faith if she fails to return the security deposit or to provide the written description and itemization of deductions on or before 30 days after the tenant surrenders possession.¹⁶
If the landlord fails to provide the written description and itemized list of damages and charges, she forfeits the right to withhold any portion of the security deposit or to bring suit against the tenant for damages to the premises. In this situation, the landlord would also be liable for the tenant's reasonable attorney’s fees.¹⁷
These provisions work together to help a tenant. If the landlord does not refund your security deposit within 30 days, then you can demand the security deposit back. Many landlords will then generate an itemized list of charges showing that you in fact owe them money for damage to the apartment. The statutes state that, because the landlord did not send the notice within 30 days, she forfeited the right to withhold any deposits or sue you for any damages, so they must refund all of the deposit. Additionally, because the landlord did not make the refund within 30 days, she may owe you $100 plus three times the amount of the security deposit plus attorney fees.
It is also important to note that the landlord has the burden to prove that the retention of any portion of the security deposit is reasonable. It is not the tenant’s job to prove that the retention was unreasonable.¹⁸ This means that the court must start with the presumption that the landlord should have given you all of the deposit back, and the landlord must prove the reasonableness of every dollar retained.
8. Conclusion The security deposit provisions of the Texas Property Code can seem complicated, but the code provides a powerful tool to help tenants recover funds due to them. Like most consumer protection tools, the Texas Property Code provides additional damages to encourage landlords to comply without the threat of litigation. While tenants should be fully capable of asserting their rights under the Code on their own, fee shifting provisions can help low income tenants obtain access to an attorney if the landlord refuses to comply. Using these statutes, Texas tenants can ensure that landlords comply with the law and receive security deposit refunds to which they are entitled.
*Jacob Wallace is an attorney at The Law Offices of Jacob Wallace. He represents individuals and small businesses in consumer and commercial trials. He has also practiced for more than a decade and helped hundreds of clients resolve commercial disputes, including landlord/tenant matters.
Sources ¹ Tex. Prop. Code Ann. § 92.102. ² Tex. Prop. Code Ann. § 92.3515(a), (b). ³ Tex. Prop. Code Ann. § 92.103. ⁴ Tex. Prop. Code Ann. § 92.006(a). ⁵ Tex. Prop. Code Ann. § 92.108(a). ⁶ Tex. Prop. Code Ann. § 92.108(b). ⁷ Tex. Prop. Code Ann. § 92.107. ⁸ Tex. Prop. Code Ann. § 92.107(b). ⁹ Tex. Prop. Code Ann. § 92.103. ¹⁰ Tex. Prop. Code Ann. § 92.104. ¹¹ Tex. Prop. Code Ann. § 92.104(b). ¹² Tex. Prop. Code Ann. § 92.001(4). ¹³ Tex. Prop. Code Ann. § 92.104(c). ¹⁴ Tex. Prop. Code Ann. § 92.104. ¹⁵ Tex. Prop. Code Ann. § 92.109. ¹⁶ Tex. Prop. Code Ann. § 92.109(d). ¹⁷ Tex. Prop. Code Ann. § 92.109(b). ¹⁸ Tex. Prop. Code Ann. § 92.109(c).