Unlike most states, Texas doesn’t have laws specifying the amount of deposit you can charge new tenants but we do have laws protecting this money for both the landlord and the tenant.
Limits on Security Deposits
Owning a rental home is no small feat and you should be proud. However, not everyone considers your rental home the precious asset that it is to you. The good news is that Texas is one of the most landlord-friendly states in the Union. Currently, there is no limit on what a landlord can charge for a security deposit. With that said, it’s popular to charge up to one or one and a half month’s rent. Going above this can hurt your property when trying to find excellent tenants. You may be the best landlord in the Austin metro area but if you charge too much for entry into your property then finding quality tenants on time will be harder. Keep in mind there is no shortage of rental options in a city like Austin.
Returning the Security Deposit
The deadline to return a security deposit to your tenant upon move-out is 30 days. There are a few stipulations that allow you to keep the security deposit regardless of this. They are as follows:
- If your lease requires a 30-day notice for move-out and the tenant doesn’t abide by this then you are eligible to keep this deposit in full.
- Damages to the property grant you the right to apply that deposit to repairs. It’s required for the landlord to have these charges on record and to itemize them for the tenant(s) so that they know exactly why they aren’t receiving their deposit back. If the tenant still owes rent at the end of their lease term it is not required to provide this list as long as there is no discrepancy regarding the amount of rent owed.
Wrongful Withholding of the Tenant’s Deposit
If you, as an Austin landlord, chose to wrongfully withhold your tenant’s security deposit from your tenant’s you can face some hefty fines. You can be found responsible to owe your previous tenant three times (3x) the amount of the deposit plus attorney’s fees racked up by the tenant in trying to pursue money that is rightfully theirs. We at Stone Oak Property Management advise against being a slumlord and playing with other’s money. Once you are on the receiving end of a non-paying tenant or something along those lines you’ll appreciate those who keep their end of the bargain and you’ll attract better tenants as a better landlord!
Security Deposits and the Sale of Your Property
If you own a rental that is occupied and you are in the process of selling the property you are required and responsible for transferring the deposit to the new owner. You are held liable for these deposits until the new owner has provided a written statement to the tenants stating they are now in possession of the deposit and funds. Once this notice is received you are no longer liable for these amounts!
Are you curious about the actual Texas property code and what it states regarding security deposits? You can read the Texas property code about security deposits here. If you have any questions about security deposits pertaining to your Austin rental home then don’t hesitate to contact our experienced Austin property management team!
