When a tenant moves into your rental property, they normally will pay you or the property manager a security deposit. This amount is normally equal to one month’s rent and is held by the landlord/manager until the end of the duration of the lease. In Texas, landlords or managers are required to return the deposit within 30 days of the tenants move out. However, there are a few scenarios where the landlord is given the right to retain this deposit.
Nonpayment of Rent
Most states, including Texas, allow the landlord to retain the security deposit in the event your tenant begins to forego paying their rent. Your tenant, by definition, is contractually obligated to pay their monthly rent and failure to do so entitles you, the landlord, to keep the amount equal to past due rent.
The Lease is Terminated Early
If your tenant decides to terminate their lease before it expires you have the right to retain all or part of the security deposit to cover any costs associated with the lease. The specific wording may vary across lease agreements so double check yours to make sure you are entitled to this. A typical Texas Association of Realtors lease will have a clause written in it protecting the landlord in the event of a lease termination.
Damage to the Property
Damages to your rental property entitle you to retain your tenant’s deposit. However, normal ‘wear and tear’ cannot be held against the tenant nor any amount deducted from the deposit. Any damages that are caused by the tenant are covered by your security deposit you have on file. Damages usually consist of the following:
- Holes in the walls
- Stains or rips in the carpeting
- Water damage to hardwood floors
- Cracked or missing countertops
- Broken windows or doors
These are some of the usual damages landlords might experience with their property, but is definitely not a complete list. If a tenant damages your property and you intend on using the deposit to cover the damages be sure to keep an itemized list of the work that is done so that you can prove where the funds went.
Cleaning for things considered normal ‘wear and tear’ isn’t allowed to be deducted from your tenant’s security deposit. However, if the cleaning goes beyond this normal wear and tear you are entitled to utilize the security deposit to cover these costs. If a tenant leaves their trash bagged up in your house this would not be covered under this. Let’s say the tenant instead threw a large party and there is trash all over the floors, your carpets are a completely different color and the place is a wreck. A situation like this would entitle you to deduct these cleaning costs from the security deposit. It’s good practice to photograph this in the event the tenant tries to dispute the charges.
These are just a few examples of situations in which your tenant’s security deposit can be used and deducted from. Have a situation that you’re unsure of and want to speak with a professional? Our property management team would be happy to assist! Give us a call at 512.617.6766 to speak with a property manager today.