When leasing a residential home, it is always the best idea to require that a tenant put down a security deposit. However, laws surrounding these deposits are the most widely misunderstood by both tenants and owners. They are also the biggest cause of disagreement.
The process can be confusing, especially if you aren't familiar with the laws. To help, we've answered some of the top questions below that we hear most often.
What exactly is a security deposit?
A security deposit is any advance of money, other than a rental application deposit or advance 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 (TX 92.102).
What can be withheld from the security deposit?
Damages and charges which the tenant is legally liable under the lease or as a result of breaching the lease. This could include such things as damage to the property, unpaid rent, and fees to cover finding the cost of a replacement tenant should the tenant break the lease. What cannot be witheld are charges for normal wear and tear.
What is considered normal wear and tear?
There is no clear definition of what is considered normal wear and tear. Things such as light scuffing of the walls, worn carpet, and nail holes are examples of normal wear and tear. Damage that is outside the realm of what is expected is what we look for when the tenant turns over the property. Some examples would be drawing on the walls, carpet stains, broken windows, etc.
Is there a limit to the amount of a security deposit?
In the state of Texas, there is no limit to the amount of security deposit that can be collected. However, this is at the state level and there could be limits impose at local levels.
Can I use the tenant security deposit for other things while the tenant is leasing my property?
No, property management companies are required to keep tenant deposits in a separate trust account. These monies cannot be used for any purpose or co-mingled at all with the management companies operating funds.
Check back often as we will continue to add to these FAQs on tenant deposits.
Need help with leasing or property management? We would love to help!
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