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When can you keep a tenant's security deposit in Texas?

Rental relationships are often fraught with potential pitfalls, leading many landlords to protect themselves with extensive lease contracts. The terms of these leases typically restrict how tenants can utilize the property and also mandate the payment of a security deposit for the premises.

If your tenant is about to move out, it is common to wonder when you have the right to keep the security deposit that they paid on the property. Making a mistake could leave you vulnerable to legal action by former tenants that could hurt your reputation and cost more money than the security deposit. So, under what circumstances do you have the right to retain a security deposit?

If your lease requires notice and your tenant didn't provide it

It is common for most leases to require at least 30 days of notice from a tenant before they evacuate the premises. However, not every tenant follows through with providing notice to their landlord.

If you did not receive written notification as required in the lease, you can likely retain most or all of the security deposit to offset your potential losses and the breach of contract.

If your tenant damaged the property

Someone living in a home will undoubtedly result in wear and tear. Discoloration of paint in the kitchen due to the use of cooking appliances, signs of wear and minor discoloration of the entryway carpet and other standard forms of wear that don't indicate misuse or neglect typically become the responsibility of the landlord.

It is your obligation to maintain the property, and that includes replacing and upgrading systems like flooring as they weather and age. However, if your tenant has damaged the walls by knocking holes in them, broken windows, smoked inside without permission or had animals that damaged the property, those are all situations in which you can retain a portion of or all of the security deposit to offset the financial impact of your tenant's behaviors.

If you have it included as a cleaning fee in the lease paperwork

Security deposits often have multiple components. They're may be the actual deposit, which is commonly one month's rental payment. This amount can only go toward damage to the unit and breach of contract.

However, you may also have pet deposits and cleaning fees. These may or may not be refunded, depending on circumstances. Some landlords will waive cleaning fees if the tenant provides evidence that they have had the carpets cleaned in the days immediately prior to their move out. Other landlords simply retain the cleaning fee to offset the expenses when they get the property ready for a new tenant.

How you label those fees in the lease will directly impact your right to retain them. If you worry about your ability to recoup the costs of getting your property ready for a new tenant, you may need to look into revising your lease contract.

Working with a real estate attorney who understands security deposit and lease contract law in Texas can help you minimize the unnecessary expenses and maximize your protections if you lease residential properties in Texas.

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