In Texas, a landlord generally must refund a tenant's security deposit, or send an itemized list of deductions, within 30 days after the tenant surrenders the property. Late fees follow their own rules: rent generally has to remain unpaid for two full days after the due date, and the fee must be reasonable and stated in the lease.
These are two of the most common places Austin landlords run into avoidable disputes. This overview covers the basics so owners know what to expect. It is general information, not legal advice, so have a Texas attorney review your lease forms.
Key Takeaways
- The standard deadline to return a deposit or send an itemized deduction list is 30 days after move-out.
- Normal wear and tear cannot be deducted from a deposit.
- A late fee must be written in the lease and cannot be charged until rent is two full days late.
- Dated photos and a written condition checklist are the best protection in a dispute.
How Long Do You Have to Return a Security Deposit in Texas?
The standard timeline is 30 days after the tenant moves out and surrenders the property. The tenant generally needs to provide a forwarding address. A lease cannot make advance notice of move-out a condition for getting the deposit back unless that requirement is written in underlined or conspicuous bold print.
What Can You Deduct From a Deposit?
Deductions are for damage beyond normal wear and tear, unpaid rent, and other charges the lease allows. Minor scuffs or faded paint from ordinary living are normal wear and tear and are not deductible. Walls with large holes, broken fixtures, or heavy stains are the kind of damage that usually is.
What Belongs in an Itemized Deduction List?
A clear list keeps the conversation simple and protects the owner.
- Each charge listed separately with a short description.
- The amount of each charge.
- Any remaining refund, sent along with the list.
- Supporting invoices or receipts where possible.
When Can You Charge a Late Fee?
A late fee can be charged only if the lease provides for it, the amount is reasonable, and the rent remains unpaid two full days after it was due. Texas law describes safe-harbor limits for what counts as reasonable, generally tied to a percentage of monthly rent and to the size of the property. Check the current statute language or ask your attorney before setting your fee.
What Happens If a Deadline Is Missed?
A landlord who wrongfully keeps a deposit or misses the itemization deadline can face additional damages and liability for the tenant's attorney's fees. It is one of the most common and most avoidable mistakes, and good documentation at move-in and move-out is what prevents it. Setting clear expectations at the start of a lease also helps, which is the same idea behind why landlords see fewer disputes when expectations are set early.
How a Property Manager Helps
A professional manager uses lease forms built for Texas, documents the condition of the home at move-in and move-out, tracks every deadline, and prepares the itemized statements. Our owner resources page explains how this works day to day.
FAQs about Texas Security Deposits and Late Fees
Is there a limit on how much security deposit a landlord can collect in Texas?
Texas does not set a statutory cap on residential security deposits. The amount should still be reasonable and stated in the lease.
Does a security deposit have to be held in a separate account?
Texas does not require a separate account for residential deposits, but many management companies hold deposits in a trust account as best practice. Ask how your manager handles this.
Can a tenant use the deposit as their last month's rent?
No. A tenant generally cannot withhold final rent and treat the deposit as a substitute.
What counts as normal wear and tear?
Minor scuffs, light carpet wear, and faded paint from ordinary living are typical examples. Damage from neglect, accidents, or misuse is treated differently.
What records should an owner keep?
Keep the signed lease, dated move-in and move-out photos, the condition checklist, repair invoices, and copies of everything sent to the tenant.
Stay Compliant From Lease Signing to Move-Out
PMI Austin helps owners across Travis and Williamson Counties handle deposits, late fees, and move-outs correctly. Request a free rental analysis to see how we can support your rental.
