Texas Security Deposit Laws in 2026

I have been dealing with Texas rental properties through Hemlane for almost six years now. Want to know what causes more arguments, more lawsuits and more angry phone calls than anything else? Security deposits. Every single time. If you need a property management software that has strict lease agreement templates, check out Hemlane.

Tenants think landlords are stealing from them. Landlords think tenants are trying to get away with destruction. And half the time both sides are just confused about what the actual law says.

So we are going to fix that right now.

Let's Start With the Basics, What Even Is a Security Deposit?

A security deposit is money you hand over when you sign a lease. You are supposed to get it back when you move out assuming you did not wreck the place. That's the whole point. It's basically insurance for the landlord.

Texas Property Code § 92.102 lays this out pretty clearly, though the legal language makes it sound more complicated than it is.

But here's what trips people up constantly: not every fee you pay is a security deposit.

Your landlord makes you pay $75 to run a background check? That's gone. You're never seeing that again—it's a fee, not a deposit. Same with "administrative fees" or "processing fees" or whatever else they call them. If the word "nonrefundable" is anywhere near it, it's not a deposit.

Now, some landlords get greedy here. I've seen leases asking for $300 "application fees" when the actual cost to run your credit and background is maybe forty bucks. That extra $260? That's just them pocketing money. Should they do that? No. Do they? All the time.

Everything and I mean everything needs to be spelled out in your lease. If your landlord hands you a verbal agreement or gets vague about fees walk away.

How Much Money Can Landlords Actually Take From You?

Texas puts limits on this, thank god. Otherwise, landlords would probably ask for your firstborn.

Unfurnished places: Maximum of one month's rent Furnished places: Up to two months' rent

Pretty simple math. Rent is $1,300 a month for an unfurnished apartment? Your landlord cannot demand more than $1,300 as a deposit. They try? That's illegal.

Furnished apartments—meaning the place comes with actual furniture, not just a stove—they can go higher. Two months' rent. So that same $1,300 apartment would max out at $2,600.

What About Your Dog?

Oh, you've got pets? Get ready to pay more.

Most landlords charge an extra month's rent as a pet deposit. So now we are talking:

• Unfurnished apartment + one dog = $2,600 total deposit
• Furnished apartment + one dog = $3,900 total deposit

Is that fair? Debatable. But at least Texas law caps it. I've got friends in California paying whatever landlords feel like charging.

One thing though—some Austin landlords try charging three months' rent for regular unfurnished apartments with no pets. I see this in Dallas too sometimes. That's not legal unless the Texas Real Estate Commission gave them special permission, which almost never happens. It's only for seriously distressed properties or areas with major housing shortages that the Commission officially recognized.

Don't pay more than you're supposed to just because a landlord asks.

The Separate Bank Account Rule That Gets Ignored Constantly

This blows people's minds when I tell them: your security deposit has to go into its own separate bank account. It can't just sit in your landlord's regular checking account mixed with their grocery money and car payments.

Texas Property Code § 92.103 requires this. Not suggests—requires.

Why? Because if your landlord goes bankrupt or gets sued or whatever, your deposit stays protected. It's not part of their personal assets that creditors can grab.

Except tons of landlords don't actually follow this rule. Especially small-time landlords with just one or two properties. They keep everything in one account and figure they'll just "remember" how much is deposits versus their money.

Last year I helped a landlord who'd been renting their house out for seven years. They had no clue about the separate account thing. Just kept all rental income together in one Wells Fargo account and tracked deposits in Excel. When I explained the law, they kind of panicked.

This is exactly why Hemlane's platform handles this automatically. It separates everything from day one so landlords can't accidentally break the law (or "accidentally" break it).

What Can They Actually Deduct? (This Is Where the Fights Start)

The law says landlords can only deduct for damage "beyond normal wear and tear."

Great. Super helpful, right? What does that actually mean when you're arguing about carpet stains?

Normal Stuff That Happens When People Actually Live Somewhere

The Texas Attorney General's office says these things are normal and expected:

Little nail holes from hanging pictures is normal. Scuff marks on the walls from moving your couch is normal. Carpet that has flattened in high-traffic areas is normal. Paint fading from the sun is normal. Minor floor scratches from regular furniture is normal.

You get the idea.

Last month, a tenant called me practically in tears. Her Fort Worth landlord charged her $400 for "excessive wall damage." Want to know what it was? Twelve small nail holes from hanging family photos and a couple mirrors.

That's complete nonsense. Nail holes are expected unless you've got, like, fifty of them forming some weird pattern. People hang things on walls. That's what walls are for.

Actual Damage That You Did Cause

Real damage is different:

• Fist-sized holes in drywall
• Cigarette burns on carpet or countertops
• Appliances you broke (not ones that just died from being old)
• Doors that won't close because you slammed them too hard
• Carpet stains so bad you'd need to replace the whole thing
• Stuff that's completely missing (like the microwave disappeared)

The question is, would this have happened anyway from someone just living there normally for a year or two?

Spilled red wine on beige carpet and never cleaned it, leaving a giant purple stain? Yeah, that's probably damage. Some general wear on the carpet from walking on it every day? That's just life.

The 30-Day Rule Is Your Nuclear Option

Here's my favorite part of Texas law: landlords get 30 days after you move out to return your deposit or send you an itemized list of deductions. That's it. 30 days.

According to Texas Property Code § 92.109, if they miss that deadline, they lose. They don't get to keep any of your money. Zero.

And it gets better—if they wrongfully keep your deposit, you can sue for up to three times the amount, plus they pay your attorney fees.

I watched this happen to a San Antonio landlord a couple of years ago. Family emergency, completely forgot to mail the check and ended up five days late. The tenant sued and won $3,600 for a $1,200 deposit.

Thirty days means thirty days. It's not a guideline.

That Itemized List Better Be Detailed

If your landlord keeps any of your deposit, they can't just write "damages $700" on a piece of paper and mail it to you.

They need specifics:

• What broke or needed fixing
• Exactly how much each repair cost
• How they calculated those costs

Bad: "Cleaning and repairs - $700"

Good: "Bedroom door replacement, large crack near handle - $285 for door and labor Professional carpet cleaning for pet urine in living room - $220 Kitchen cabinet door hinge - $45 parts and installation"

See how one is vague and the other tells you exactly what they are charging for? If they do not give you that detailed breakdown, they legally forfeit the right to keep your money.

At Least Taxes Are Simple Here

Security deposits aren't taxable. Not for landlords when they get them, not for tenants when they get them back.

The IRS doesn't consider deposits as income because the money still technically belongs to the tenant. The landlord's just babysitting it.

If a landlord ends up keeping part of your deposit for repairs, then that money becomes taxable income for them. But while it's just sitting there waiting? Nope.

Same for you as a tenant. Getting your $2,000 deposit back is not income; you are just getting your own money returned.

What Happens If Your Landlord Sells the Property?

People stress about this but it's actually handled pretty cleanly.

Your security deposit transfers to the new owner automatically. You don't pay a second deposit. Your original deposit just moves over to the new owner's responsibility, according to Texas Property Code § 92.104.

The sale paperwork should list all tenant deposits. The new owner inherits all the obligations—including eventually returning your deposit when you move out.

I worked with someone buying a 12-unit apartment building last year. They were so focused on the purchase price and rental income that they completely forgot about the deposits. Closing day, they suddenly realized they were taking on about $38,000 in security deposit obligations. Nobody had really explained that to them.

That money isn't theirs—it belongs to the tenants. It just transfers with the property.

Document Everything or Regret It Later

I'm going to sound like a broken record here but seriously take photos of everything.

Moving in:

Walk through every room with your phone camera. Video works great too. Get close-ups of any existing scratches, stains, marks, whatever. Most phones automatically timestamp photos which helps prove when you took them.

Get a receipt for your deposit payment. Not a text confirmation but an actual written receipt.

Try to do a walk-through with your landlord and both sign off on the condition. If they won't do that, at least ask for a move-in condition checklist.

Keep every piece of paperwork related to your lease.

Moving out:

Clean thoroughly but do not feel obligated to hire professionals unless your lease specifically requires it. Regular cleaning is your responsibility. Making the place look brand new is not.

Take more photos and videos showing how you left everything. This is your proof later.

Write down when you returned the keys and gave your forwarding address. Better yet send it certified mail so you have proof they received it.

Save every email, text message, letter, all of it.

One Dallas tenant I know got charged $850 for carpet damage. She pulled out her move-in photos showing those exact stains already existed. The landlord dropped the charge immediately. Without those photos, she would've been screwed.

Renting Without a Security Deposit? It's Possible

Some landlords will waive the deposit if you're a really strong candidate. Places like Hemlane even have programs for this.

But nothing's free. Usually you are looking at:

• Higher monthly rent (maybe $100-200 more)
• Excellent credit score (700+, probably higher)
• Great rental history with references
• Solid proof of income

For tenants, the upside is obvious—you don't need two or three thousand dollars upfront. When you're trying to move, that can be the difference between getting a place or not.

The downside? You're paying more every month. And you're still liable for damage when you leave, you just don't have a deposit sitting there to cover it.

For landlords, it fills vacancies faster since fewer people can't afford to move in. But you're taking a bigger risk if someone ruins your property.

The Urban Institute has done research showing that security deposits are a major barrier for low-income renters. These alternative setups help some, but they're not perfect for everyone.

So Your Landlord Screwed You, Now What?

Your deposit didn't come back. The deductions look made up. You never got an itemized list. What's next?

Write them a letter first. Certified mail. Sometimes it is genuinely a mistake. Explain the problem and cite the specific Texas Property Code sections. Give them a chance to fix it.

File complaints. Local tenant rights organizations, Better Business Bureau and whoever will listen. Create a paper trail.

Small claims court. For anything under $20,000, you don't need a lawyer. And remember—you can get triple damages plus attorney fees. A $1,800 deposit could turn into a $5,400 judgment.

Texas Attorney General's Consumer Protection Division. Contact them at texasattorneygeneral.gov. They don't handle individual cases, but repeated complaints about the same landlord can trigger an investigation.

Just think about whether it's worth your time before diving into court. $200 dispute? Maybe not. $1,500 or more? Absolutely go after it.

Final Thoughts

Texas security deposit laws aren't rocket science. But you would be amazed how many people, landlords and tenants both, completely screw this up.

Tenants: know what landlords can legally charge and deduct. Take photos of everything. Don't let bogus charges slide. That money belongs to you.

Landlords: stay within the legal limits, keep deposits separate, return them on time with detailed explanations. Triple damages add up fast. It's not worth the risk.

At Hemlane, we built our whole platform around getting these details right because we have seen how badly things can go wrong. Automated tracking, documentation, deadline reminders, all that boring administrative stuff that prevents lawsuits.

Look, rental disputes are going to happen. People disagree about what's fair. But most of these fights could be avoided completely if everyone just understood the rules from the beginning.

Quick disclaimer: this is information, not legal advice. Got specific questions about your situation? Talk to a Texas real estate attorney or contact the Texas Attorney General's office.