The first thing a Texas landlord needs to know about security deposits, is that Texas is a “property rights” state. Texas Judges consistently rule in favor of people’s property rights. While the real estate is indeed the landlords property, the security deposit is the tenants property. Any claims made against the tenants deposit must be done in accordance with the lease agreement, and the law. Failure to comply will expose the landlord to some serious consequences, as you will soon see. As you begin to look for Property Management in Tomball, you will soon find out why we are the #1 fit for your Tomball Property. security deposits

The tenant is entitled to a full accounting, and any refund, within 30 days of their move out. It’s a sad day for the landlord misses this deadline, or one who wrongfully claims a deduction to save a few hundred bucks, lose the dispute, and end up owing his former tenant thousands of dollars. This post will discuss guidelines that should keep landlords out of trouble when making claims on a tenant’s security deposit.

If the landlord is smart, a professional property manager will be holding this deposit, and will be completing the accounting. If this is you, you can stop reading now. If you’re curious about the process keep reading.

Texas Property Code Sec. 92.109. LIABILITY OF LANDLORD.

  1. A landlord who in bad faith retains a security deposit in violation of this subchapter is liable for an amount equal to the sum of $100, three times the portion of the deposit wrongfully withheld, and the tenant’s reasonable attorney ‘s fees in a suit to recover the deposit.
  2. A landlord who in bad faith does not provide a written description and itemized list of damages and charges in violation of this subchapter:
    1. forfeits the right to withhold any portion of the security deposit or to bring suit against the tenant for damages to the premises; and
    2. is liable for the tenant’s reasonable attorney ‘s fees in a suit to recover the deposit.
  3. In an action brought by a tenant under this subchapter, the landlord has the burden of proving that the retention of any portion of the security deposit was reasonable.
  4. A landlord who fails either to return a security deposit or to provide a written description and itemization of deductions on or before the 30th day after the date the tenant surrenders possession is presumed to have acted in bad faith.

As you can see, the law protects the tenant’s property rights, and has some teeth ready to bite the unscrupulous landlord who wrongfully withholds a deposit refund. It is not recommended that you take on security deposit accounting as a DIY project unless you are well versed in all the applicable laws. Having been a DIY landlord back in the day, and knowing what I know now, I can tell you that it was only luck that kept me from being sued by a couple of my former tenants.

The following are some pearls of wisdom that will help the DIY landlord avoid most disputes, and win the ones that they cannot avoid. When considering deductions from the security deposit, there are many factors and calculations that must be considered before a lawful deduction can be made. One of these is the condition of the property at move in. The landlord should have a complete set of photos of the property taken just prior to occupancy, to compare with condition of the property at move out. On the other side of the fence, the tenant should have turned in an Inventory and Condition Form. This document is a tool that the tenant will use to protect their deposit from wrongful deductions. The Inventory and Condition form lists all defects and blemishes noted by the tenant at the time of move in. If the landlord tries to deduct the deposit for any of these pre existing issues, the tenant will have a good case for dispute.

It is also important to understand the concept useful service life, and pro-rated damage. The service life of carpeting and interior paint in a rental house is 5 years. If the tenant moved into brand new carpet, and moves out 6 years later, and the carpet needs replacement, no deposit deduction can be made. But if the tenant moved into the same brand new carpet, and moves out in only two years, and the carpet is ruined, the landlord is entitled to claim the lost 3 years of service life, based on the original cost of the carpet. For example, If the carpet cost $1000 two years ago, and is now ruined. A landlord could claim $600 against the security deposit, to offset the cost of new carpet. The new carpet must be installed to make this a lawful claim. The same concept applies to interior paint. Save your receipts.

Normal wear and tear is another consideration that must be factored into the calculation. The deposit cannot be deducted for damage considered normal wear and tear. This includes nail holes where the tenant hung a few pictures on the wall, traffic wear in carpet, the odd scuff or ding in a wall. The longer the tenant occupies the property, the more wear and tear there will be. Most times, above normal wear and tear is obvious. You’ll know it when you see it. Still, it is subjective, and may be disputed. The rule of thumb is to be conservative when deciding if the wear and tear is normal, or above normal. The repairs must be completed, and receipts saved.

Often times landlords like to do the make ready work themselves. If this is you, and you are working on something where the deposit is being deducted, you can only charge for the materials purchased for the claimed repair. You cannot pay yourself labor. It is recommended that you use a 3rd party unbiased vendor who will give you a written invoice that you can deduct, and later defend if disputed.

Even when you do everything right, some tenants will still dispute charges. Usually, showing the disgruntled ex-tenant “before and after” occupancy photos will make them go away quietly. The move in condition report that is designed to protect the tenant, is also good at protecting the landlord. You may be charging for a hole in the wall. If they claim the hole was there at move in, it should be noted on the report. If it’s not on the report, and no “before” photos show the hole, the chances are very good that you will win this dispute.

If you are a landlord long enough, you will likely be involved one of these disputes sooner or later. The best protection you can have is to assume that every deduction you make from the tenant’s security deposit will be disputed and brought to court. Whenever you make a deduction, be prepared to sell it to a skeptical judge.

Having done our homework and know the laws, ask questions before you choose a Company for Property Management in Tomball. If they cannot answer your questions and don’t seem knowledgeable, don’t settle. Call us at 713/830-1888.

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