Security deposits are one of the easiest things in residential landlording to get wrong. The Texas Property Code's rules are specific, the deadlines are short, and the penalties for noncompliance are harsh — on purpose. The legislature wanted landlords to take deposit handling seriously, and it priced the consequences to match.
This article walks through Texas Property Code Chapter 92, Subchapter C — the statute that governs residential security deposits — as it applies to DFW landlords in 2026. Commercial leases are governed separately and are not addressed here.
This is educational information, not legal advice. For specific disputes or high-stakes situations, consult a licensed Texas attorney.
What Is a Security Deposit Under Texas Law?
Texas Property Code §92.102 defines a security deposit as any advance of money, other than a rental application deposit or an 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.
Translation: if you collect money at lease signing that isn't application fee and isn't prepaid rent, it's a security deposit. Calling it a 'cleaning fee' or 'pet fee' or 'damage reserve' doesn't change that — the statute controls, not the label.
No Statutory Maximum — But Market Norms Apply
Texas does not cap residential security deposits by statute. In practice, DFW market norms are usually one month's rent for a standard residential rental, sometimes 1.5 or 2 months for an applicant with marginal credit, pets, or other elevated risk. The lease sets the amount, and the tenant agrees to it at signing.
The 30-Day Return Deadline
The critical rule: Under §92.103, a landlord must refund a tenant's security deposit no later than 30 days after the date the tenant surrenders the premises — provided the tenant has given the landlord a forwarding address in writing.
Two things to understand clearly:
The Clock Starts at 'Surrender,' Not at Lease End
The 30-day clock doesn't start when the lease technically ends. It starts when the tenant surrenders possession — which typically means handing over keys, removing their belongings, and providing a forwarding address. For a clean move-out, this is usually the same day. For a holdover or contested move-out, the surrender date can be later.
The Forwarding Address Triggers the Obligation
§92.107 is the backstop: the landlord is not obligated to return the deposit (or provide an itemization) until the tenant provides a written forwarding address. If the tenant never provides one, the 30-day deadline never formally starts.
As a practical matter, most tenants provide forwarding addresses and landlords should document when they received it. Capture the forwarding address on the move-out checklist and keep a copy.
What You Can Legally Deduct
Under §92.104, a landlord may deduct from the security deposit:
- Damages to the premises for which the tenant is legally responsible.
- Amounts the tenant owes under the lease — unpaid rent, late fees, utility charges the tenant was responsible for, lease-break fees that were clearly stated in the lease, etc.
What you cannot deduct: normal wear and tear. The statute specifically excludes 'normal wear and tear' from damages. §92.001(4) defines 'normal wear and tear' as deterioration that results from the intended use of a dwelling, including (but not limited to) breakage or malfunction from age, natural forces, or intended use — and specifically excluding deterioration that results from negligence, carelessness, accident, or abuse.
Wear-and-Tear Examples (Can't Deduct)
- Minor scuffs on walls from normal use.
- Worn-through carpet in traffic areas after a multi-year tenancy.
- Faded paint and discolored grout.
- Loose hinges or sticking doors from settling.
Damage Examples (Can Deduct)
- Large holes in walls, unapproved painted colors, or drawings on walls.
- Heavy pet staining, odor, or damage to floors.
- Broken appliances beyond age-related failure.
- Missing or damaged fixtures, blinds, or hardware.
- Damage from neglect — mold from unreported leaks, burn marks, gouged flooring.
The line between wear and tear and damage is judgment-dependent, but the statute puts the burden on the landlord. If it's close, document carefully and be prepared to justify every deduction with photos and cost records.
The Itemization Requirement
Under §92.104(c), if the landlord retains any portion of the security deposit, the landlord must provide the tenant with a written description and itemized list of all deductions, along with the remaining balance.
What 'itemized' means:
- Description of the damage (not just 'damage' — 'damage to living room wall: 18-inch hole').
- Amount charged for each item.
- Basis for the amount (repair invoice, replacement cost, labor hours × rate).
Itemizations that say 'cleaning — $300' with no further detail are vulnerable to challenge. Be specific and keep supporting documents.
The Penalty for Getting It Wrong
Here is where Texas gets serious. §92.109 provides that a landlord who acts in bad faith in retaining a security deposit is liable for:
- $100,
- plus three times the portion of the deposit wrongfully withheld,
- plus the tenant's reasonable attorney's fees.
In practical DFW dollars: a landlord who wrongfully withholds a $2,000 deposit in bad faith can be liable for $100 + $6,000 + the tenant's attorney's fees. Six to ten thousand dollars in exposure on what started as $2,000.
What's 'Bad Faith'?
Texas courts interpret bad faith as conduct that is not merely wrong but is dishonest or designed to deceive. A landlord who honestly believed damages were $500 when a court ultimately finds them $300 has not acted in bad faith. A landlord who never sent an itemization, never returned the balance, and ignored the tenant's written demands — that's the profile of bad faith.
But — and this is important — the statute creates a presumption of bad faith if the landlord (1) fails to provide a written itemization and (2) fails to return the deposit within the 30-day window after surrender and a proper forwarding address. That presumption flips the burden: the landlord has to prove good faith.
Practical Compliance for DFW Landlords
Document Move-In Condition
A photographed, dated move-in condition report signed by the tenant is the single best defense against security deposit disputes. If the scratched cabinet door was there on move-in, prove it — before the tenant is arguing otherwise.
Document Move-Out Condition
Same discipline. Walk the property the day the tenant surrenders. Photograph everything. Compare to the move-in report. Document damages with specific, dated images.
Get Estimates or Invoices for Repairs
Whatever you deduct, be able to back up with a paper trail. Handyman invoice, carpet-cleaning receipt, paint material cost — have the documentation when you send the itemization.
Send the Itemization Inside 30 Days
Even if the net refund is $0 (deductions ate the full deposit), you must send the itemization. A clean certified-mail or email send (if the lease permits electronic notice) protects against later 'I never received it' disputes.
Don't Retaliate
Texas law forbids retaliation against a tenant for exercising statutory rights, including demanding their deposit back. Handle disputes professionally — the worst thing a landlord can do when sued for wrongful deposit withholding is to respond emotionally.
Let Us Handle Deposit Compliance for You
Security deposit rules are exactly the kind of thing that a property manager exists to get right, every time. If you'd rather not think about §92.104, we don't blame you. Let us handle it.
Call (817) 332-7368 Owner ServicesCommon Mistakes We See
Missing the 30-Day Deadline
The most common mistake, and the most dangerous. Owners get busy, travel, wait for a contractor's estimate, and suddenly it's day 32 and they haven't sent anything. The statutory presumption of bad faith is now in play, and a tenant who wants to push is going to win.
Vague Itemizations
'Cleaning — $400. Repairs — $600.' That's not itemized and it's not defensible. Courts read the statute literally.
Charging for Wear and Tear
Replacing five-year-old carpet at the tenant's expense because 'it looks worn' is not a lawful deduction. The carpet wore out from being carpet. That's the owner's cost, not the tenant's.
No Move-In Documentation
If the first documented condition of the property is a move-out walkthrough showing damage, the tenant's 'that was already like that' defense just got much easier.
Retaliation or Delay Tactics
Holding a deposit as leverage — 'I'll release it when the tenant signs this' — is both a legal problem and an ethical one. Follow the statute. Don't improvise.
Bottom Line
Texas security deposit rules aren't complicated, but they are strict. Document condition on both sides, take the 30-day deadline seriously, itemize carefully, distinguish wear and tear from damage, and keep receipts for anything you deduct. Do that consistently and deposit disputes become rare — and when they happen, you win them.