The deposit is where a routine move-out quietly becomes a five-figure lawsuit. The law is short. The penalty for missing it is not.
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Texas deposit law fits on a page. The trouble is what happens when you miss the deadline - a $1,800 dispute can become $5,500 plus the tenant's attorney fees, and the burden of proof lands on you.
Most owners know there's a 30-day rule. Far fewer know what starts the clock, what they're actually allowed to keep, and how the documentation has to be built to survive a challenge. Get those three things right and deposits are a non-event. Get them wrong and it's one of the most expensive mistakes in residential rentals.
Under Texas Property Code Section 92.103, you must return the deposit - or send an itemized list of deductions with any remaining balance - within 30 days of the tenant surrendering the unit. The detail owners miss: the clock doesn't start at move-out. Under Section 92.107, it starts once the tenant gives you a written forwarding address.
That sounds like a loophole in your favor. It isn't a reason to sit on a deposit. Texas courts read the deposit rules in the tenant's favor, and the cleaner habit is to do the accounting promptly and mail it to the last known address if no forwarding address arrives - documented - so you're never the one who looks like they were stalling.
Section 92.104 lets you deduct for damages and charges the tenant is legally liable for under the lease. What it flatly prohibits is deducting for normal wear and tear - the ordinary aging any unit goes through with a person living in it.
The line between the two is where most disputes live:
If you keep any part of the deposit, you must provide a written description and an itemized list of every deduction along with the balance. A lump-sum "$600 withheld for damages" doesn't satisfy the statute. Each line needs a description and an amount, ideally backed by a photo and a repair cost. Skipping the itemization isn't a small slip - it's its own bad-faith violation.
This is the part that should make every owner careful. Under Section 92.109, a landlord who in bad faith keeps a deposit is liable for $100, plus three times the wrongfully withheld amount, plus the tenant's attorney fees. And if you fail to return the deposit or send the itemization within 30 days, the law presumes you acted in bad faith - then puts the burden on you to prove your deductions were reasonable.
Run the math on a routine case: a $1,800 deposit wrongly withheld becomes $100 + $5,400 + legal fees. The attorney-fee provision is what makes even a small deposit dispute worth a lawyer's time, which is why these cases get filed. The lesson isn't to be stingy with deductions - it's to be fast, documented, and conservative.
Texas places no statutory limit on the deposit amount - one of the few states without one. The market sets the ceiling: one month's rent is typical, 1.5 to 2 months is common for higher-risk applicants. But "no cap" tempts owners into oversized deposits that make a unit harder to lease and, if they track a protected characteristic, invite fair-housing scrutiny. And calling something a "non-refundable cleaning fee" doesn't escape the rules - Texas courts generally treat any move-in money that functions as a deposit as a deposit, subject to the same 30-day accounting.
The single habit that protects you through all of this: a move-in and move-out condition report with dated photos and the tenant's signature. Disputes are won on documentation, not memory.
We document condition at move-in and move-out, prepare the itemized accounting against real repair costs, and issue the return inside the 30-day window - so the file is clean and the bad-faith clock never works against you. If deposit math and move-out timing aren't how you want to spend your month, we can handle it.
Talk to Alta ResidentialThe deposit is the last step of a tenancy - the first steps decide how smoothly it ends. Good tenant screening reduces the damage you're ever disputing, and knowing what a lease break costs keeps the whole move-out in perspective.
Thirty days. Under Texas Property Code Section 92.103 you must refund the deposit, or send an itemized statement of deductions plus any balance, within 30 days. The clock starts once the tenant has surrendered the unit and given you a written forwarding address.
Normal wear is the gradual aging you'd expect from ordinary living - minor scuffs, faded paint, light carpet wear. You cannot deduct for it. Damage is different: holes in walls, broken fixtures, pet stains, anything beyond what time and ordinary use would cause.
No. Texas sets no statutory cap, so the market sets the ceiling. One month's rent is typical; 1.5 to 2 months is common for higher-risk applicants. An oversized deposit can make a unit harder to lease and, if tied to a protected class, raise fair-housing concerns.
Technically the 30-day clock doesn't start until they provide one in writing. But the safe move is to complete the accounting anyway and mail the itemized statement and any balance to the last known address, with proof of mailing, so you can show good-faith compliance.
This guide is general information for Texas rental owners, not legal advice. Statutes and their interpretation change. Confirm specifics with a licensed Texas attorney before withholding any portion of a deposit. Alta Residential · 325 N. St. Paul St., Suite 3100, Dallas, TX 75201 · 214-775-0807.