When a tenant moves into your residential rental property, they typically provide a security deposit equivalent to 1 month’s rent plus an additional deposit for each pet. This deposit is held in trust by a property manager until the end of the lease term. In Texas, landlords or property managers are legally required to refund the deposit within 30 days of the tenant’s move-out date. However, there are certain circumstances where the landlord or property manager has the right to withhold this deposit.

1. Nonpayment of Rent: If the tenant fails to pay rent without cause, then the security deposit can be retained to cover the overdue amount. Tenants are contractually obligated to pay rent, and failure to do so allows the landlord to withhold an amount equal to the past due rent.
2. Early Lease Termination: In cases where the tenant terminates the lease before its expiration without a legal exception (e.g., military orders), then the security deposit may be retained to cover associated costs. Lease agreements typically include clauses protecting the landlord’s rights in such situations.
3. Property Damage: Damages beyond normal wear and tear entitle the withholding of the tenant’s deposit. Examples include holes in walls, carpet stains or rips, water damage to floors, damaged countertops and broken windows or doors. It’s essential to maintain an itemized list of damages and associated repair costs to justify withholding the deposit.
4. Cleaning Costs: While cleaning for normal wear and tear cannot be deducted from the deposit, excessive cleaning necessitated by tenant negligence or misconduct can be covered. For instance, if a tenant leaves the property in a significantly dirty or damaged condition, then cleaning costs can be deducted. Documenting the condition of the property through photographs can help substantiate these charges in case of disputes.

These scenarios illustrate situations where the tenant’s security deposit may be withheld. However, the goal is always to have an amicable relationship with tenants who care for your investment and honor their lease so that the entirety of the deposit can be promptly returned. Such a relationship reduces vacant days needed for repairs and cleaning thereby increasing the likelihood a higher ROI. Having a professional property manager like Luna PMG can help increase this likelihood.