What North Texas Landlords Need to Know About Security Deposits in 2026
- Apr 25
- 4 min read
Get the security deposit wrong in Texas and your tenant can sue you for three times what you withheld — plus $100 and their attorney's fees. Most landlords don't know that going in. By the time they find out, it's expensive.
Here's what the law requires, what changed in 2025, and how to stay on the right side of it.
There's no cap — but there is real downside risk
Texas sets no maximum security deposit amount. You can charge one month's rent, two months', or more — whatever your market and lease allow.
Most DFW landlords charge one to two months' rent. For a typical single-family home in Plano, Richardson, or Garland renting in the $1,800–$2,200 range, that puts deposits between $1,800 and $4,400.
One thing that's not optional: how you hold the money. Security deposits must be held in trust — kept separate from your operating account. At Darling Property Management, every deposit sits in a dedicated trust account through Baselane, which keeps funds organized and audit-ready from day one.
The 30-day rule — no exceptions
This is where landlords most often get into trouble.
Under Texas Property Code § 92.103, you have 30 calendar days from the date the tenant surrenders the property to return the deposit — minus any lawful deductions — along with a written, itemized list of any amounts withheld.
Not 30 business days. Calendar days. If move-out is March 1, the deposit or disposition letter is due by March 31.
If you make any deductions, the itemized list has to actually describe each charge. "Cleaning — $200" won't hold up. "Professional carpet cleaning for pet staining in master bedroom — $175" will.
Miss the deadline or skip the itemized list, and you lose your right to keep the deposit. You also expose yourself to something worse.
The penalty for failing to return the security deposit
Under Texas Property Code § 92.109, a landlord who fails to return the deposit or provide the itemized accounting by day 30 is presumed to have acted in bad faith. The burden flips — now you have to prove you didn't.
A bad-faith finding costs you:
$100
Three times the portion of the deposit wrongfully withheld
The tenant's reasonable attorney's fees
On a $2,000 deposit, that's $6,100 plus legal fees — before you pay your own attorney. And that presumption kicks in automatically if you're even one day late.
What you can and can't deduct from security deposits
Most disputes come down to this line: damage vs. normal wear and tear.
You can deduct for:
Damage beyond normal wear and tear — holes in walls, broken fixtures, pet stains in carpet
Unpaid rent
Lease violations that cost money to remedy
Cleaning required because the unit was left in unusable condition
You cannot deduct for:
Scuffed paint, minor carpet wear, small nail holes — normal wear and tear
Pre-existing damage that was documented at move-in
Ordinary cleaning if the tenant left the unit in reasonable condition
The best protection against disputes is documentation at both ends of the tenancy. Move-in photos with timestamps, a signed move-in condition report, and the same level of detail at move-out. It's also worth having your tenant walk the unit with you and sign off on the condition. (Our spring maintenance checklist covers the inspection process in detail.)
One more thing: the forwarding address rule
Under Texas Property Code § 92.107, the landlord isn't technically obligated to return the deposit or provide the itemized accounting until the tenant provides a written forwarding address.
In practice: always ask for a forwarding address in writing at move-out. If the tenant never provides one, document that you requested it. Your exposure is limited when you've made a good-faith effort. But don't treat this as a reason to delay — acting promptly is always the cleaner path.
One 2025 change worth knowing
HB 2037 (effective September 1, 2025)
If you and your tenant have previously communicated by email, notices related to repairs and security deposit matters can now be sent by email. This aligns with how most landlords and tenants actually communicate. The requirement is that email communication already exists between the parties — you can't send a first-ever notice by email and claim it satisfies the statutory requirement.
One thing that hasn't changed, and is worth restating: emotional support animals are not pets under federal Fair Housing law. Charging a pet deposit for an ESA is a Fair Housing violation regardless of your lease language.
The bottom line
Texas gives landlords flexibility on deposit amounts but very little wiggle room on process. The 30-day deadline is firm. The itemized list is required. Bad faith is presumed if you miss either one.
If you're self-managing and unsure about your current process, it's worth a hard look before move-out season hits. Getting it right is straightforward. Getting it wrong is expensive.
Ready to know what your DFW rental is worth?
Get a free rental analysis from our team — no obligation, no pressure. We'll tell you exactly what your property should rent for in today's North Texas market.
Questions? Call us at (469) 324-9605 or email info@darlingpropertymanagement.com
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