When a tenant moves in, they usually give their housing provider a security deposit — money given to the landlord as proof of intent to move in and care for the residence. The security deposit often is equal to one month’s rent and it serves to pay for repairs or damages caused by the tenant that must be fixed once the tenant leaves. However, if the place is in good shape when the tenants depart, the tenant gets the money refunded to them.
Often when tenants move out, they try to use their security deposit as their last month’s rent. It may be tempting for tenants, but it’s not legal. According to Texas law, a tenant legally cannot substitute their security deposit as their last month’s rent. If they do so, they may be liable for paying the landlord up to three times the amount of the security deposit, plus any applicable legal fees.
When a tenant decide to leave, they should schedule a time to walk through the property with the owner. At that point, both parties can look at the cleanliness of the unit, discuss any damages, and what is considered normal wear and tear. Normal wear and tear is an important distinction. A landlord can’t charge a tenant to replace carpet that simply aged during the tenant’s occupation. However, if the tenant’s dog chewed up parts of the carpet, the landlord can deduct to have the carpets professionally repaired or possibly replaced. In this day and age of cameras on cell phones, it’s a good idea for both properties to visually detail conditions in case any issues arise later.
Once the tenants surrenders the keys and gives up the property, the landlord has 30 days to write a statement detailing any damages, itemize any money that will be withheld from the original amount to make repairs, and send a check for the remaining amount to the tenant’s forwarding address. The forwarding address part is important — housing providers can’t mail checks to addresses they don’t have. However, if your landlord does not return your security deposit, tenants can file a suit in small claims court to recover the funds. The price for landlords if they fail to return the deposit or itemize deductions can be up to three times the portion of the deposit wrongfully withheld.
It’s important to follow all the rules even if your tenant may be acting in bad faith. We had a tenant that moved in and complained about everything. After two months, she moved out and broke her lease. Even though she was in the wrong for breaking the lease, we failed to send the letter itemizing everything when she left, including damages to the property and her breaking the lease. And even though she was in the wrong, she sued us in small claims court. We had to hire a lawyer and in the end, she wound up with her original security deposit back even though she owed us months of unpaid rent. In hindsight, we should have written the letter and explained our decisions about the security deposit. It is legal to withhold a security deposit for unpaid rent, but our failure to document it properly cost us time, money, and angst.
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