Whether you rent property in San Antonio, TX, or somewhere else in the country, understanding how to handle security deposits is vital to your success. In Texas, the laws about handling tenant deposits are clear, so it's important to know what they are and how they apply to you.
There are some important landlord security deposit tips that every property owner should know.
Read on to learn more about how to handle security deposits so you're doing everything by the book.
Maximum Amount for Security Deposits
Every state has a threshold regarding how much money landlords can ask for when receiving a security deposit. In Texas, you are allowed to charge the amount of money that you deem fair to help mitigate the risk of potential damage.
This means you can ask a tenant for two times the amount of rent when collecting a security deposit if you think it's reasonable. For example, if you charge $1,400 each month for rent, you can ask for $2,800 as a security deposit. The state of Texas doesn't have a firm maximum amount, so use your best judgment.
Holding a Security Deposit
The purpose of taking security deposits is to cover the cost if your property becomes damaged when a tenant moves out. It may also be used to cover any unpaid rent in the event of a non-payment eviction.
The landlord legal requirements in Texas state that you can't keep the deposit to cover normal wear and tear, such as worn carpeting or a patch or two of peeling paint. However, you can keep the deposit if there is substantial damage to your property. This could include things like broken windows, massive stains, or holes in the wall.
Another thing that might be covered by security deposits is if the tenant makes changes to the lease. For example, if the tenant paints the walls and it's explicitly prohibited in the lease, you can use the deposit to re-paint them.
Handling Tenant Deposits
There are some security deposit regulations in place regarding how you handle tenant deposits, including when the deposit must be returned to the tenant. A forwarding address must be provided to you by your tenant, and then you have 30 days after they move out to return the deposit to them.
If there are any deductions, you must provide the tenant with an itemized list of deductions in those same 30 days. If the tenant owes you rent, this does not apply. However, if you don't provide your tenant with the itemized deductions list, you may have to pay attorney's fees.
Keep Your Deposits Organized
Knowing how to handle security deposits properly is the best way to protect yourself and your tenants from issues in the future. Make sure you're familiar with Texas law so that you're doing everything right.
At PMI Premier Rentals, we have nearly two years of industry experience helping landlords in the San Antonio, TX area, so contact us today to find out how we can help you with your property management needs.
