What is a security deposit?
A security deposit is money a tenant pays upfront when signing a lease to protect the landlord against unpaid rent, damage beyond normal wear, or lease violations in Texas.
In Texas, a security deposit is a sum of money a tenant provides to a landlord when entering into a lease. The deposit serves as a financial guarantee against non-payment of rent, damage to the rental unit beyond ordinary wear and tear, or breach of lease terms. Texas Property Code Section 92.103 governs how deposits must be handled.
Unlike an escrow deposit, which is typically held by a third party during a transaction, a security deposit in the rental context remains under the landlord's control but is subject to specific legal obligations. Landlords may use the deposit to cover unpaid rent, repair costs for damage caused by the tenant, or other lease violations.
Texas law does not set a maximum cap on security deposit amounts, so landlords can charge whatever the market allows. In the Greater Austin area, typical security deposits range from one month's rent for standard units to two months' rent or more for premium properties or tenants with lower credit profiles.
Landlords must return a security deposit within 30 days after the tenant moves out, along with a written itemized list of any deductions. If the landlord intends to keep part or all of the deposit, they must provide documentation of the damages or charges claimed. Tenants who disagree with deductions can dispute them through small claims court.