Generally, no. A landlord in Texas cannot simply label a payment a “nonrefundable security deposit” and automatically keep it when the tenant moves out. Texas Property Code Chapter 92 generally requires qualifying security deposits to be refunded after surrender, subject to lawful deductions.
What Counts as a Security Deposit?
Texas law defines a security deposit as an advance payment, other than a rental application deposit or advance rent, that is primarily intended to secure the tenant’s performance under a residential lease.
The legal substance of the payment matters more than its label. If a charge functions as security for the tenant’s obligations, Chapter 92’s security-deposit rules may apply.
Must a Security Deposit Be Returned?
Yes, generally. Texas Property Code Section 92.103 requires a landlord to refund a security deposit on or before the 30th day after the tenant surrenders the premises, subject to the statute’s requirements.
The tenant must provide a written forwarding address before the landlord is obligated to return the deposit or provide the required accounting. Failing to provide one does not permanently forfeit the right to the deposit.
When Can a Landlord Keep Part of the Deposit?
A landlord may deduct from a security deposit for damages and charges for which the tenant is legally liable under the lease or because of a lease violation. However, Texas law expressly prohibits withholding money for normal wear and tear.
For example, a landlord may deduct for significant damage to walls, flooring, fixtures, or other property caused by the tenant beyond ordinary deterioration. Ordinary aging from normal use generally cannot be charged.
When deductions are made, the landlord generally must provide the remaining balance along with a written description and itemized list of deductions. There is an exception when the tenant owes undisputed rent at surrender.
Can a Lease Say “Nonrefundable Security Deposit”?
Calling the payment a “nonrefundable security deposit” does not automatically make it lawful. Section 92.103 requires refunds, while Section 92.104 permits specific deductions.
A lease therefore cannot simply eliminate statutory security-deposit protections by changing the label. Certain landlord duties and tenant remedies concerning security deposits also may not be waived.
This means landlords should carefully distinguish between a true security deposit and other charges imposed under the lease.
What About a Nonrefundable Fee?
This is different from a security deposit. A landlord may charge certain fees when they are genuinely fees rather than disguised security deposits, and the lease clearly establishes what the payment is for.
Texas law also specifically recognizes a “fee in lieu of security deposit.” Under Section 92.111, when a landlord offers this option, the tenant must generally be given the choice to pay a traditional security deposit instead. The agreement for the alternative fee must be written and signed, and the statute contains specific disclosure and payment requirements.
That distinction matters because a fee and a security deposit are not automatically treated the same way.
What If the Landlord Wrongfully Keeps the Deposit?
Texas law provides remedies when a landlord improperly withholds a security deposit. Under Section 92.109, a landlord who in bad faith retains a security deposit in violation of the statute may be liable for $100, three times the amount wrongfully withheld, and the tenant’s reasonable attorney’s fees.
The law also creates a presumption of bad faith when the landlord fails to return the deposit or provide the required description and itemization within the statutory 30-day period.
What Should Tenants Do?
Tenants should keep a copy of the lease, proof of the security-deposit payment, move-in and move-out photographs, repair records, and communications with the landlord. After moving out, the tenant should provide a forwarding address in writing.
If a landlord claims deductions, the tenant should compare each deduction with the lease and Texas law. Significant disputes may warrant advice from a Texas attorney.
Conclusion
A genuinely refundable security deposit generally cannot be made automatically nonrefundable simply by putting that language in a Texas lease. Texas Property Code Chapter 92 requires qualifying security deposits to be refunded after surrender, subject to lawful deductions for amounts such as tenant-caused damage or other charges for which the tenant is legally responsible. Normal wear and tear cannot be deducted.
Landlords can use certain nonrefundable fees, including a qualifying fee-in-lieu-of-deposit arrangement, but those charges are subject to specific legal requirements. The key issue is therefore how the payment actually functions, not merely what the lease calls it.
