You collect security deposits as a means to repair damage caused by tenants and their guests. Texas law allows you to use security deposits only for repairs beyond normal wear and tear. You can’t use a tenant’s security deposit for cabinet refacing or upgrading appliances.
Normal wear and tear refers to the deterioration of a rental unit under normal use where a tenant takes reasonable care of the premises. It does not include breakage or malfunction that results from carelessness, negligence, accident, or abuse by a tenant, a family member, or a guest.
Under Title 8, chapter 92 of the Texas Property Code, landlords may use a tenant’s security deposit to cover “damages and charges for which the tenant is legally liable under the lease or as a result of breaching the lease.” For example, if your lease prohibits your tenant from installing custom drapery rods, and they do anyway, they become financially responsible for filling the holes and repainting the damaged area.
Tenants are responsible for repairing any damage beyond normal wear and tear. The following damages are not considered wear and tear. If your tenant hasn’t made proper repairs by the time they move out, you have a legitimate reason to use their security deposit to pay for those repairs.
1. Big holes in the wall
Unlike small pin holes, large holes in the wall are not considered normal wear and tear. Tenants must properly repair large holes, or you can deduct the cost of repair from their deposit.
Large holes are commonly caused when tenants drill carelessly through drywall, hammer too hard, hang pictures with large masonry nails, and install hardware that pulls the plaster off when removed.
Excessively large holes are often caused by roughhousing, arguments that turn physical, and being careless with furniture. It doesn’t take much to put a fist, a foot, or a chair through drywall.
Your tenant might attempt to repair large holes, but if they do it at the last minute by stuffing a sock in the wall and covering it haphazardly with a DIY kit, you can probably still use their deposit to pay for a professional repair. If they stuff something in the wall, it’s likely a fire hazard, so be glad when a DIY job is obvious.
2. Large stains, burns, and rips throughout the carpet
Carpet gets naturally worn down quickly, and dirty or worn carpet isn’t enough to withhold a deposit. However, if your tenant spills a cup of grape juice on your carpet, they’re responsible for cleaning it up. If they can’t get the stain out by the time they move out, you can use a portion of their deposit to pay for a professional to do it. Keep in mind, if you routinely clean the carpet after every turnover, you can’t charge a tenant for regular carpet cleaning. You can only charge the tenant for the non-routine service of expert stain removal.
In some circumstances, depending on the extent of damage, you might be able to use the tenant’s deposit to replace the carpet if the damage would prevent you from renting the unit. For example, a small stain in a corner wouldn’t be a good reason to replace the carpet. However, a large stain in the middle of the living room might be.
3. Cigarette smoke damage to the drapes and walls
Cigarette smoke can ruin walls and drapes. You may never get the smell of stale smoke out of your drapes. If that happens, you can charge the tenant for new drapes (or curtains).
Tar and nicotine cause a yellow discoloration that concentrates mostly on the ceiling since smoke rises. There’s also science that suggests thirdhand smoke on walls can cause health problems. If a tenant smoked in your rental unit, you’ll have to thoroughly clean the walls and ceilings before you repaint.
If you paint after every turnover, that’s considered routine. You can’t charge your tenant for routine painting, but you can charge them for the extensive cleaning necessary to prepare for a fresh paint job. If you don’t routinely paint after each turnover, you can charge the tenant for painting as well.
4. Missing appliances
If you own the appliances in your rental unit, your tenant can’t remove them from the premises without your permission. If you discover a missing appliance after a tenant moves out, you have every right to use their security deposit to pay for a new one.
5. Severe water damage
Water damage is an unfortunate yet common result when a tenant fails to report a leaky toilet or roof. If your tenant doesn’t tell you about a leak, and the ongoing leak causes severe damage over time, you can use their security deposit to cover repairs.
6. Missing screens or doors
Window screens are thin and easily ripped. When popped out, the fragile aluminum frames are vulnerable to damage. Ripped screens are cheap and easy to replace, but tenants won’t always tell you when they break. They might just remove a broken screen, frame and all, and toss it in the trash. If you find missing screens when a tenant moves out, you can charge them for replacements.
If you make your own screens, you can still charge the tenant for your labor, as long as it’s comparable to what a contractor would charge.
The same goes for missing doors. Some tenants remove bathroom doors and closet doors to create a bigger space. If they’ve kept the doors, you can deduct the cost of having them re-installed. If they don’t have the doors, or if the doors are damaged, you can deduct the cost of new doors from their deposit.
7. Piled up trash that has to be removed
It wouldn’t be worth your time to charge a tenant for trash removal if all they leave behind are a few bags you can toss in a dumpster on your way home. However, if they leave you with enough trash to require a trip to the dump, you can charge for removal and dump fees.
8. Unapproved paint on the walls
If your tenant paints without permission, you can deduct the cost of repainting from their security deposit, unless repainting is your routine after every tenant moves out.
Always provide receipts and records
It’s not uncommon for a tenant to sue a landlord for misappropriating security deposit funds when the landlord is legally justified in keeping the deposit. Tenants sometimes don’t understand their responsibilities.
Whenever you need to withhold a portion of a tenant’s security deposit, provide them with an itemized list of deductions (unless they owe rent), copies of receipts, along with photos of the damage whenever possible. Make it clear to the tenant that the repairs were necessary, and the damage fell outside the scope of normal wear and tear. Do everything you can to prevent them from filing an unnecessary lawsuit.
When handling tenant security deposits in Texas, make sure to consult your attorney to make sure you’re following state law. If you don’t have an attorney, consider hiring a property management company like Green Residential to handle maintenance and repairs for you.