Charging a security deposit is standard procedure with rental properties, but you must know a few things. If you're a landlord in Frisco, TX, you'll need to know Texas laws to protect your properties and legal standing.
Continue reading to learn a few vital things about security deposits.
Security Deposit Limits in Frisco, TX
A security deposit is the money a tenant pays to cover damages they cause to a property they rent. You require the deposit when the tenant moves in, and you can keep it if the tenant fails to abide by the lease or care for the unit.
The first rule of security deposits is the amount you can charge. Every state has rules about the maximum amount, but Texas is open about this rule. This means there is no maximum amount.
Instead, the rule is that landlords can charge any amount they choose. You should consider charging a fair amount, though. Otherwise, no one would be able to afford it.
A fair amount might be a security deposit equal to one or two times the rent you charge for the unit. You can also charge more if you allow pets in the unit.
Security Deposit Refund Timeline
When the tenant vacates the property, you have only 30 days to return the deposit. If you plan to keep the deposit, you also have only 30 days to give the tenant a written notice.
The 30-day period begins on the day the tenant moves out. The tenant can object to your decision about keeping the deposit by notifying you.
Rules About Deductions from Security Deposits
You can keep the security deposit when a tenant moves out if you have a legal standing. To do this, you must inspect the property to see its condition.
Document what you see when performing the inspection. You'll need this documentation if you withhold money from the security deposit.
Landlords can keep money for certain reasons as part of landlord-tenant law. You can keep money from the security deposit for:
- Unpaid rent
- Damages to the unit
- Violations to the lease
You cannot keep money for normal wear and tear. You should expect this from normal living. However, you have landlord rights, which allow you to keep money for substantial rental property damages.
When keeping money, you must provide a written reason for withholding the funds. If tenants don't agree, they can object to it and fight you in court.
Knowing and Following Security Deposit Laws Is Essential for Landlords
Security deposits give you some protection when renting your properties to others. Therefore, you must require them, but you must also follow the laws when collecting and returning the deposits.
Do you need help with this aspect of your business? PMI North Texas is a reputable company that can help.
We have over 30 years of experience helping property owners in Texas. We are a dedicated firm, and our team of experts is ready to help you with security deposit laws and other aspects of rental property management.
Reach out today to learn more.
