If you’ve ever leased an apartment or other residential structure, you’ve probably encountered the various fees and deposits that are often required just to secure the apartment. But have you ever looked into the fine print of what these deposits are? There are a lot of misunderstandings and misconceptions surrounding these deposits, particularly the security deposits. In our dedication to not only helping you find your perfect apartment, we are also working to provide you with vital information that every tenant should know for a smooth experience.
Application Fees and Application Deposits
Paying an application fee is fairly standard practice at apartment complexes, but the fee amount differs depending on where you go. The Texas Property Code defines an application fee as a “nonrefundable sum of money that is given to the landlord to offset the costs of screening an applicant for acceptance as a tenant”. This is due to many apartment complexes requiring checks such as a criminal history check and/or a credit history check, both of which cost the landlord money.
Although less common, there is also an application deposit. These are more likely to be found at apartment complexes that have far more applicants than units available. Not to be confused with the application fee, this deposit is refundable if the prospective tenant’s application is rejected. The application deposit is not the same thing as the security deposit.
Know the Law: Security Deposit Refunds
Nearly all landlords, including apartment complexes and property management companies, require a security deposit when signing a lease. The purpose of the security deposit is to protect the landlord from negligent treatment to the property resulting in monetary losses to repair. Like many other fees, the required amount for the security deposit differs from place to place. However, tenants are given a refund on the security deposit at the end of their lease according to certain criteria.
You’ve probably heard the stories of tenants that move out and claim that they were scammed out of their security deposit. While this has happened, legitimate cases of landlords illegally withholding security deposit refunds are not very common. However, you should still know your rights and the law as a tenant, and the Texas Property Code is a good place to start. When you move out of an apartment, it is your right to request in writing the reason you did not receive the refund. According to the Texas Property Code, a “landlord shall refund a security deposit to the tenant on or before the 30th day after the date the tenant surrenders the premises”.
By requesting an itemized list for deductions (more on this below) from the security deposit, you are holding the landlord accountable according to the law. However, even if the landlord provides an itemized list, it must still meet certain criteria in order to be legal, which leads us to what landlords are able to deduct.
Read the Lease: Deductions from Security Deposits
When it comes to deductions from your security deposit for damage or losses, here is the most important thing to remember: normal wear and tear does not qualify as damages that can be withheld in a security deposit. The Texas Property Code further defines this:
“Normal wear and tear” means deterioration that results from the intended use of a dwelling, including, for the purposes of Subchapters B and D, breakage or malfunction due to age or deteriorated condition, but the term does not include deterioration that results from negligence, carelessness, accident, or abuse of the premises, equipment, or chattels by the tenant, by a member of the tenant’s household, or by a guest or invitee of the tenant.
So certain deterioration like fading paint on the wall, loose carpets, etc., do not quality as damages beyond normal wear and tear, thus a landlord cannot itemize that. The primary reason that we stress reading the fine print of your lease agreement is because that contractual document will inform you about the type of damages that you will be liable for. It is also important to note that a security deposit may be withheld if you violate your lease agreement. As always: read the fine print!
What To Do with a Bad Faith Landlord
So, you’ve moved out and you know for a fact that you left the apartment in good condition. Unfortunately, your landlord is still withholding your security deposit in bad faith. So, there’s nothing that you can do, right?
If the amount of money involved is less than $20,000, this would qualify for small claims court. However, before you ever proceed to this step, there are other boxes to check off which include being absolutely sure the landlord is acting in bad faith. If the landlord is acting in bad faith and refuses to provide an itemized list or the security deposit within 30 days, it is your right as a tenant to sue. The Texas Property Code permits a tenant to be able to recover three times the amount of the security deposit, assuming that you can prove that it was withheld in bad faith. It is recommended to first send a refund demand letter to the landlord and to document all of your interactions. While you could sue and take the case to court, it might be easier to try all other steps first.
Know Your Rights as a Tenant
It is so important to know your legal rights as a tenant in the State of Texas, and that starts with reading over your lease agreement carefully. Never let anyone hurry you through the contract. It is well within your rights to read the contract over and ask questions before you ever sign your name anywhere. If you are unsure about whether something is legal or not, you can always consult the Texas Property Code.