Security deposit interest in Texas
No — Texas does not require landlords to pay interest on security deposits.
There is no interest to calculate — here is what does apply
Texas sets no interest requirement, so there is no figure to work out. The rules below are the ones that decide whether you get your deposit back in full, which is usually the larger sum anyway.
Deadline to return your deposit
30 days after the tenancy ends.
Miss it and the consequences below start to apply.
What to do next
- Give your landlord a written forwarding address. Several states make the return duty conditional on it, and Texas's rules are summarised below.
- Photograph the unit at move-out, dated, before you hand back the keys. The dispute is almost always about condition.
- If the deadline passes, put the request in writing and cite Tex. Prop. Code Sec. 92.101 to 92.109. Keep a copy of what you sent and when.
Not legal advice. This is general information, not legal advice. Security deposit laws change and vary by jurisdiction. Verify with the cited statute or consult a licensed attorney in your state before taking action.
What does Texas law actually say?
Texas does not require landlords to pay interest on residential security deposits. The statute contains no interest provision, imposes no escrow or separate account requirement, and sets no cap on the deposit amount. The landlord must refund the deposit within 30 days of the tenant surrendering the premises, and the tenant must give written notice of a forwarding address before the landlord is obliged to refund or account for it.
The landlord may deduct for damages and charges the tenant is legally liable for under the lease or as a result of breaching it, but may not deduct for normal wear and tear, meaning deterioration from the intended use without negligence, carelessness, accident or abuse. Where any deduction is made the landlord must give the tenant a written itemised description of all deductions, unless the tenant owes rent that is undisputed at the time of surrender. A landlord who in bad faith retains the deposit or fails to provide the written description forfeits the right to withhold any portion and to sue the tenant for damages.
Landlords must also give tenants advance notice of any change in ownership or management that affects the deposit.
What if your landlord does not comply?
No interest obligation, so no interest penalty. A landlord who acts in bad faith by retaining the deposit is liable for 100 dollars plus three times the portion wrongfully withheld, plus the tenant's reasonable attorney fees. Failing to return the deposit or provide the itemised written description within 30 days raises a presumption of bad faith. The landlord bears the burden of proving the retention was reasonable.