Texas Commercial Security Deposit Laws: Rules & Returns
Guide to Texas commercial security deposit regulations including no statutory cap, 60-day return deadline, permissible deductions, and tenant protections.
Legal Disclaimer
This content is for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. Laws change frequently — always verify current regulations and consult a licensed attorney in your jurisdiction for advice specific to your situation. Landager is a property management platform, not a law firm.Information last verified: May 2026.
Rooted in the foundational authority of the 1845 Texas Constitution, Texas commercial security deposit laws share some similarities with residential rules but differ in key areas — most notably a longer return deadline and greater flexibility in negotiating terms. Understanding these rules is essential for commercial landlords managing office, retail, or industrial properties.
Deposit Limits
Texas law imposes no statutory cap on commercial security deposits. The amount is entirely negotiable and typically depends on:
- The tenant's financial profile and creditworthiness
- The length of the lease term
- The type and condition of the property
- Market conditions in the area
Common commercial deposit amounts range from one to three months' rent, though larger amounts may be negotiated for higher-risk tenancies.
Return Deadline: 60 Days
The landlord must refund the security deposit not later than the 60th day after the tenant surrenders the premises and provides a written forwarding address (§93.005(a)). If any portion of the deposit is retained, the landlord must provide the balance of the deposit, if any, together with a written description and itemized list of all deductions (§93.006(c)).
Permissible Deductions
Landlords may deduct from a commercial security deposit for:
- Unpaid rent — including rent owed through the end of the lease term
- Damages beyond normal wear and tear — tenant-caused property damage
- Lease violations — charges the tenant is liable for under the lease
- Restoration costs — if the lease requires the tenant to restore the premises to original condition
Not Deductible
- Normal wear and tear — expected deterioration from ordinary use
- Pre-existing conditions — damage that was present before the tenant moved in
Tenant Protections
Priority Claim
A tenant's claim to the security deposit takes priority over the claim of any creditor of the landlord, including a trustee in bankruptcy (Property Code §93.005(b)).
Landlord Liability for Bad Faith
A landlord who in bad faith retains a security deposit in violation of the code is liable for:
- $100
- Three times the portion of the deposit wrongfully withheld
- The tenant's reasonable attorney's fees (§93.011(a))
A landlord who fails to return the deposit or provide an itemized list within 60 days is presumed to have acted in bad faith (§93.011(d)).
Prohibition on Withholding Last Month's Rent
A tenant may not withhold any portion of the last month's rent on the grounds that the security deposit covers it. A tenant who does so is presumed to act in bad faith and is liable for:
- Three times the rent wrongfully withheld
- The landlord's reasonable attorney's fees (§93.010)
Transfer of Ownership
When a commercial property is sold:
- The new owner assumes liability for the return of security deposits.
- The previous owner remains liable for the deposit until the new owner delivers to the tenant a signed statement acknowledging that the new owner has received and is responsible for the deposit and specifying the exact dollar amount of the deposit (§93.007(b)).
Best Practices for Commercial Landlords
- Negotiate deposit amounts carefully — consider the tenant's risk profile and lease obligations
- Document the property's condition — conduct a thorough pre-lease inspection with photos and video
- Use a detailed lease addendum — specify exactly what constitutes allowable deductions
- Track the 60-day deadline — mark return dates on your calendar immediately after lease termination
- Provide itemized deductions — even if not strictly required for all amounts, detailed statements reduce disputes
- Keep deposits accessible — while no separate account is required, ensure funds are available for return
How Landager Helps
Managing Texas commercial properties requires strict adherence to the Texas Property Code Chapter 93, especially regarding the 60-day security deposit return deadline. Landager automates these timelines, ensuring your deposit itemizations are delivered on time. From tracking commercial lease stipulations to generating compliant 3-day notices to vacate, Landager helps you maintain 100% compliance across your Texas commercial portfolio.
Sources & Official References
Frequently Asked Questions
▶What are the Texas landlord-tenant laws every property owner should know?
Texas rental law is governed by Property Code Chapter 92 for residential and Chapter 93 for commercial properties. Texas is one of the most landlord-friendly states — there's no rent control, no statutory cap on security deposits, and a streamlined 3-day notice eviction process. However, landlords still face strict obligations around habitability, security devices, and tenant disclosures under the Property Code.
Read the complete guide▶What is the Texas eviction process and how long does it take?
Texas eviction begins with a written Notice to Vacate — the default period is 3 days, though the lease may specify a different timeframe. After the notice expires, landlords file a forcible detainer suit in Justice Court. Under SB 38 (effective January 2026), electronic notice delivery is now permitted if agreed upon in the lease, constables must attempt service within 5 business days, and tenants have a 21-day appeal limit. The full process typically takes 3-6 weeks.
Read the complete guide▶Is there a security deposit limit in Texas?
No. Texas does not impose a statutory limit on security deposit amounts — landlords can charge whatever the market allows, though most charge one to two months' rent. Deposits must be returned within 30 days of the tenant surrendering the premises, with an itemized statement of any deductions. Since September 2021, landlords may also offer a monthly fee alternative in lieu of a traditional deposit.
Read the complete guide▶Does Texas have rent control or caps on rent increases?
No. Texas state law prohibits local governments from enacting rent control ordinances. Landlords can raise rent by any amount at the end of a lease term. During a fixed-term lease, rent cannot be increased unless the lease explicitly allows it. For month-to-month tenancies, 30 days' written notice is generally required before an increase takes effect.
Read the complete guide▶What is the grace period for late rent in Texas?
Texas mandates a 2-day grace period under Property Code §92.019 — landlords cannot charge late fees until rent has been unpaid for 2 full days after the due date. Late fees must be reasonable and stated in a written lease. For properties with 4 or fewer units, the cap is 12% of monthly rent; for larger properties, it's 10%. Late fees may include an initial charge plus a daily fee, but the total is treated as a single late fee.
Read the complete guide▶What disclosures must Texas landlords provide to tenants?
Texas landlords must disclose lead-based paint hazards (pre-1978 buildings), flood risk including 100-year floodplain status and whether the property has flooded in the past 5 years (since 2022), the identity and address of the landlord or agent, parking and towing policies for multi-unit complexes, tenant repair remedies in bold or underlined text, and early termination rights for family violence or military deployment.
Read the complete guide▶What are the Texas lease requirements for rental properties?
Texas recognizes both written and oral leases, though oral leases are only enforceable for terms of one year or less. Written leases must include late fee policies, tenant repair remedies (in bold or underlined text), security deposit terms, and landlord/agent contact information. Landlords must provide tenants with a signed copy within 3 business days of execution.
Read the complete guide▶What are Texas landlord maintenance obligations and habitability standards?
Under Property Code §92.052, Texas landlords must repair conditions that materially affect the physical health or safety of an ordinary tenant, including plumbing, electrical systems, heating and cooling, roof leaks, security devices (deadbolts, window latches), pest infestations, and mold. Tenants can use the 'repair and deduct' remedy after giving written notice and waiting 7 days, with deductions capped at one month's rent or $500, whichever is greater.
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