The matter of bad faith is most commonly discussed in terms of insurance policies on this blog. Bad faith actions, however, leak into various other aspects of Texans’ lives. This includes in the lives of landlords and tenants. For instance, the management of a rental security deposit is a common source of bad faith activity.
The relationship between landlords and tenants is generally rooted in a rental contract. If at some point it seems one party in the relationship is going against the contract’s terms, parties might need legal help to prove or disprove bad faith behind the problem.
How Can You Identify Bad Faith?
The legal definition of bad faith is, “intentional deception, dishonesty or failure to meet an obligation or duty.” Identifying bad faith, then, depends on the party we are talking about. A tenant has specific obligations related to security deposits. Landlords have their own set security deposit duties.
Landlords Have Rights to Protect Their Businesses
Landlords could go by another name: business owners. They rent and run their properties to earn a living. Laws exist to protect them from tenants whose bad faith and/or negligent actions could decrease the value of their property and threaten their livelihood.
Tenants can expect to lose some or all their security deposits if they do not act according to the terms of their lease, including the care for the property before moving out. The following are reasons why a landlord could keep security deposit funds:
- Rent and utility payments were not current.
- Lease was terminated earlier than contract defined.
- Excessive cleaning and repairs are necessary to rent out property to new tenant.
If a landlord keeps security deposit money for one or more of the above reasons, the landlord is obligated to inform the tenant in writing, generally within 30 days. If deposit funds are kept for alleged property damage and necessary cleaning, the landlord needs to note the circumstances in as much detail as possible, even through pictures.
Tenants Have Rights to Protect Their Money
Just as landlords deserve a fair shot at preserving their business, tenants have rights, too. And there are landlords in Texas who wrongfully hold onto security deposits because it seems like an easy way to pocket some extra money.
Tenants should not naively assume that a landlord will act according to the law or to the terms of their specific contract. They should understand each detail of their lease agreement, particularly the terms of their security deposit and its return to try to avoid expensive surprises.
If a landlord doesn’t return some or all of a security deposit, tenants should expect that written notice of why the money was kept. They deserve that knowledge, as well as a chance to respond.
Attorneys Can Help Identify Bad Faith
Whether you are the tenant or the landlord in a contract dispute scenario, you need help. Matters of bad faith and other business contract dilemmas are complicated. Contracts exist for a reason, usually to protect the interests of all parties involved. Let an experienced legal team help discern if and where a breach exists and aid you in moving forward with the money you deserve.