A Lump of Coal Instead of Your Rental’s Security Deposit? | iStock-1126442754

A Lump of Coal Instead of Your Rental’s Security Deposit?

Santa Claus lore has it that if you’ve been naughty, all you’ll get is a lump of coal in your stocking.

For both landlords and tenants, this cuts both ways. A residential landlord can deny the return of a tenant’s security deposit if the tenant was “naughty,” as we outline below in this blog post. On the other hand, the landlord can only keep the deposit if there’s sufficient legal justification. Otherwise, keeping the deposit will put the landlord on the naughty list, rather than the tenant.

Let’s look at both scenarios below.  

How Tenants Get on the Naughty List (and Lose Security Deposits)

The first place to look is the residential lease agreement. These contracts often list specific prohibitions. The tenant’s violation of these prohibitions (“breach”) may allow the landlord to keep some or all of the security deposit.

In addition to specific prohibitions or constraints, leases often include general language that “covers” the landlord’s right to keep the security deposit, although general language must be interpreted in light of the facts.

Here are common ways tenants get on the naughty list and lose their security deposits:

  • Unpaid rent
  • Damaged property beyond “ordinary wear and tear” (a legal term that itself must often be interpreted in light of the facts)
  • Keeping a dog, cat, or another animal if prohibited in the lease
  • Not cleaning up and/or leaving items behind when you move out
  • Not giving the landlord sufficient notice of move-out as specified in the lease

Even though few cases are black and white, insufficient notice (for example) is one of the clearest justifications for landlords to keep security deposits. Landlords of residential properties are motivated to keep their units occupied with paying tenants. They need enough time to market units to prospective tenants. When tenants move out abruptly, it can put landlords in a difficult situation from a financial perspective. 

The moral of the story: Pay close attention to what the lease says.

How Landlords Get on the Naughty List (by Keeping Security Deposits)

We’re back again to looking at the lease. In Texas, landlords generally have wide latitude in their decision to keep tenants’ security deposits—but this decision should be made for a good reason, based on the language as written in the lease.

Landlords typically get on the naughty list (when it comes to keeping security deposits) because they don’t have sufficient legal justification, so any decision to keep the security deposit should be backed up with evidence (photos of property damage, for example) in addition to what the lease says.

Here’s one “gotcha” moment for landlords: To expand on the example above on the notice period for moving out, a tenant could argue that the language of the lease is ambiguous or unclear. Examples include:

  • Buried fine print
  • The lack of a call-out or attention-grabbing language (no bolding, italics, or underlining),
  • Contradictory language
  • No notice provision in the lease at all

Any of these can be grounds for the tenant’s right to get the deposit back, despite the fact that the tenant did not give advance notice.

Call The Fell Law Firm for Legal Guidance

The holidays are no time to parse the finer points of lease provisions. Leave that to us. We represent both landlords and tenants in the full range of legal matters related to commercial and residential property, including security deposits.

For a free consultation, call us at 972-450-1418or send us an email.  

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