Dallas County saw over 37,000 eviction filings in the last year.

If you're a Dallas landlord, you never want to be part of a statistic like this. It's important to do everything you can to avoid an eviction because they're long, drawn-out processes that cause stress and anxiety for everyone.

There are ways to prevent evictions. One is to perform a thorough tenant screening on each new applicant. The other is to require security deposits at the start of each new tenancy.

In today's post, we'll explain how security deposits work, as well as the rules around collecting and withholding them. Keep reading and you'll be able to protect your property in a way that works for everyone.

What Are Security Deposits?

Security deposits are a form of insurance for landlords, protecting them against unforeseen tenant actions. Even with strong screening practices, you never know how a tenant will act until they're living in your rental. A security deposit protects you in the event they miss a rent payment or cause damage to the property.

Typically, you'll collect the security deposit at the same time you do a move-in inspection. These inspections are conducted at the start of each tenancy, where you and the tenant will make note of existing damage in the unit.

You'll perform the same inspection at the end of the tenancy. Any new damage is presumed to be caused by the outgoing tenant, the cost of which is compensated using the security deposit.

Security Deposit Laws in Texas

All states have unique security deposit laws to preserve landlord and tenant rights. In Texas, unlike many other states, there's no limit on how much a landlord can request for a security deposit.

It's important to remember that asking for too much will scare away perfectly good tenants. Keep your security deposit around the equivalent of 1-2 months' rent and you won't hurt your pool of applicants.

The only rule landlords must follow is to return the security deposit within 30 days of the end of the tenancy. That said, there are rules about withholding the security deposit, which we'll discuss next.

Withholding Security Deposits

Landlords need to have a strong understanding of the difference between damage and wear and tear. You can only withhold a tenant's damage deposit for unpaid rent or utilities, property damage, or other lease violations that cause you financial loss.

In the event you withhold some or all of a tenant's security deposit, you must give them an itemized list of the deductions with repair amounts. This is essential because the tenant could dispute your claims and take you to court.

The more thorough you are with receipts and evidence of damage, the stronger your case will be in withholding the deposit.

Property Management and Landlord Responsibilities

Security deposits are essential for protecting your real estate investment. That being said, it can be challenging to withhold a security deposit because it could lead to a greater conflict. If you want to avoid these scenarios, you should hire a property manager to help.

At Evernest, we help Dallas landlords deal with every aspect of property management. Whether you need someone to perform regular maintenance or manage your tenants, we've got you covered. Contact us today to learn more about our services.