The Lone Star State boasts relatively landlord-friendly rental laws. Texas also has second largest economy in the USA, after California. (Real estate investors, can you say “Opportunity?”)
Median gross rents are in the $950 range and climbing. Rental vacancy rates have been declining since 2009. With Merck, the pharmaceutical giant taking residence in Austin and a wealth of new corporate relocations of bigwigs such as Samsung and Toyota make this big state ripe for rental income.
At a Glance:
Late Fees: Landlord’s may charge a reasonable late fee.
Security Deposit: Texas has no statutes providing limits for how much of a security deposit may be accepted.
Returned Payment Fee Limit: No more than $30
Notice to Enter: Notice is required, but the law is silent on how much. Use fairness and caution.
Late Fee/Returned Check Fee:
What about those late fees in Texas? Even though the statutes in “Sec 92.019 Late Payment of Rent; Fees’ are silent on the limit a property owner may charge for late rent, it must be fair and relevant to the costs incurred. All fees charged MUST be in the written lease. Texas requires a grace period of at least one day before a late fee may be assessed. (subject to change in the future)
**Landlord Beware: If have a late fees clause in your lease and fail to collect, a court may consider it a precedent thereby making it difficult to collect, later.
Returned Payments can be cumbersome. They also often make the rent payment late. In Texas in accordance with Business and Commerce Code Section 3.506 (b), a landlord may charge an NSF fee. However, this fee must be disclosed in the lease or somewhere prominent and can not be more than $30.
Guess what? A great way to avoid late and NSF fees would be to have the rent deducted from the payroll of your renter. Spark Rental’s rent automation service offers a program called RentDeduct™ where the rent does come right to the landlord from the renter’s paycheck. Cha-ching!
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There are no written specifications on how much a landlord may or may not charge for a security deposit. This includes pet fees, advanced rent paid, or additional fees. However, there are procedures that must be followed when returning a security deposit. Often landlords make dire mistakes regarding security deposits. Be sure to understand and follow your laws to a “T”.
For instance, the security deposit or an accounting of it must be returned to the tenant no later than 30 days from move-out. According to Section 92.104, Retention of Security Deposit, no amount may be retained for normal wear and tear. Once the accounting statement and balance or full refund is placed in the mail and postmarked before the 30 days, security deposit is presumed refunded.
Rental Property Maintenance:
Texas follows the majority law of most states, which is that the landlord has the obligation to maintain important items such as heat, electrical and plumbing. This is often referred to as the implied warranty of habitability. Texas does go one step further. And that is that they must inform the tenant, in writing, that they may repair and deduct the cost from the rent or terminate the lease without consequence. This is only under circumstances where the landlord fails or is negligent in making repairs affecting the health or safety of the renters.
Right of Entry:
Even though the law is silent on how much notice to provide a tenant before entering the rental unit, Texas courts have cited that a landlord cannot enter without permission or authorization of the tenant. With that being said, make sure that your Texas lease agreement specifically points out when the landlord may enter and how much notice.
In an emergency, or to secure a rental property, it is presumed no notice is needed.
Notice to End Lease:
In order to end a lease in Texas:
- Year to year requires one-month notice
- Month to month requires at least one-month notice, unless it is specified otherwise in the lease.
- Fixed term leases would end on the end-date in the lease agreement.
Most often, evictions are for non-payment of rent. In Texas, the notice needed is a 3-day written notice to pay or move-out. If the tenant does neither, the landlord may then go to the court and file for eviction. Check your local jurisdiction as more often, the process can be done online.
Legal Questions? Ask a Texas Landlord-Tenant Attorney
If you have any questions about a problematic tenant (or landlord, if you’re a renter) and want to speak to a real, live Texas attorney, check out Spark Rental’s Ask-An-Attorney feature. (Cost: you name your own price for your legal answers.)
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