Lease agreement/Security Deposit

[Rex Sundberg]

We are located in Texas

We rented out our property through Zillow and tenants chose to sign the lease a month ago for the start date of July 1, 2025 and by choice without physically touring the property/town.  They paid the security deposit upon signing the lease agreement and we of course immediately took it off the market.  Today, the tenant, age 45, notifies me that after looking at the area more closely they discovered there are sex offenders living nearby and it has made her feel very uneasy and that the property might not be the right fit and is asking for the security deposit back. 

Please advise as to how you would handle this and the security deposit

[Drew Sygit]

Two big mistakes:

1) Taking your property off the market 2 months ealy for a tenant 

2) Not taking a nonrefundable Holding Fee to reserve the property

Inform the tenant that they are breaking a contract and they should have done this research already.

Furthermore, you will hold their SD to potentially liquidate for unpaid rent, until you can find a replacement tenant - at which point you will refund a prorated amount of whatever is left over.

They will threaten to sue, to which you can reply that you can also sue to force  their performance of the lease contract.

Recommend you get all this all in writing as they could play a game and claim they want occupancy if you find a replacement tenant - then sue you if you already rented to someone else.