Security deposit in Texas

5 Replies

Originally posted by @Eric Wehrman :
I have a tenant that has bad credit is it legal to require additional security deposit in Texas

I am not an attorney, but yes I am fairly certain it is.  We have requested a couple of times extra security deposits from tenants with low credit scores.

Honest question, why not pass on the tenant?  And wait for someone with a better credit score?

I find that lower credit scores aren't worth it.  Might get a few dollars up front, but in the long run its just not worth it, lower credit scores are highly related to good tenants.

We have learned thru the years its best to have a few months of vacancies over taking the first person with a pulse.

Hi Eric! I definitely would take a look at the landlord-tenant laws for your state as well as your locality. If you just do a quick Google search of "Texas landlord-tenant laws" plenty of resources should appear! I can also PM you some resources if you'd like, just reach out. Best of luck! 

There is no issue with this at all in Texas. A security deposit is negotiable except if you were charged different deposits based on a protected class. Bad credit is not a protected class

You can do it but would be a fool to accept any applicant with a credit score below your set screening standard minimum. OH...…... you don't have a set screening standard.

You need to tighten up your standards now before it's too late. Reject this applicant. 

In Texas you can set the security deposit at any amount that is agreed to between the parties.  Also, you can require that the Tenant pay up front the First Month's Rent and the Last Month's Rent (or the Last Two Month's Rent).  Out of an abundance of caution, I recommend that you make sure that you have a reasonable basis for requiring a higher than normal security deposit or extra month's rent as security (i.e., proposed tenant is a high credit risk).