Tex. Prop. Code Ann. §§ 92.001–92.355 § 92.1031
CONDITIONS FOR RETENTION OF SECURITY DEPOSIT OR RENT PREPAYMENT.
Operative Text
Sec. 92.1031. CONDITIONS FOR RETENTION OF SECURITY DEPOSIT OR RENT PREPAYMENT. (a) Except as provided in Subsection (b), a landlord who receives a security deposit or rent prepayment for a dwelling from a tenant who fails to occupy the dwelling according to a lease between the landlord and the tenant may not retain the security deposit or rent prepayment if:(1) the tenant secures a replacement tenant satisfactory to the landlord and the replacement tenant occupies the dwelling on or before the commencement date of the lease; or(2) the landlord secures a replacement tenant satisfactory to the landlord and the replacement tenant occupies the dwelling on or before the commencement date of the lease.(b) If the landlord secures the replacement tenant, the landlord may retain and deduct from the security deposit or rent prepayment either:(1) a sum agreed to in the lease as a lease cancellation fee; or(2) actual expenses incurred by the landlord in securing the replacement, including a reasonable amount for the time of the landlord in securing the replacement tenant. Added by Acts 1995, 74th Leg., ch. 869, Sec. 13, eff. Jan. 1, 1996.
Under Texas Property Code § 92.1031, a landlord generally cannot keep a security deposit or rent prepayment from a tenant who never moves in, provided a suitable replacement tenant is found and occupies the unit by the original lease start date. It does not matter whether the tenant or the landlord finds that replacement — if the replacement is in place on time, the deposit must be returned. However, if the landlord is the one who locates the replacement, the law permits the landlord to deduct either a pre-agreed lease cancellation fee or the actual, reasonable costs incurred in finding that replacement.
Plain English — not legal advice.
Property owners and managers operating under Texas Property Code § 92.1031 generally document any costs incurred when a prospective tenant fails to take occupancy, including time spent advertising and screening replacement applicants. When a replacement tenant satisfactory to the landlord occupies the unit by the original lease commencement date, operators typically return the deposit minus only what the lease expressly designates as a cancellation fee or the documented actual expenses of re-leasing. Maintaining clear written records of replacement-search costs and any cancellation fee language in the lease supports a defensible accounting of any deductions made.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under Texas Property Code § 92.1031, tenants who are unable to take occupancy of a dwelling they have leased may have a right to recover their security deposit or rent prepayment if a suitable replacement tenant moves in by the original lease start date. Whether the tenant or the landlord finds that replacement can affect what, if anything, the landlord is permitted to deduct — so keeping records of any replacement-tenant referrals or communications is generally useful. Tenants who believe a deposit was wrongfully withheld can explore options such as sending a written demand, contacting a local tenant-rights organization, or consulting an attorney familiar with Texas residential landlord-tenant law.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 28, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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