Quiz Explanations
Test Your Knowledge of Texas Statutory Laws
By Judon Fambrough
October 1997

1. False. Texas has no statutory guidelines dictating the maximum amount of the security deposit. It is strictly negotiable.

2. False. Texas Property Code, Section 92.104 allows the landlord to deduct from the security deposit damages and all charges resulting from the breach of the lease. In all probability, the damages and charges (reletting fees, lost rent, etc.) will exceed the security deposit. But there is no automatic forfeiture. Effective September 1, 1997, landlords must attempt to mitigate damages from loss of future rent.

3. False. Effective September 1, 1997, the maximum that can be deducted is the greater of $500 or one month’s rent.

4. True. Chapter 54 of the Texas Property Code permits landlord’s liens. Section 91.004 of the Texas Property Code grants tenants limited liens against the landlord’s property.

5. True. After giving a written three- or seven-day notice to the landlord to comply, tenants may unilaterally terminate the lease according to Section 92.165 of the Texas Property Code, if the tenant was not delinquent in rent payments when the notice was given.

6. False. Late payments on a loan constitute interest. Late payments on a lease are not a charge against the detention of funds, hence not interest. (Southwest Park Outpatient Surgery, Ltd. V. Chandler Leasing Div., 572 S.W. 2d 53 [1978]).

7. False. The tenant remains personally liable for all damages exceeding the amount of the security deposit.

8. False. The landlord’s insurance policy can cover only the landlord’s interest in the premises. Tenants must obtain their own policy to cover personal property.

9. True. Following on the heels of the Texas Supreme Court decision requiring the mitigation of rent in commercial leases (Austin Hill County Realty, Inc. v. Palisades Plaza, Inc., 40 Tex. S. Ct. J., January 10, 1997), the 75^th Texas Legislature required mitigation of rent with residential leases effective September 1, 1997.

10. False. Residential landlords may change locks, but they can not withhold a new key until the tenant pays delinquent rent (Texas Property Code, Section 92.0081 [f]).