Texas Tenant Advisor

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The Texas Tenant Advisor is intended to provide general information regarding Texas residential tenancies only.

Unique facts can render some statements inapplicable to a given situation.

We attempt to provide current information; nonetheless, you are urged to consult an attorney for legal advice and assistance.

This web site is a public service of the Texas Low Income Housing Information Service.

So, while the landlord is checking you out, you decide against renting the place. (Next time don't give the landlord any money until you are sure.) What happens to the deposit?

The law is not that specific. To get answers you should first look to any agreement you signed regarding the deposit. Of course, the Texas Apartment Association (TAA) provides a form agreement for landlords written especially for them. It specifically states that if an applicant fails to sign the lease within three days after they approve the applicant they can keep the entire application deposit. Even if there is no written agreement, landlords often consider an application deposit theirs if you later decide not to lease from them.

TIP: If you think you may change your mind, don't tell the landlord too soon. Remember, if they reject you first (or do not get back to you within 7 days), then the landlord has to return the entire application deposit. In fact, if you change your mind, you might want to make sure the landlord knows some of the worst things about you in hopes that the landlord rejects you!

Negotiate beforehand

Of course, there is always room to negotiate when you give a landlord an application deposit. Try to get a landlord to hold a place for nothing; or put in the agreement that they keep only a percentage of the deposit depending on how long they wait. (For example, if you change your mind in 24 hours they only get 25% of the deposit; after 48 hours they get 50%.)

At a minimum, see if the landlord will agree to give back your deposit in two days if they reject you. (TAA's form agreement makes the deadline for returning an application deposit 30 days after the landlord rejects you.)

Negotiate afterward

Even if you signed the agreement written by TAA all is not lost. Some landlords recognize it is unfair to keep the entire deposit if you change your mind in a day and they have not done much work to check you out, and have not turned other applicants away. Landlords never give back the application fee mind you, but sometimes they will give back part of an application deposit. So, explain why you did not like the place and see if they will be decent about it and give all or part of your deposit back

Landlords claim they can keep an entire application deposit if a tenant changes their mind because they have allegedly done a lot of work to check out the applicant and have supposedly taken the unit "off the market." But that has limits, especially when the facts don't back it up.

For example, the applicant changes their mind in an hour. Chances are that the landlord did nothing in that hour. They did not get a call from another applicant that wanted to rent that unit. How exactly has the landlord been harmed? It hasn't. So, sometimes it is just unfair for a landlord to keep an application deposit even when the tenant changes their mind.

Continue on to application deposit kept unfairly.