Texas Security Deposit Alternatives: Fee-in-Lieu Rules
Texas Property Code §92.111 sets out a fee-in-lieu option when a residential lease requires a security deposit. The landlord must also offer a cash deposit, give the required written notices, and obtain a signed fee agreement. Residents can end the fee arrangement and pay the applicable deposit. Review the current statute and your program documents before rollout.
What Texas law says about security deposits
- Can you require it?
- Optional only
- If you offer the fee, also offer a cash deposit. Residents can switch to the applicable deposit.
- Statutory cap
- No statutory maximum
- Return deadline
- 30 days after surrender, subject to the written forwarding-address rule
- The law
- Texas's security deposit refund law
- Property Code 92.103 and 92.107
Source baseline: . See the official Texas source. Deposit rules change, and this is general information rather than legal advice. Confirm the current text with your own counsel before you change a lease.
Can you require it of every Texas resident?
Texas Property Code §92.111 requires a deposit choice when a landlord offers a fee in lieu of a required security deposit. Give written notice of the options and charges, obtain a signed fee agreement, and let the resident end the fee arrangement at any time by paying the deposit then offered to new tenants in substantially similar housing. The fee must be equal and recurring, due with rent. If it funds insurance under subsection (e), the fee cannot exceed the reasonable cost of obtaining and administering that insurance. A fee is treated as a security deposit unless subsection (h)'s signed-agreement and insurance conditions are met.
Fee-in-lieu provision: Property Code 92.111, read on .
Fee-program claim notices
When the fee funds insurance described in §92.111(e), the landlord must give written, itemized notice of damages or unpaid rent within 30 days after the resident surrenders possession before submitting an insurer claim. A resident's challenge can require correction, withdrawal or repayment of an invalid claim.
Claim-notice provision: Property Code 92.111(j)–(k)
Rules differ by state and by city, and subsidized housing is its own question. This is general information for property managers, not legal advice. Get a written opinion before you make the fee a condition of tenancy anywhere.
How the program works in Texas
Review Beagle's deposit alternative alongside the agreement for your property. Protection, resident responsibilities and claim handling depend on the program terms and applicable state and local requirements.
Explain the options at signing
A qualifying fee arrangement lets a resident pay a monthly charge instead of providing the full cash deposit. Explain the available deposit choice, refundability and continuing resident obligations at signing. The payment’s legal treatment depends on the arrangement and jurisdiction.
Match protection to the lease
Compare the selected program’s covered losses, limit, exclusions and claim requirements with the deposit your lease would require. Payment depends on an eligible claim and the program terms; a fee does not itself guarantee the same recovery as cash security.
Document move-out and give notice
A deposit alternative changes how an eligible claim is paid. Keep move-in and move-out evidence, provide the notices required for the property's jurisdiction, and follow the program's claim process. Claim review and resident disputes can still require your team's involvement.
Agree the program economics
Confirm the resident’s charge and any property administration payment in your quote and agreement. Include permitted fees in the disclosures required for the property; earnings depend on the agreed economics and applicable law.
Security deposit rules in other states
- AlabamaReview the payment’s security function
- AlaskaReview nonrefundability and notice rules
- ArizonaReview security and fee rules
- CaliforniaReview the broad security definition
- ColoradoReview security function and fee pricing
- ConnecticutCheck upfront fees and total-rent disclosure
- DelawareOptional surety has its own rules
- FloridaOptional only
- GeorgiaReview cap scope and return duties
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- HawaiiCheck the fee rules first
- IdahoReview security purpose and custody
- IllinoisReview return rules and fee disclosures
- IndianaReview returnable security and the address
- IowaReview deposit custody and instructions
- KansasReview deposit caps and refund triggers
- KentuckyConfirm local adoption and required records
- LouisianaReview security function and statement timing
- MaineOptional licensed surety has separate notice
- MarylandOptional only
- MassachusettsConfirm authorizing rules
- MichiganReview the deposit procedure
- MinnesotaReview fee classification and disclosure
- MississippiReview the payment’s security function
- MissouriReview the security definition
- MontanaCleaning and damage fees presumed security
- NebraskaReview function and housing-agency scope
- NevadaOptional only
- New HampshireCheck the fee rules first
- New JerseyReview trust, interest and special refunds
- New MexicoReview reasonable security and mailing
- New YorkReview fee restrictions
- North CarolinaReview the bond structure
- North DakotaReview security cap and 30-day accounting
- OhioReview the security definition
- OklahomaReview escrow and the demand trigger
- OregonCheck the fee rules first
- PennsylvaniaReview escrow and fee classification
- Rhode IslandReview security function and furniture limit
- South CarolinaReview deposit standards and agreement
- South DakotaReview security function and both notices
- UtahReview nonrefundable designation and notice
- VermontReview refundable definition and local law
- VirginiaOptional only
- WashingtonOptional only
- West VirginiaReview refundable security and contractor notice
- WisconsinReview security and deduction rules
- WyomingReview disclosures and separate clocks
Texas security deposit alternative FAQs
Under §92.111, a landlord offering a fee in lieu of a required security deposit must also offer the deposit option. The resident's choice cannot be used to approve or deny an occupancy application. Written disclosures and a signed fee agreement are required, and the resident can stop paying the fee by paying the applicable deposit. This statutory framework does not establish that Beagle's agreement fits every property; check the program documents and local requirements.
See it on your Texas units
Run the selected program against your own unit count, or review its charges, onboarding and agreement terms with our team.