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Texas · Property Code chapter 92Texas tenant security deposits when a rental property is sold

In Texas, a sale doesn't make tenants' security deposits disappear. Under Property Code §92.105, when an owner's interest ends – by sale, assignment, death, receivership, bankruptcy or otherwise – the new owner is liable for returning security deposits under the security deposit rules from the date it acquires title. The new owner must give each tenant a signed statement acknowledging that it has acquired the property and is responsible for the tenant's security deposit, stating the exact dollar amount. The former owner remains liable for deposits it received until the new owner has received them or assumed the liability, unless the parties' written contract says otherwise. A mortgage lender that takes title by foreclosure is excluded from the new-owner rule. Afterwards, the buyer is the landlord for chapter 92: it must keep accurate deposit records (§92.106); refund a deposit within 30 days after the tenant surrenders the premises (§92.103), less damages and charges the tenant is legally liable for but never normal wear and tear, with a written itemized list of deductions (§92.104); and a landlord who keeps a deposit in bad faith can owe $100, three times the amount wrongfully withheld and the tenant's attorney's fees (§92.109).

On the sale (§92.105)

  1. 1. New owner liable

    From the date it acquires title.

  2. 2. Signed statement

    To each tenant: the new owner holds the deposit, with the exact dollar amount.

  3. 3. Seller stays liable

    Until the buyer receives or assumes the deposits – unless a written contract says otherwise.

  4. 4. Foreclosure

    A mortgage lender taking title by foreclosure is excluded.

What the new owner takes on

  • Accurate records of all security deposits (§92.106).
  • Refund within 30 days of move-out, less lawful deductions – never normal wear and tear (§§92.103, 92.104).
  • A written, itemized list of deductions.
  • Bad faith: $100 plus three times the amount withheld and attorney's fees (§92.109).

What the TC can do

  • Ask the seller early for every lease and a deposit list per tenant.
  • Make sure the contract and the settlement statement show how deposits are credited or transferred to the buyer.
  • Remind the buyer to send each tenant the signed statement after closing.

Questions buyers and sellers ask

Who returns the security deposit after a Texas rental is sold?

The new owner, from the date it acquires title (Texas Property Code §92.105(a)).

Is the seller off the hook for deposits after closing?

Not automatically. The former owner stays liable for deposits it received until the new owner receives them or assumes the liability, unless a written contract says otherwise.

What notice does the new owner give tenants?

A signed statement acknowledging that it acquired the property and is responsible for the tenant's security deposit, with the exact dollar amount.

Related guides and tools

Add the leases and the deposit list as documents on the deal in ClosingCode, so the transfer is tracked until closing.

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Source: Texas Property Code §§92.103–92.106 and 92.109 (statutes.capitol.texas.gov, read October 26, 2026).

General information, not legal advice. ClosingCode is software; it is not a law firm or title company. This guide is not a substitute for the advice or services of an attorney.