Landlord Wrongfully Withheld Tenant’s Security Deposit

What Happened: For five years, a tenant leased space in Houston for use as a bar. After the lease ended, the tenant asked the landlord to return its $11,400 security deposit. When the landlord didn’t respond, it filed a lawsuit. The landlord countersued, claiming that the tenant did roughly $100K worth of damage to the premises. The trial court sided with the tenant, and the landlord appealed.

Decision: The Texas appeals court upheld the lower court’s ruling.

Reasoning: The landlord violated two of the lease’s security deposit provisions, the court said, including the requirement that it provide the tenant:

• An accounting for security deposit deductions within 60 days; and
• An itemized list of each deduction.

The landlord didn’t say anything to the tenant about withholding the security deposit until the lawsuit began—eight months after the tenant had vacated and well past the 60-day deadline. And it never provided an itemization of deductions. All it did was assert it spent $25K, and later an additional $73K, on repairs. Compounding the problems was the landlord’s failure to distinguish between costs for alleged repairs for damages and costs for renovations to upgrade the property.  

• Yarborough v. Vitrola Bar, Inc.: 2019 Tex. App. LEXIS 9088, 2019 WL 5157144