No. Property Code §92.108 states that “the tenant may not withhold payment of any portion of the last month’s rent on grounds that the security deposit is security for unpaid rent,” and a tenant who does so “is presumed to have acted in bad faith” and is liable “for an amount equal to three times the rent wrongfully withheld and the landlord’s reasonable attorney’s fees.” The deposit is accounted for after surrender under §§92.103–92.104; the last month’s rent is due on its due date like any other.
What to do when the tenant says “keep the deposit”
- Reply in writing, the same day, quoting §92.108 and stating that rent remains due on the usual date.
- If the rent is not paid, apply the late fee the lease allows under §92.019 (two full days after the due date) and send the notice to pay rent or vacate under §24.005 — a first-time-late tenant must receive that form of notice.
- At surrender, deduct the unpaid rent and late fees from the deposit under §92.104, itemise, and refund any balance within 30 days.
- If the deposit does not cover the rent, the excess is a claim; §92.108 adds the treble amount for bad-faith withholding.
Why the rule exists
The deposit secures performance under the lease as a whole — damage, cleaning, keys, unpaid utilities — not only rent. A tenant who converts it to rent leaves nothing for the rest, and the landlord’s only remedy would be a lawsuit. The statute pre-empts that by making the withholding itself a breach with a fixed penalty.
Where the deposit can be applied to rent
By the landlord, at surrender: unpaid rent is a charge “for which the tenant is legally liable under the lease” and is a proper deduction. And by agreement: nothing stops landlord and tenant from signing, before the last month, a written agreement applying the deposit to the final rent with a new arrangement for damage — but that is a contract, not a right the tenant can assert alone.
Frequently asked questions
Can a Texas tenant use the security deposit as last month’s rent?
No. §92.108 forbids it, presumes bad faith, and makes the tenant liable for three times the rent withheld plus attorney’s fees (Property Code §92.108).
Can the landlord apply the deposit to unpaid last-month rent?
Yes, at surrender, as an itemised deduction under §92.104, with the balance refunded within 30 days (Property Code §92.104).
What notice applies if the last month’s rent is not paid?
For a tenant who was not late before that month, a notice to pay rent or vacate under §24.005 before any eviction filing (Property Code §24.005).
Sources
Rules change and the right answer can depend on the home, the city, the lease and the timing. These are the official pages this guide relies on; check them before signing, charging a fee, sending a notice or making a legal decision.
- Texas Property Code, Chapter 92 — Residential Tenancies ↗
- Texas Property Code, Chapter 24 — Forcible entry and detainer (§§24.005, 24.0051, 24.0053, 24.0061) ↗
- Texas State Law Library — Security deposits ↗
General information for U.S. landlords, with a Texas focus. This guide is not legal, tax or accounting advice. Consult a qualified professional for your situation. Written by the rentalfreelease.com Editorial Team; last reviewed September 19, 2026.