Texas Rental Application Fees and Deposits: Refund Rules

In Texas, a rental application fee and an application deposit are different payments. Rejection normally makes an application deposit refundable, while a screening fee is defined as nonrefundable. But that does not mean a landlord can always keep the fee: failing to make the required tenant selection notice available changes the refund obligation when an applicant is rejected.

Texas also has a rule for applications left unanswered. A landlord who collects money and then stops responding cannot assume the application remains pending indefinitely. This guide explains the residential application rules in Texas Property Code, Chapter 92, Subchapter I. It is general information, not advice on a particular payment dispute.

Identify which payment you collected

Section 92.351 defines an application fee as money paid to offset the cost of screening a prospective tenant. An application deposit is money given in connection with the application that is refundable if the applicant is rejected. The distinction matters even when both charges appear in one checkout total.

• Application fee: pays toward the screening process, subject to the statutory refund exception.
• Application deposit: must be assessed separately when the applicant is rejected.
• Security deposit: secures performance under an entered lease and has a different statutory framework.

Describe each payment before collecting it and issue an itemized receipt. A vague label such as administration charge does not, by itself, answer what the money was for or whether it can be retained. Review the actual agreement and the payment's function rather than treating every charge as a nonrefundable screening fee.

Make the selection criteria available with the application

Under Section 92.3515, the landlord must make a printed notice of tenant selection criteria and grounds for denial available when providing the rental application. The statute identifies factors including income, credit history, rental history, criminal history, and inaccurate or incomplete application information. Listing a factor here does not authorize a screening policy that violates other applicable laws.

The applicant signs an acknowledgment that the notice was made available. The statute specifies the substance of that acknowledgment and allows it within the application when the notice is underlined or bold. Without a signed acknowledgment, there is a rebuttable presumption that the notice was not made available.

This is more than a generic statement that approval is required. Give applicants a genuine opportunity to review the criteria, retain the version supplied and confirm that your application provider includes the necessary acknowledgment. A payment receipt does not replace that step.

If the landlord rejects an applicant without having made the required notice available, Section 92.3515(e) requires returning both the application fee and any application deposit. Calling the fee nonrefundable in your own paperwork does not remove that obligation.

What happens if there is no answer after seven days?

Section 92.352 treats an applicant as rejected if the landlord does not give notice of acceptance by the seventh day after the applicant submits a completed application on the landlord's form. If the landlord provides no application form, the alternative starting point is the date the landlord accepts an application deposit. Rejection of one co-applicant counts as rejection of all co-applicants.

Track the completed-application date, not simply the first enquiry or first uploaded document. If information is missing, identify it promptly and keep a record. Do not use repeated vague requests to leave a completed application in an indefinite pending state.

Section 92.353 includes notice procedures and a weekend or holiday extension for the required date. It describes presumptions for telephone notice and notices sent through US mail. Do not assume an internal approval in your software, without communication to the applicant, settles the issue. Check the statutory procedure and your records when the timing is disputed.

Rejection does not make every fee refundable

The seven-day rule and the selection-notice rule answer different questions. The first can establish that the applicant has been rejected. The second determines when a rejected applicant is owed the application fee as well as the application deposit because the required notice was not made available.

For example, suppose an applicant pays a separately described screening fee and application deposit, submits a completed application and receives no timely acceptance. The deposit needs to be addressed as refundable on rejection. Whether the fee must also be returned requires checking the selection notice, the application terms and any other applicable grounds. Do not answer only by pointing to a nonrefundable label.

A renter withdrawing after acceptance presents a different issue from a landlord rejecting an application. Review the timing and agreement before deciding what happens to that payment. Likewise, do not automatically apply the rules for a security deposit after move-out to money paid with an unsuccessful application.

Resolve a disputed charge with a clear record

When an applicant asks for a refund, assemble the receipt, payment descriptions, application, selection notice and acknowledgment, completion date and acceptance or rejection communications. For a duplicate charge, compare transaction records before referring the applicant between your office and the payment provider. Name one person responsible for following the issue through.

Explain which payment you are returning or retaining and the specific basis. The statute includes mailing provisions for requested refunds and imposes liability for bad-faith failures to refund in violation of the subchapter. Section 92.355 also makes attempted waivers of its rights or duties void. Get Texas legal advice when the facts or classification remain disputed rather than relying on a standard no-refunds response.

The primary source is the Texas Legislature's Property Code, Sections 92.351 through 92.355. For explaining all expected rental costs before an application, see our rental-fee communication guide.

Separate initial enquiries from the paid application

Before inviting someone to pay for screening, explain the advertised rent, availability and application process. RentForms can help collect initial answers before a viewing, so you can clarify basic questions early. It does not run credit checks, collect screening fees or supply the statutory Texas acknowledgment. Keep the formal application and its required notices as a separate, properly reviewed step.