Who is responsible for the security deposit when a Texas rental is sold?

Under Texas Property Code Section 92.105, the new owner is liable for returning the tenant's security deposit from the date title is acquired and must give the tenant a signed statement with the exact deposit amount. The former owner remains liable until the new owner has received the deposit or assumed the liability, unless a written contract says otherwise.

Buying Occupied Rental Property in Texas

The lease comes with the house

A sale does not end a residential lease. You take the home subject to the existing lease terms, so read every lease before your option period ends: rent, term, renewal terms, who pays which utilities, pets, and any promises the seller made.

Security deposits

Under Texas Property Code §92.105, the new owner is liable for returning tenants’ security deposits from the date title is acquired, and must give each tenant a signed statement acknowledging the purchase, responsibility for the deposit and its exact amount. Make sure deposits are credited to you at closing.

Estoppels

A tenant estoppel letter has the resident confirm the rent, deposit, lease dates and any side agreements. It catches differences between the rent roll and reality before you close.

Access and inspections

Inspections of occupied homes happen on the tenant’s lease terms and with proper notice. Build extra time into the option period when several homes are occupied.

After closing

Notify tenants of the new owner and where to pay rent, transfer utilities the owner pays, update insurance to a landlord policy, and set up management before the first rent date.

Written by Michael O’Neal, Broker · REALTOR®, Texas license #624124 (TREC record), who owns rental property in Greater Houston. General information, not tax, legal or lending advice. Reviewed Oct. 26, 2026.