Property Management Laws And Regulations In Texas

Texas regulates third-party property management through several authorities at once, and the rules that matter most to a management company are the ones covering your license, your client trust accounts, and the money you hold on behalf of owners and tenants. This guide covers those rules for professional managers, with the statute or agency regulation behind each one.

Everything below is sourced to Texas's own statutes, agency rules, and court materials rather than to secondhand summaries. Specific dollar amounts and deadlines do change; the citations do not, so you can always open the authority and confirm the current text before you act on it.

Licensing Requirements For Property Managers

Managing and leasing property for others for compensation in Texas is brokerage activity under the Real Estate License Act, regulated by the Texas Real Estate Commission (TREC). Even controlling the acceptance or deposit of rent from a single-family resident triggers the broker definition. Key exemptions cover owners and their employees leasing the owner's own property, on-site apartment complex managers, and hotel or motel management. License holders renew every two years with 18 hours of CE.

• A broker includes a person who, for compensation, leases real estate, negotiates or attempts to negotiate a lease, lists real estate for lease, procures prospects to effect a lease, or controls the acceptance or deposit of rent from a resident of a single-family residential unit. (Tex. Occ. Code § 1101.002(1)(A))
• TREC's official guidance: a property manager needs a broker license (or must be a sales agent sponsored by a broker) if they lease or rent property for others for compensation, including showing units, negotiating leases, or collecting rent. (TREC FAQ, property manager licensing)
• The License Act does not apply to an on-site manager of an apartment complex, or to an owner or the owner's employee who leases the owner's own improved or unimproved real estate; the lease or management of a hotel or motel is also excluded. (Tex. Occ. Code § 1101.005(7), (8), (9)(C))
• Per TREC, the on-site manager exemption applies only to apartment complexes; managers of condominiums or townhomes need a license, and employees of the property owner can lease without a license only if a true employer-employee relationship exists (Rule 535.34). (TREC FAQ; 22 Tex. Admin. Code § 535.34)
• Broker renewal requires 18 hours of continuing education every two years: 4 hours Legal Update I, 4 hours Legal Update II, 3 hours contract-related, and 7 elective hours; brokers who sponsor sales agents or delegate supervision must include the 6-hour Broker Responsibility Course. (TREC broker renewal requirements; 22 Tex. Admin. Code § 535.92)

Client Trust Account Rules

TREC Rule 535.146 governs trust money, which expressly includes rent and security deposits held on behalf of others. Trust money must be deposited into a properly designated trust account or delivered to an authorized escrow agent by the close of business of the second working day, commingling with operating funds is prohibited, property management accounts require monthly accounting when there is activity, and records of every deposit and withdrawal must be kept for four years.

• Trust money includes client's money, earnest money, rent, unearned fees, security deposits, and any money held on behalf of another person. (22 Tex. Admin. Code § 535.146(a))
• Unless the principals agree otherwise in writing, trust money received by a broker must be deposited in a trust account or delivered to an authorized escrow agent within a reasonable time, which TREC has determined to be not later than the close of business of the second working day after receipt. (22 Tex. Admin. Code § 535.146(b)(3))
• Paying an operating expense or making any withdrawal from a trust account for a purpose other than proper disbursement of trust money is prima facie evidence of commingling. (22 Tex. Admin. Code § 535.146(b)(5))
• A broker holding trust money must maintain a clearly identified trust or escrow account and remains personally responsible and accountable for the account and for proper handling of all trust money received. (22 Tex. Admin. Code §§ 535.2(c), 535.146(c))
• If trust money held for a property management account has any activity, the broker must provide an accounting to each beneficiary at least monthly, and documentary records of each deposit or withdrawal must be retained for four years. (22 Tex. Admin. Code § 535.146(c)(6), (e))
• Failing to properly account for or remit money received on behalf of another within a reasonable time, or commingling it, is grounds for license suspension or revocation under the Real Estate License Act. (Tex. Occ. Code § 1101.652(b))

Trust account rules are where Texas management companies get into trouble fastest, because a shortage is a licensing problem and not just a bookkeeping problem. The Texas Real Estate Commission can act on a shortage even when it is later repaid, which is why firms put trust compliance support in place before a gap appears rather than after. The habits that keep you clean are the boring ones: deposit on time, never let operating money and client money mix, reconcile every account every month, and keep a per, property record you could hand to an auditor without preparing it first. Our guide to preparing for a trust account audit walks through what examiners actually ask for.

Security Deposit Rules

Texas sets no cap on residential security deposits and does not require them to be held in a separate or interest-bearing account, though deposits held by a licensed property manager are trust money under TREC rules. The deadline to refund and account is 30 days after surrender, subject to the tenant providing a forwarding address, and bad faith retention costs the landlord $100 plus three times the amount wrongfully withheld plus attorney fees.

• Property Code Chapter 92, Subchapter C applies to all residential leases and contains no cap on the amount of a security deposit and no requirement that deposits be held in a separate or interest-bearing account. (Tex. Prop. Code §§ 92.101-92.110)
• The landlord must refund the security deposit on or before the 30th day after the tenant surrenders the premises. (Tex. Prop. Code § 92.103(a))
• The refund and itemization obligations are not triggered until the tenant gives a written forwarding address, but the tenant does not forfeit the deposit merely by failing to provide one. (Tex. Prop. Code § 92.107)
• If any portion is retained, the landlord must give a written description and itemized list of all deductions; nothing may be withheld for normal wear and tear, and no itemization is required only if the tenant owes rent and the amount owed is undisputed. (Tex. Prop. Code § 92.104)
• A landlord who in bad faith retains a deposit is liable for $100 plus three times the portion wrongfully withheld plus the tenant's reasonable attorney fees, and a landlord who fails to refund or itemize within 30 days is presumed to have acted in bad faith. (Tex. Prop. Code § 92.109)
• A refund or accounting is presumed timely if placed in the US mail and postmarked on or before the required date. (Tex. Prop. Code § 92.1041)

Lease Agreements And Required Disclosures

Texas leases are governed mainly by Property Code Chapter 92. Landlords must deliver a copy of the signed lease within three business days, disclose ownership and management information on request within seven days, and put any late fee in the written lease. Chapter 92 rights generally cannot be waived, and from 2026 eviction notices may be delivered electronically when the lease provides for it.

• The landlord must provide at least one complete copy of the signed lease to a tenant not later than the third business day after signing, and to additional tenants within three business days of a written request. (Tex. Prop. Code § 92.024)
• On a tenant's request, the landlord must disclose the record title holder's name and address, and the name and street address of any off-site management company, within seven days, in writing, by posting, or via the lease. (Tex. Prop. Code § 92.201)
• Willfully disclosing incorrect ownership or management information, or failing to correct information the landlord knows is wrong, is a bad faith violation with statutory remedies. (Tex. Prop. Code § 92.204)
• A late fee may not be collected unless notice of the fee is included in the written lease, and any lease provision purporting to waive the late-fee statute's rights or duties is void. (Tex. Prop. Code § 92.019(a), (d))
• Notices to vacate may be delivered by mail, by delivery inside the premises in a conspicuous place, by hand delivery to a tenant 16 or older, or, if the parties agreed in writing, by electronic communication including email (effective January 1, 2026). (Tex. Prop. Code § 24.005(f-3))

Entry Notice And Tenant Privacy

Texas has no statewide statute requiring advance notice before a landlord enters an occupied unit; entry rights and notice periods are set by the lease, so management agreements and leases should spell them out. What the Property Code does regulate strictly is exclusion: lockouts and removal of doors, locks, or appliances are tightly restricted.

• Property Code Chapter 92 contains no general provision setting a minimum advance-notice period for landlord entry; entry rights for residential rentals are governed by the lease terms the parties agree to. (Tex. Prop. Code ch. 92 (absence of entry-notice provision))
• A landlord may not remove doors, windows, locks, doorknobs, or landlord-furnished furniture, fixtures, or appliances from leased premises except for bona fide repair or replacement, which must be performed promptly. (Tex. Prop. Code § 92.0081(a))
• A landlord may not intentionally exclude a tenant from the premises except by judicial process, bona fide repairs or emergency, removing contents of abandoned premises, or a rent-delinquency lock change; after a lock change the landlord must post notice telling the tenant how to get the new key 24 hours a day regardless of payment. (Tex. Prop. Code § 92.0081(b)-(c))

Rent, Late Fees, And Other Charges

Texas effectively bans rent control: a city may adopt it only after finding a disaster-caused housing emergency and obtaining the governor's approval, and cities and counties are barred from forcing landlords to accept federal housing vouchers. Late fees are regulated statewide with a two-full-day grace period, a reasonableness requirement, and safe-harbor percentages.

• A municipality may establish rent control by ordinance only if its governing body finds a housing emergency exists due to a disaster and the governor approves the ordinance. (Tex. Loc. Gov't Code § 214.902)
• Municipalities and counties may not adopt ordinances requiring landlords to accept tenants whose source of income includes federal housing assistance (vouchers), except for protections tied to military veterans and voluntary incentive programs. (Tex. Loc. Gov't Code § 250.007)
• A late fee may be charged only if it is in the written lease, is reasonable, and rent has remained unpaid two full days after the due date; a fee is deemed reasonable if it does not exceed 12 percent of monthly rent for structures with four or fewer units, or 10 percent for larger properties. (Tex. Prop. Code § 92.019(a), (a-1))
• A landlord who violates the late-fee statute owes the tenant $100 plus three times the improperly collected late fee plus reasonable attorney fees; a late fee may combine an initial fee and daily fees, treated together as a single fee. (Tex. Prop. Code § 92.019(b)-(c))

Fee income is also taxable income, and how you record management fees, late fees, and pass, through charges affects both your compliance position and your books. See our guide to Texas property management tax deductions for the reporting side.

Fair Housing Obligations

The Texas Workforce Commission Civil Rights Division enforces fair housing in Texas. The state's protected classes track the federal seven (race, color, national origin, religion, sex, familial status, disability), with no statewide additions; local voucher acceptance mandates are preempted. Complaints must be filed within one year.

• The Texas Workforce Commission Civil Rights Division receives, investigates, and enforces housing discrimination complaints in Texas. (Texas Fair Housing Act (Tex. Prop. Code ch. 301); TWC Civil Rights Division)
• Protected classes are race, color, national origin, religion, sex, familial status, and disability, the same as federal law; Texas adds no statewide protected classes. (Tex. Prop. Code ch. 301; TWC housing discrimination guidance)
• A housing discrimination complaint must be submitted within one year from the date of the alleged discrimination, and cannot be filed simultaneously with both TWC and HUD. (TWC housing discrimination complaint process)
• Cities may adopt fair housing ordinances substantially equivalent to federal law, and ordinances existing on January 1, 1991 that are more restrictive than federal law remain in effect; source-of-income (voucher) mandates, however, are preempted statewide. (Tex. Loc. Gov't Code §§ 214.903, 250.007)

Habitability And Safety Duties

Texas landlords must make a diligent effort to repair conditions that materially affect the physical health or safety of an ordinary tenant, if the tenant is current on rent and gave notice to the place where rent is paid. Tenant remedies hinge on proper notice mechanics, and retaliation within six months of a protected tenant action is prohibited.

• A landlord shall make a diligent effort to repair or remedy a condition if the tenant gives notice to the person or place where rent is normally paid, the tenant is not delinquent in rent when notice is given, and the condition materially affects the physical health or safety of an ordinary tenant or involves failure to supply hot water of at least 120 degrees Fahrenheit. (Tex. Prop. Code § 92.052(a))
• The landlord has no duty to repair conditions caused by the tenant, lawful occupants, family members, or guests, unless caused by normal wear and tear. (Tex. Prop. Code § 92.052(b))
• Tenant remedies (repair-and-deduct, lease termination, damages) require statutory notice mechanics: either a second written notice after a reasonable time, or a first notice sent by certified or tracked mail, plus a reasonable time to repair, which is presumed to be seven days. (Tex. Prop. Code § 92.056)
• A landlord may not, within six months after a tenant in good faith exercises a legal right or remedy, gives a repair notice, complains to a government or code enforcement entity, or participates in a tenant organization, retaliate by eviction, decreasing services, raising rent, or terminating the lease, except on statutory grounds. (Tex. Prop. Code § 92.331)

Eviction Basics

Texas evictions are forcible detainer suits filed in justice court. The default notice to vacate is three days' written notice, which the lease may shorten or lengthen. SB 38 rewrote the process effective January 1, 2026: tenants late for the first time in the current month must get a notice to pay rent or vacate, and notice delivery methods now include email where the lease allows it.

• Before filing a forcible detainer (eviction) suit, the landlord must give a tenant who defaults or holds over at least three days' written notice to vacate, unless the lease contracts for a shorter or longer period. (Tex. Prop. Code § 24.005(a))
• For eviction suits based solely on nonpayment where the tenant was not late or delinquent before the current month, the notice must take the form of a notice to pay rent or vacate, giving the tenant the chance to pay and stay (SB 38, effective January 1, 2026). (Tex. Prop. Code § 24.005(a), as amended by Acts 2025, 89th Leg., Ch. 960 (S.B. 38))
• Eviction suits are filed in justice court; a sworn petition supports judgment for possession and unpaid rent, and unpaid rent is recoverable even if the tenant vacates after filing. (Tex. Prop. Code § 24.0051)
• A purchaser at a tax or lien foreclosure sale must give a residential tenant who is current on rent at least 30 days' written notice to vacate if the purchaser chooses not to continue the lease. (Tex. Prop. Code § 24.005(b))

Recent Changes Worth Tracking

These are the Texas changes most likely to affect a management company's procedures. Confirm the effective date against the source below before you update a lease template or a policy.

• Effective 2026-01-01: SB 38 (Acts 2025, 89th Leg., Ch. 960) overhauls the eviction process: first-time-delinquent tenants must receive a notice to pay rent or vacate rather than a bare notice to vacate, notice delivery methods are restated and include electronic delivery when agreed in writing, and several prior notice subsections were repealed. Applies to eviction suits filed on or after the effective date. (Tex. Prop. Code § 24.005 (as amended by S.B. 38))
• Effective 2025-09-01: SB 1333 creates a fast-track sheriff or constable removal process for unauthorized occupants (squatters) of dwellings via new Property Code Chapter 24B, and creates and enhances related criminal offenses for unauthorized entry, occupancy, and fraudulent leasing or sale of real property. (Tex. S.B. 1333, 89th Leg. (2025); Tex. Prop. Code ch. 24B)
• Effective 2025-09-01: HB 2037 changes rules for repairs made after a residential or manufactured-home tenant's notice of intent to repair and for the notice landlords give regarding tenants' security deposits. (Tex. H.B. 2037, 89th Leg. (2025))

Staying Compliant Without Guessing

Most Texas compliance failures are not decisions, they are drift: a deposit that sat too long, a reconciliation that got skipped in a busy month, a lease template that never got updated after a statute changed. Build the calendar first. Monthly trust reconciliations, an annual review of your lease and disclosure packet against current statutes, and a documented process for deposits and refunds cover the large majority of what an examiner will ask about.

This guide is a starting point for professional managers, not legal advice. For a specific dispute, a novel fact pattern, or anything with real money at stake, work with a Texas attorney, and confirm the current text of any statute cited above with the Texas real estate regulator or the Texas legislature.

Sources

Every fact above is drawn from one of the official sources below.

• Tex. Occ. Code § 1101.002(1)(A), Texas Statutes (Occupations Code)
• TREC FAQ, property manager licensing, Texas Real Estate Commission
• TREC FAQ; 22 Tex. Admin. Code § 535.34, Texas Real Estate Commission
• TREC broker renewal requirements; 22 Tex. Admin. Code § 535.92, Texas Real Estate Commission
• 22 Tex. Admin. Code § 535.146(a), Texas Real Estate Commission
• Tex. Prop. Code §§ 92.101-92.110, Texas Statutes (Property Code)
• Tex. Prop. Code § 24.005(f-3), Texas Statutes (Property Code)
• Tex. Loc. Gov't Code § 214.902, Texas Statutes (Local Government Code)
• Tex. Loc. Gov't Code § 250.007, Texas Statutes (Local Government Code)
• Texas Fair Housing Act (Tex. Prop. Code ch. 301); TWC Civil Rights Division, Texas Workforce Commission
• Tex. S.B. 1333, 89th Leg. (2025); Tex. Prop. Code ch. 24B, Texas Legislature Online
• Tex. H.B. 2037, 89th Leg. (2025), Texas Legislature Online