Relating to limitations on security deposit alternative products for residential leases.

The text as introduced · 277 words

90R2367 SCR-D

By: West
S.B. No. 228

A BILL TO BE ENTITLED

AN ACT

relating to limitations on security deposit alternative products

for residential leases.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter C, Chapter 92, Property Code, is

amended by adding Section 92.114 to read as follows:

Sec. 92.114. LIMITATIONS ON SECURITY DEPOSIT ALTERNATIVE

PRODUCTS. (a) In this section, "security deposit alternative

product" means a financial product a tenant purchases from a

landlord or third party that is intended primarily to secure

performance under a lease of a dwelling that has been entered into

by a landlord and a tenant. The term does not include a fee in lieu

of a security deposit under Section 92.111 that a landlord uses to

purchase insurance as described by that section.

(b) A landlord:

(1) may not require that a tenant purchase a security

deposit alternative product; and

(2) may offer a tenant the option to purchase a

security deposit alternative product in lieu of paying a security

deposit to the landlord on or before the commencement date of the

lease only if the amount of the security deposit is not greater than

the total amount the tenant would pay during the lease term for the

security deposit alternative product or for which the tenant would

otherwise be liable to the landlord or a third party under the terms

of the security deposit alternative product.

SECTION 2. Section 92.114, Property Code, as added by this

Act, applies only to a lease entered into or renewed on or after the

effective date of this Act.

SECTION 3. This Act takes effect January 1, 2028.