Texas landlord loses deposit dispute and is ordered to pay three times the amount, plus attorney fees

Yunan Angelina Zhou, the landlord, said the home required additional cleaning and repairs, but the couple declined to pay the extra amount.

A routine security-deposit dispute turned into a costly legal fight after a Texas landlord refused to return $2,600 to former tenants and instead demanded more money for alleged repairs and cleaning. When the couple would not agree to the extra charges, the landlord took the matter to court. The decision ultimately went against her, and a report by Backyard Green Lover said she was ordered to pay triple the original deposit, along with the tenants' legal fees.

Pushing her luck

The dispute began after Adrienne and Corey Rawlings moved out of the home they had rented from Zhou. Zhou kept their full $2,600 deposit, saying the property needed extra cleaning and repairs. The couple refused to pay the added charges, and Zhou responded by filing suit in a local justice court, accusing them of breach of contract and fraud. The Rawlingses answered with a counterclaim, arguing that she had withheld their money in bad faith and violated state law.

Missing records

Zhou lost the first case, but she continued to challenge the ruling. She sought a new trial in county court and lost again, then took the case to the Texas Fourteenth Court of Appeals. She said she had enough proof, stating, "I have sufficient evidence to support my allegations." She also argued that the couple had failed to leave a forwarding address. But the appeal ran into a major problem: neither side had hired a court reporter for the earlier trial. With no official transcript to review, the appellate judges had to presume the lower court was correct, which ended Zhou's bid to overturn the main ruling.

The renter's reality

Cases like this are common. According to the Zillow Rentals Consumer Housing Trends Report 2024, only 42% of renters receive their full security deposit back when they move out, while 10% get nothing back at all. The report also found that 52% of tenants say they have disputes with landlords over move-out costs. Under Texas Property Code Section 92.109, landlords who wrongfully keep deposits in bad faith can be ordered to pay three times the deposit amount, plus the tenant's attorney fees.

The payback

The appeals court agreed that Zhou acted in bad faith and upheld the penalty. Judges corrected some calculation errors from the lower court, reducing the main award from $10,400 to $7,800. They also lowered prejudgment interest from $3,019.36 to $158 after the tenants acknowledged the original figure was wrong. Even with those adjustments, Zhou still owed triple the deposit and remained responsible for the tenants' legal costs.