H.B. No. 3497 amends the Texas Property Code to clarify the definition and scope of "security deposit" in relation to residential leases. The bill introduces a new subdivision, (5-a), which defines a security deposit as any advance of money intended to secure performance under a lease or to cover future damages to the leased premises. Additionally, it expands the definition of security deposits in Section 92.102 to include upfront or recurring fees required by landlords for future damages or lease violations, as well as fees related to a tenant's eviction or credit history, excluding application fees. The changes made by this Act will only apply to leases entered into or renewed after its effective date, ensuring that existing leases remain governed by the previous law. The Act will take effect immediately if it receives a two-thirds majority vote from both houses of the legislature; otherwise, it will take effect on September 1, 2025.

Statutes affected:
Introduced: Property Code 92.001, Property Code 92.102 (Property Code 92)