In an ordinary Texas rental purchase governed by current Property Code §92.105, the buyer becomes responsible for returning the security deposit when title is acquired—even if the seller has not delivered the money. A narrow foreclosure exception applies. Texas Property Code §92.105

The deposit transfer requires reconciling three things: the tenant's supported deposit balance, the seller's payment or closing credit, and the buyer's signed acknowledgment to the tenant. A closing credit alone does not prove they agree.

This guide uses Texas law and forms applicable on August 25, 2026. Leases entered into before January 1, 2016, require the separate review described below.

Separate the tenant obligation from the sale contract

The seller's responsibility has its own rule. Under §92.105(b-1), a former owner remains liable for a deposit received during ownership until the new owner receives it or assumes liability, unless the parties specify otherwise in a written contract. The buyer's signed notice to the tenant is a separate duty under subsection (b). Do not treat delivery of that notice as the statutory test for ending the seller's liability. Section 92.105 and amendment history

For the buyer, this means keeping two questions separate: what is owed to the tenant, and what must the seller deliver under the purchase agreement? A claim against the seller for a missing transfer does not postpone the buyer's responsibility under subsection (a). Include both questions in your review of single-family rental acquisitions.

Check the applicable contract and lease addendum

As of August 25, 2026, the Texas Real Estate Commission's (TREC) applicable resale form is the One to Four Family Residential Contract (Resale), 20-19, effective July 1, 2026. TREC announced its adoption and mandatory-use timing in the May 7, 2026, meeting report; the official form page identifies the version.

For a tenant who will remain, review the assignment-and-assumption provision in the Addendum Regarding Residential Leases, 51-1, effective February 1, 2023. Under paragraph B(2), the seller must transfer deposits at closing, and the buyer must deliver the signed deposit acknowledgment to the tenant at closing. These are contractual timing requirements when that provision applies. TREC addendum and effective date, paragraph B(2)

Reconcile the lease and payment records before closing

Ask the seller and outgoing manager for the complete lease, renewals, amendments, deposit receipts, transaction ledger, and move-in condition records. Identify who currently holds the money. Section 92.106 requires accurate security-deposit records; the following reconciliation is a practical way to check the handoff. Texas deposit-record requirement

The deposit required by the lease does not establish how much was collected. If the manager's ledger conflicts with the tenant's receipts, request the underlying transactions and a written explanation for each difference.

Keep rent prepayments and other charges separately identified. Section 92.102 excludes advance rent and rental application deposits from its security-deposit definition, which focuses on money primarily intended to secure lease performance. Review any payment labeled a pet deposit or fee against its actual terms and purpose. Statutory definition

Ask the tenant to confirm the deposit paid and provide any conflicting receipts before closing. If the transaction uses an estoppel certificate—a tenant's written confirmation of lease facts—compare it with the payment evidence. Investigate disagreements before treating the balance as settled.

Trace the closing credit or payment

If the parties arrange a security deposit closing credit, ask the closing agent to identify it separately from rent prorations, repair concessions, and other adjustments. Confirm its treatment with the closing agent and lender, if any. For a direct transfer, retain the payment confirmation and receiving party's receipt.

A closing credit can reduce the buyer's cash needed to close without putting cash into the incoming manager's deposit account. Decide who will fund that account, how much, and when; then verify receipt. Avoid counting a credit and a separate payment as two transfers of the same deposit.

Hypothetical example: The verified tenant deposit is $2,500, with no refunds or valid reductions. The closing statement credits only $2,000, and no other transfer occurs. The buyer has a $500 funding gap; the smaller credit does not establish a smaller tenant deposit.

Resolve the gap in the closing documents. If it appears afterward, preserve the original records and pursue the seller's contractual obligation separately from the tenant's deposit balance.

Deliver the new owner's acknowledgment to the tenant

Prepare a signed statement identifying the property and tenant and confirming:

• The new owner has acquired the property.
• The new owner is responsible for the tenant's security deposit.
• The exact dollar amount of that deposit.

These three confirmations are the substantive requirements of §92.105(b). The subsection gives no numerical delivery deadline; the applicable TREC addendum supplies the at-closing requirement described above. Statutory acknowledgment, contractual deadline

Assign someone to deliver the signed statement and retain evidence of delivery in both the acquisition and management files. A copy left with the closing agent does not establish delivery to the tenant. Use the reconciled tenant deposit amount, rather than simply copying the closing credit.

Also update ownership and management information. Section 92.201 addresses disclosure of the record owner's name and street or post-office-box address, plus the name and street address of an off-site management company primarily responsible for the dwelling. Its disclosure procedures are separate from the signed deposit acknowledgment. Ownership and management disclosures

Include clear rent-payment and maintenance contacts in the handoff packet. For the broader transition, see management handoff responsibilities and tenant-facing rental guidance.

Resolve foreclosure, older-lease, and balance questions

The foreclosure exception is specific: §92.105(c) excludes a real estate mortgage lienholder acquiring title by foreclosure from subsection (a). It does not describe every foreclosure purchaser or every later buyer of a foreclosed house. Establish who acquired title and how before relying on that exception. Foreclosure provision

Older leases also require attention. The 2015 act amending §92.105 applies its changes only to residential lease agreements entered into on or after January 1, 2016; it preserves former law for earlier agreements. S.B. 1367, sections 9–10

Have a Texas real estate attorney resolve disputed balances, foreclosure status, older-lease applicability, and any proposed holdback or reimbursement terms. Do not create an unsupported acknowledgment merely to complete the closing file.

Treat the handoff as complete when the supported deposit balance matches the incoming ledger, the agreed transfer or credit is documented, any required manager funding has arrived, and delivery of the signed tenant acknowledgment is recorded. Keep this evidence together so the next manager can reconstruct the balance without contacting the seller.