Houston landlords are heading into 2026 with a familiar goal: stable rent, fewer surprises, and a protected investment. But this year, the risks feel less like “bad luck” and more like small missteps that snowball: one shaky lease agreement, one missed notice date, one applicant who looks qualified until the fraud surfaces.
Add tighter eviction timelines, Houston’s short-term rental enforcement, and volatile flood pricing that can squeeze your mortgage and reserves, and suddenly, every decision matters.
In 2026, running a rental property and every rental unit inside it means managing risk on purpose.
Key Takeaways
- Align your lease and rental agreement with the Texas Property Code so fees, notices, and remedies hold up under Texas landlord-tenant laws.
- When a tenant owes rent, follow a repeatable process for issuing a written notice, tracking rent payments, and escalating to court.
- Treat necessary repairs, security devices, and utilities as core services that protect tenant rights and quiet enjoyment.
- Apply fair housing screening standards consistently to prospective tenants to reduce exposure to housing discrimination.
1) Compliance Baseline: File Quality and Notice Proof
In Texas, the Texas Property Code (Chapter 92) is the rulebook that requires landlords to follow certain steps and timelines during a lease term, from notices to fees to how you handle problems. The simplest way to protect yourself is to keep a clean “paper trail” for every rental period: a signed lease, a record of payments, and receipts for any charges or collections.
When something is time-sensitive, such as a demand letter or a notice to vacate, send it via a method you can prove: certified or registered mail with return receipt requested. That proof often matters more than what you meant to send.
Finally, don’t rely on rent control to solve affordability disputes. Under Texas law, rent control is generally not allowed except in very limited disaster-related situations.
2) Non-payment Risk: Late Fees, SB 38, and Litigation Costs
When a tenant does not pay rent, move quickly, but stay disciplined. Start with a clear, dated notice (often “pay rent or vacate”) and deliver it in a way you can prove, such as certified mail. Then follow the eviction process step by step with clean documentation: your ledger, copies of notices, and a written timeline of communication. SB 38 also raises the stakes for procedural accuracy in 2026, so consistency matters more than ever.
Budget realistically. A single missed month's rent, often one month's rent, can disappear fast, and court costs add up as soon as you file. In some cases, the prevailing party may recover court costs and reasonable attorney's fees, but treat that as a potential upside, not a plan. When the facts are messy, get legal help early and involve an attorney.
3) Repairs and Safety: Avoid “Withhold Rent” Escalations
Texas rules on repairs are straightforward: if a landlord fails to fix a serious health or safety problem, the tenant may have legal remedies, especially when it risks physical health. Many renters assume they can stop paying, but “withholding rent” is usually not the correct move in Texas.
The smarter approach is to act fast and stay organized: log the request, inspect promptly, schedule the repair, and confirm completion in writing. Taking appropriate action quickly protects the resident and strengthens your position if a dispute ever reaches court.
Security should be handled the same way; required devices aren’t optional upgrades; they support safe living and quiet enjoyment.
4) Utilities: Electric Bill Payments and Disconnections
Texas law is clear: if a tenant pays the utility company directly, a landlord generally can’t shut off service except for real repairs, construction, or an emergency. If you submeter and collect electric bill payments, you must follow a strict written-notice process before any interruption due to nonpayment.
Keep it simple and professional, document every notice, payment, and conversation. And when a tenant requests disconnection, coordinate with the utility company, confirm the final meter reading, and issue a final receipt to avoid disputes later.
5) Fair Housing: State and Federal Exposure
Fair housing is not just a “best practice”: it is the law. The federal Fair Housing Act bans discrimination against protected groups, including familial status and national origin, and Texas reinforces these housing discrimination laws through the Texas Fair Housing Act.
Violations can trigger a civil action and serious civil penalties under federal laws and state rules. The safest approach is simple: use the same screening standards for every applicant, document your reasons, and avoid “gut-feel” exceptions.
If you need guidance, Texas community affairs agencies and the ccprovide resources on complaints and recordkeeping. Consistency also matters because fraud is on the rise.
When your process is uniform and well-documented, you protect equal opportunity, and you can defend your decisions if someone alleges discrimination.
FAQ
When must I return a security deposit?
§92.103 generally requires a return within 30 days after surrender, excluding lawful deductions for normal wear.
Can I charge late fees if the lease is silent?
No; §92.019 requires the late fee to be in the written lease and to meet timing rules.
Can I disconnect electricity for unpaid bills?
Only in limited cases and only by following §92.008’s written notice process.
Where do tenants file housing discrimination complaints? TDHCA points to TWC or HUD and related fair housing resources.
2026 Rewards the Landlords Who Run Tight Systems
In 2026, the biggest threat isn’t one difficult tenant: it’s a loose process that turns small issues into expensive disputes.
Protect your income by building enforceable leases, documenting every notice and payment step, managing utilities by the book, and treating repairs and fair housing as non-negotiable standards. Maintain clean records so you can act fast, and if a case reaches court, be ready to sue with organized proof, not stress and guesswork.
Residential Leasing & Management Co. helps Houston owners turn risk into routine with sharper leasing, screening, maintenance, and compliance systems. If you want fewer surprises and stronger returns in 2026, book a schedule with us today!
Additional Resources
A Landlord’s Guide When A Tenant Files For Punitive Damages in Houston, TX
Common Grounds for Tenant Eviction in Houston: What You Need to Know
