A Texas landlord-tenant dispute over a $1,950 security deposit ended with a partial refund for the tenant, but not the legal costs he had hoped to recover. Blake Vaughn challenged deductions made by landlord Albert Li after his mother and two brothers moved out of a rented property in Tarrant County. The disagreement involved repair bills, changed locks and allegations of an unlawful lockout. A trial court ordered Li to return $880.32 but found insufficient evidence of bad faith and awarded court costs to the landlord. As reported in Texas Second Court of Appeals by Justia US Law, in June 2026, the Second Court of Appeals upheld that judgment.
Texas security deposit dispute began with a $1,950 deposit and a family rental agreement
The lease began on 25 March 2021, with an agreed extension allowing the occupants to remain in the property until 30 April 2022. Blake Vaughn, who paid the rent and security deposit, was not living there himself. The home was occupied by his mother and two brothers, whose move-out arrangements later became central to the disagreement with landlord Albert Li.Vaughn had paid a deposit of $1,950. Under the rental agreement, occupants were responsible for certain repairs and cleaning costs, along with damage caused by negligence or misuse. The contract also addressed smoke alarms, alterations to locks and the return of keys. Its provisions allowed the landlord to deduct qualifying expenses from the deposit, although the amount that could legitimately be charged remained disputed.The conflict emerged during the final day of the tenancy. Li said he had visited the property on the morning of 30 April and found the front door open, belongings still inside and tall weeds in the garden. He believed the family had moved out a week or two earlier. He also discovered that all four locks had been changed without his knowledge.
Security deposit dispute escalates after Texas landlord changes property locks
Li said he tried contacting Vaughn and his mother about the locks but received no response. He remained at the property while waiting to see whether anyone would return for the remaining possessions. Before leaving that evening, he changed a lock so that it would work with the key previously supplied to the tenant.During the visit, Li moved some belongings from the kitchen into the backyard, explaining that he wanted to clear the interior before prospective tenants saw the property. Vaughn’s mother later returned to collect her remaining items and found that she could not enter. Some of her possessions had been placed on the grass, according to her testimony.Her account differed from the landlord’s description of events. Texas Second Court of Appeals by Justia US Law reported, she said she had returned on the evening of 30 April because she still needed to collect belongings, including a medical device she used daily. She also disputed the suggestion that the family had left the property unsecured, saying she did not recall leaving the door open.Text messages submitted during the proceedings showed Vaughn challenging the landlord over the removal of the belongings and the loss of access. He raised concerns about possible damage to the family’s possessions and said an expensive piece of medical equipment was missing. Li eventually arranged for the remaining items to be collected on 3 May 2022. The dispute over whether the landlord’s actions amounted to an unlawful lockout later became one of the issues considered by the courts.
The landlord’s repair bill exceeded the deposit
Li maintained that the property required work before it could be rented again. He said several rooms needed new carpeting, walls required filling and repainting, and a smoke detector had been removed. Other charges concerned the locks, garage door, landscaping and various fixtures.He sent Vaughn an itemised breakdown of the alleged damage, totalling $1,649.35 beyond the amount held as the security deposit. Vaughn acknowledged receiving the document and returned it with comments disputing several entries.The tenant challenged the carpet charges, saying the condition of the flooring had been an issue before the family moved in. Vaughn’s mother also disputed the extent of the alleged damage. She said the walls had already contained holes in places and denied that the family had caused the carpet problems claimed by Li.Some charges were not contested in full. Vaughn did not dispute the lock replacement and labour costs, and he did not challenge a relatively small charge for the fire alarm and door stoppers. He did, however, question whether the family was responsible for other repairs and objected to landscaping expenses he believed went beyond restoring the property.Li’s position on the carpet also changed during the proceedings. He acknowledged that he had inspected the home briefly on 29 April and initially considered the carpet to have been cleaned well, apart from several pink stains.
Texas security deposit dispute reaches county court
The dispute had already passed through a lower court before reaching Tarrant County Court at Law No. 3. Li initially brought a small-claims action seeking approximately $1,649, while Vaughn filed several counterclaims. Vaughn won at the justice court, prompting Li to appeal the case to the county court.In the later proceedings, Li pursued claims involving breach of contract and the alleged removal of a smoke alarm. He sought actual damages, legal fees and court costs. His smoke-alarm claim relied on a provision of the Texas Property Code that can impose statutory damages when a tenant unlawfully removes or disables a smoke alarm.Vaughn brought claims of his own, including improper retention of the security deposit, retaliation and unlawful lockout. Other allegations, including defamation, libel and blackmail, were dismissed because the trial court lacked subject-matter jurisdiction over them.Both parties presented evidence about the condition of the property, the deposit deductions and the events surrounding the final day of the tenancy. Their lawyers also gave evidence about their fees.
The court orders a partial refund but rejects bad faith
The trial court ultimately allowed Li to retain $1,069.68 of the $1,950 deposit. It awarded Vaughn the remaining $880.32, finding that part of the money had been improperly withheld. The court did not find sufficient evidence that Li had acted in bad faith, however, and awarded court costs to the landlord.Vaughn appealed, challenging the refusal to award him attorney’s fees and court costs, the decision to award costs to Li and the ruling against him on his statutory-lockout counterclaim. He also argued that the landlord had failed to overcome the legal presumption of bad faith associated with retaining a security deposit in certain circumstances.The appeal was heard by the Second Court of Appeals of Texas in Fort Worth. In its memorandum opinion, Justice Bassel explained that the court had found some evidence supporting relevant factual findings that Vaughn had not challenged. Those findings mattered to his arguments over the deposit, the lockout claim and litigation expenses.
Why the ruling left both parties with an incomplete victory
The decision left the original allocation of the security deposit in place. Vaughn was entitled to recover $880.32, but he did not obtain the additional relief he had sought on appeal. Li, meanwhile, was permitted to retain $1,069.68 and kept the award of court costs, despite the finding that part of the deposit had been withheld improperly.The case turned on several distinct questions: which repair expenses were justified under the lease, whether the landlord’s handling of the property and access to it amounted to an unlawful lockout, and whether the evidence supported a finding of bad faith.The memorandum opinion was issued by the Second Court of Appeals of Texas in Blake Vaughn v. Albert Li, appeal number 02-25-00401-CV, from Tarrant County Court at Law No. 3. The appellate court affirmed the trial court’s judgment.