Texas Landlords and Tenants Guide - 2010

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Texas Landlords and Tenants Guide - Revised Jan 2010

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Texas Landlords and Tenants Guide - 2010

  1. 1. REVISED JANUARY 2010
  2. 2. Landlords and Tenants Guide Judon Fambrough Attorney at Law Texas A&M University Revised January 2010 © 2010, Real Estate Center. All rights reserved.
  3. 3. Landlords and Tenants Guide Contentsiii Foreword 1 Residential Landlords Duty to Repair 9 Retaliation11 Residential Landlords Duty to Return Security Deposits15 Rental Application17 Residential Landlords Duty to Install, Inspect and Repair Smoke Detectors21 Residential Landlords Liability for Utility Cutoffs and Interruptions25 Miscellaneous Landlord-Tenant Topics Charging Late Fees Providing Emergency Phone Number Guarantors Liability When Lease Renewed Advance Notices for Terminating Leases Termination of Leases for Criminal Conviction Tenants Lien S . ubletting and Finding Replacement Tenants Tenants Insurance Tenants Right to Protest Property Taxes Tenants Right to Summon Police Tenants Right to Terminate Lease for Family Violence Tenants Right to Terminate Lease for Sexual Offenses Tenants Right to Terminate Lease for Military Service33 General Provisions Relating to the Residential Landlord-Tenant Relationship Landlords Agents and Agents Liability Bad Faith and Harassment Waivers and Venue Cash Rental Payments Occupancy Limits for Adults Landlords Duty to Mitigate Damages Notices Sent to Tenants Primary Residence Policy Changes by Landlord Care of Deceased Tenants Personal Property and Security Deposit37 Removal of Property and Lockouts41 Residential Landlords Duty to Install and Maintain Security Devices49 Residential Landlords Duty to Disclose Ownership and Management of Rental Unit51 Public Nuisances at Multiunit Residential Property53 Common Nuisances Occurring at Multiunit Residential Property55 Residential Landlords Lien57 Landlords Right to Evict Tenants and Paupers Affidavit
  4. 4. Contents 65 Covenant for Quiet Enjoyment and Constructive Eviction67 Residential Rental Locators69 T . elecommunications71 S . wimming Pool Enclosures73 Pool Yard Enclosures with Relevant Definitions 81 Ascertaining the Criminal History of Employees of Residential Dwelling Projects with Relevant Definitions 85 Towing Vehicles from Parking Lots and Public Roadways 91 Rules for Towing Vehicles from Multiunit Complexes Parking Lots with Relevant Definitions 95 Federal and State Statutes Affecting Residential and Commercial Tenancies Soldiers and Sailors Civil Relief Act of 1940 Fair Housing Amendments of 1988 Pesticide Application Warning of Lead-based Paint or Hazards Statute of Frauds Contract Addendum for Disclosure of Information on Lead-based Paint Hazards101 Commercial Tenancies109 Submetering Commercial Property113 Landlord’s Lien on Commercial Buildings115 Self-Service Storage Facility Liens119 Mediation with Sample Agreement121 Glossary This report is for information only; it is not a substitute for legal counsel. ii
  5. 5. Foreword Income‑producing property plays a major role in and verify the criminal history of current and pro-Texas real estate. Central to much of this property is spective employees.the landlord‑tenant relationship. Significant legisla- In 1995, new laws were added concerning thetive changes have been made in recent years. licensing of residential rental locators, the abate- One basic rule of English common law was that ment of nuisances at multiunit residential property,a tenant’s duty to pay rent was independent of the the installation of telecommunications equipmentlandlord’s duty to repair without an agreement or on rental property and required educational coursesstatute to the contrary. The lease was regarded as a dealing with landlord-tenant issues. In 1997, theconveyance in land, subject to the doctrine of caveat 75th Legislature required landlords to mitigateemptor (“let the buyer beware”). The landlord was damages when a tenant moves out early. Also, therequired to deliver only the right of possession. The legislators raised the maximum amount for thetenant, in return, was required to pay rent as long repair-and-deduct statutes to $500 or one monthsas possession was retained, even if the building was rent, whichever is greater.destroyed or became uninhabitable. This report discusses the various subchapters of Texas courts and legislators have attempted to the Texas Property Code, the Texas Local Govern-soften the harshness of this rule. The first major ment Code, the Texas Health and Safety Code, therelief came in 1978, when the Texas Supreme Court Texas Human Resources Code, the Texas Govern-established an implied warranty of habitability on ment Code, the Texas Civil Practices and Remediesresidential landlords (Kamarath v. Bennett, 568 S.W. Code and also Articles 6701g-2 and 6573(a) of the2d 658 [Tex. 1978]). Texas Civil Statutes as amended, as each applies to In 1979, Texas legislation effectively extinguished residential and commercial tenancies.the implied warranty by enacting Subchapter B of Because of the number of recent amendments,Section 92 of the Texas Property Code. As stated in many sections lack case law to construe and clarifythat subchapter, the law replaced existing common meaning and application. This is particularly true oflaw (case law) and other statutory law, warranties laws dealing with security devices, pool yard en-and duties of residential landlords for maintenance closures and towing vehicles. To make the statutesand repair of rental units. more understandable, the language has been changed More changes were enacted in 1993. Most signifi- to lay terms when possible.cant was the replacement of subchapter D with new Landlords and tenants alike should be aware ofprovisions requiring the installation of certain secu- the current statutes. For landlords, the awareness isrity devices in residential units. The failure of the critical; knowledge helps avoid liability. Tenants, onlandlord to comply allows the tenant to unilaterally the other hand, need to know the law so they canterminate the lease. Also, another new law permits preserve, protect and claim their rights and remedies.employers in multiunit complexes to inquire about iii
  6. 6. Residential Landlord’s Duty to Repair or Close Leasehold: Subchapter B, Chapter 92, Texas Property Code Subchapter B is significant to residential landlords How do tenants know who to contact forand tenants. Under the former implied warranty of repairs?habitability, the landlord was obligated to make thepremises habitable throughout the lease term. The Landlords who have on-site management or aduty arose automatically without the tenant taking superintendent’s office for residential rental prop-any initiative. However, under the present legislative erty must provide a 24-hour telephone number forstandard, the tenant must inform the landlord of a reporting emergencies on the leased premises thatproblem before the repair obligation arises. materially affect the physical health or safety of an Each section of Subchapter B is discussed in the ordinary tenant. The number must be posted outsideorder that it appears in the statutes, beginning with the management or superintendent’s office (SectionsSection 92.051 and ending with Section 92.061. The 92.020[a]&[b]).focus is primarily on what the landlord must repair, What about landlords in other situations?what the tenant must do to invoke the landlord’sduty to repair and what the tenant’s options are if Landlords who do not have on-site managementthe landlord fails to repair. or a superintendent’s office must provide tenants The statutes addressing landlord retaliation, Sec- a telephone number for reporting emergencies ontions 92.057 and 92.059, have been moved to Sub- the leased premises that materially affect the physi-chapter H, Sections 92.331 through 92.334, effective cal health or safety of an ordinary tenant (SectionJanuary 1, 1996. 92.020[d]. The manner by which the information must be provided is not specified in the statute.Which leases are affected? Are there any exceptions to the rules? The subchapter affects all residential leases execut-ed, entered, renewed or extended on or after Septem- Yes. The rules do not apply to or affect a local ordi-ber 1, 1979 (Section 92.051). Obviously, amendments nance governing a landlord’s obligation to provide aadded after 1979 became effective as specified by the 24-hour emergency contact number if the ordinanceenabling legislation. was adopted before Jan. 1, 2008, and if it conforms with or is amended to conform with the require-Which conditions must landlords repair? ments of the statute (Section 92.020[c]). Section 92.052[b] sets the basic premise for the Which conditions need not be repaired bysubchapter. The landlord must make a diligent effortto repair or remedy any condition when: the landlord? • the tenant has specified the condition in a Unless the problem is caused by normal wear and notice to the person who collects rent or to the tear, the landlord has no duty to repair conditions place where the rent is normally paid, caused by: • the tenant is current in rent payments when • the tenant the notice is given, and • a lawful occupant of the apartment • the condition: • a member of the tenant’s family 1) materially affects the health or safety of an • a tenant’s guest or invitee ordinary tenant or Finally, the landlord is not required to furnish 2) arises from the landlords failure to provide utilities from a utility company if the utility lines and maintain in good operating condition are not reasonably available. The landlord is not re- a device to supply hot water of a minimum quired to furnish security guards (Section 92.052[b]). temperature of 120 degrees Fahrenheit. The phrase normal wear and tear is defined as The notice must be in writing only if the written “deterioration that results from the intended use oflease so requires. As a practical matter, all notices a dwelling . . . but the term does not include dete-should be in writing and either delivered in person rioration that results from negligence, carelessness,or sent by certified mail, return receipt requested. accident or abuse of the premises, equipment orOtherwise, proving that notice was served may be chattels by the tenant, by a member of the tenant’sdifficult. If delivered, some verification such as a household, a guest or invitee of the tenant (Texaswitness or a written acknowledgment from the re- Property Code, Section 92.001[4]).cipient is needed. 1
  7. 7. Who has the burden of proof? When may the landlord close a unit? Normally, in a judicial proceeding, the tenant Basically, the landlord has the right to close a unitmust prove that the landlord failed to repair or rem- by giving written notices announcing that the land-edy a condition that materially affects the health or lord is terminating the tenancy as soon as legallysafety of an ordinary tenant (Section 92.053). How- possible, and, after the tenant moves, the landlordever, the landlord must assume this burden if the will either demolish the unit or no longer use it fortenant can show that residential purposes. Notices must be sent by certi- • reasonable time has elapsed since the initial fied mail, return receipt requested, to the tenant, notice to repair was given, to the local health officer and to the local building inspector (Section 92.055). • a subsequent written notice was given to the After the tenant leaves, the landlord may not allow landlord demanding an explanation for the de- reoccupancy or reconnection of utilities by a sepa- lay and rate meter within six months. Likewise, neither the • the landlord failed to make the repairs or give local health officer or building inspector may allow a written explanation for the delay within reoccupancy or utility service by a separate meter five days after the second demand notice was to the rental unit until all known conditions that received. materially affect the physical health or safety of an The major problems are determining what consti- ordinary tenant have been repaired or remedied.tutes an unreasonable delay and what constitutes If the landlord gives the tenant the closing noticea nondiligent effort to repair. Some guidelines are before the tenant gives the landlord a repair notice,provided later in Section 92.056. Furthermore, if the landlord has no liability to the tenant. If therepairs are not made by the landlord, the tenant has tenant’s notice to repair precedes the landlord’s clos-three options, but only one involves judicial action. ing notice, the tenant’s monetary recoveries include:Consequently, shifting the burden of proof is impor- • actual and reasonable expenses;tant only to tenants who seek the judicial remedies • pro rata refund of any unused, prepaid rent;discussed later. • return of the security deposit less any properHow does casualty loss affect repair deductions;obligations? • one month’s rent plus $500; The landlord has no duty to repair following a ca- • actual damages; andsualty loss such as that caused by fire, smoke, hail or • court costs and attorneys fees, excluding anyexplosions until the landlord receives the proceeds attorneys fees for personal injury.for an insured casualty (Section 92.054). The statutes interject two important qualifications Until the repairs are actually completed, however, to this provision. First, the first three recoverieseither the landlord or tenant may terminate the lease apply only if the tenant moves out before the end ofby giving to the other a written notice whenever the the lease term. Second, the closing of one or morecasualty loss units is permitted without closing the entire apart- • rendered the unit totally unlivable and ment complex. • was not caused by the negligence or fault of the Sections 92.056 and 92.0561 were amended by the tenant, a member of the tenant’s family, a guest 75th Texas Legislature. Both sections apply to resi- or invitee of the tenant. dential leases entered or renewed on or after January If the lease is so terminated, the tenant is entitled 1, 1998.to a pro rata refund of rent from the date the tenant It is the authors opinion that by complying withmoves out and to a refund of any security deposit the procedures outlined below, the tenant fulfillsrequired by law. both the old and new statutory requirements for If the unit is rendered partially unusable for resi- repairing and deducting from rent. However, thedential purposes from a casualty loss not caused by most the tenant may deduct is one months rent forthe negligence or fault of the tenant, a member of unrenewed leases entered before January 1, 1998.the tenant’s family, a guest or invitee of the tenant,the tenant is entitled to a proportionate rent reduc- At what point does the landlord becometion upon a judgment of a county or district court. liable for not doing repairs after beingAlthough this alternative entails a judicial proceed- notified by the tenant?ing, in practice it rarely occurs. However, the land- Section 92.056(b) lists several requirements for cre-lord and tenant may agree to nonjudicial, proportion- ating landlord liability for nonrepairs, based on howate rent reduction measures in the lease. the tenant gave the notice to the landlord. If the tenant notifies the landlord in person or in writing, the landlord becomes liable when all of the following are true. 2
  8. 8. • The notice is given to the person to whom the If the six factors are met, are there tenant normally gives rent payments to repair exceptions under which the landlord still or remedy a condition. does not have to make repairs? • The condition materially affects the physical health or safety of an ordinary tenant. The landlord still has no obligation to repair or remedy a condition when: • The tenant gives a second notice in writing to repair or remedy the condition after a reason- • the condition was caused by the tenant or able time elapses. guests (Section 92.052[b]) or • The landlord has had a reasonable time to re- • the landlord is awaiting the proceeds from an pair or remedy the condition after receiving the insured casualty loss (Section 92.054). second notice. • The landlord does not make a diligent effort to What alternatives does the tenant have if repair or remedy the condition after receiving the six conditions are met, creating landlord the second notice. liability, and none of the exceptions apply? • The tenant was not delinquent in rent at A tenant to whom a landlord is liable may, accord- the time the notice(s) were given (Section ing to Section 92.056(e): 92.056[a]&[b]). • terminate the lease, If the tenant initially notifies the landlord by certi-fied or registered mail, the landlord becomes liable • repair or remedy the condition according to Sec-when all of the following are true. tion 92.0561 and deduct the cost of the repair • The tenant notifies the landlord to repair or from the rent without the necessity of judicial remedy a condition by certified mail, return action or receipt requested or by registered mail. The • obtain judicial remedies as specified in Section notice is sent to the person to whom the tenant 92.0653. normally gives rent payments. What happens if the tenant elects to termi- • The condition materially affects the physical health or safety of an ordinary tenant. nate the lease? • The landlord has had a reasonable time to re- If the tenant elects to terminate the lease, the ten- pair or remedy the condition after receiving the ant is entitled to: notice (by certified or registered mail). • a pro rata refund of rent from the date of ter- • The landlord has not made a diligent effort to mination or the date the tenant moves out, repair or remedy the condition after receiving whichever is later, and the notice (by certified or registered mail). • deduct the tenants security deposit from the • The tenant was not delinquent in rent at tenants rent without the necessity of a lawsuit the time the notice was given (Section or obtaining a refund of the tenants security 92.056[a]&[b]). according to law (Section 92.056[f]). The tenant is not entitled to pursue any of theWhat is considered a reasonable time for other remedies specified in Section 92.056(e) if themaking repairs? tenant elects to terminate the lease. According to Section 92.056(d), a rebuttable pre-sumption exists that seven days is a reasonable time What is the repair-and-deduct option? Whatto make repairs. Factors rebutting the presumption are its qualifications and limits?include the: The repair-and-deduct option allows the tenant to • date the landlord receives notice, arrange and pay for repairs, then deduct the amount • severity and nature of the condition and from rent payments. The statute qualifies this restriction to some de- • the reasonable availability of materials and gree. First, the deductions for repairs for any month labor, and also the availability of utilities from may not exceed one months rent or $500, whichever the utility company. is greater. However, if the tenant’s rent is subsidizedWhen is the notice received for purposes of in whole or in part by a governmental agency, the de- duction limitation means the fair market rent for thecalculating the seven days? dwelling and not the amount of monthly rent that Notice is deemed received by the landlord when the tenant actually pays. The government agencythe landlords agent or employee physically receives subsidizing the rent makes the determination.it or when the U.S. Postal Service attempts delivery Otherwise, fair market rent is a reasonable amount(Section 92.056[c]). under the circumstances. 3
  9. 9. Second, the repair person or supplier cannot place cooling equipment; the equipment is producinga lien on the property for the materials or services inadequate heat or cooled air; and the landlordcontracted by the tenant under this remedy. The has been notified in writing by the appropriatelandlord is not personally liable for the repairs. local housing, building or health officials or And finally, the statute places the following re- other official having jurisdiction that the lackstrictions on the option. of heat or cooling materially affects the health • Unless there is an agreement to the contrary, or safety of an ordinary tenant; then the tenant the tenant, the tenant’s immediate family, the must wait three days before making repairs. tenant’s employer or employee of a company in • After the landlord has received written which the tenant owns an interest cannot make notification from the appropriate local housing, the repairs. building or health official or other official • The repairs must be made by a company, having jurisdiction that some other condition contractor or repair person listed in the Yel- exists that materially affects the health or low Pages or business section of the telephone safety of an ordinary tenant, the tenant must directory. Alternatively, they may appear in the wait seven days before making repairs (Sections classified section of a local or county newspa- 92.0561[d]&[f]). per or in the newspaper in an adjacent county In some situations, a local housing, building or at the time the tenant gives the landlord notice health official must verify certain conditions materi- of having selected the repair-and-deduct option. ally affect the health or safety of an ordinary tenant • No repairs may be made to the foundation or before repairs can begin. load-bearing structure of a building containing This verification is not required when the condi- two or more dwelling units. tion involves raw sewage, flooding from broken pipes, natural drainage inside the dwelling, potable • All repairs must be made in compliance with water or water service, or failure of the heating or building codes, including building permits air conditioning system. Otherwise, verification is when required. (It is unclear whether the cost needed before proceeding under the repair-and-de- of the permits is included as part of the repair duct option. costs.) • After the repairs are made, the tenant must How may the landlord delay the tenant’s furnish the landlord a copy of the repair bill and option to repair and deduct? the receipt for payment with the balance of the The tenant’s option to repair and deduct may be next month’s rent (Section 92.0561). delayed by the landlord’s delivering the tenant aMust the landlord inform the tenant of signed and sworn affidavit (Section 92.0562). The Affidavit for Delay, as it is called, must be deliveredthese remedies? before the tenant contracts for the repairs. The af- Yes. Effective Jan. 1, 2008, all leases must contain fidavit may be executed by either the landlord or anlanguage that is underlined or placed in bold print authorized agent. It must be delivered to the tenantinforming the tenant of the remedies available under by one of three methods:Sections 92.056 and 92.0561 (Section 92.056[g]). • in person, The Real Estate Center at Texas A&M Universityreproduced those remedies as a contractal addendum • by certified mail, return receipt requested oron its website at recenter.tamu.edu/pdf/1837.pdf. • left in a conspicuous place at the tenants dwelling if notice of delivery in such a mannerWhen can the tenant begin to make repairs? is authorized in the written lease. This depends on the situation. The affidavit must be submitted in good faith and • When the condition involves the backup or summarize the reasons for the delay. The affidavit overflow or raw sewage or the flooding from must contain a sworn statement that diligent efforts broken pipes or natural drainage inside the have been and are being made to effect repairs. The dwelling, the tenant may remedy the situation dates, names, addresses and telephone numbers of immediately after giving notice. There is no the contacted contractors, suppliers and repair per- waiting period. sons must be included. • When the condition involves the breach of an The affidavit will delay repairs only in two circum- expressed or implied lease agreement to furnish stances. If neither circumstance exists, the affidavit potable water to the tenants dwelling and the is ineffective. First, the inability to obtain necessary water service has ceased totally, the tenant parts will delay the landlord’s repair obligation 15 must wait three days before making the repairs. days. Second, the general shortage of labor or materi- als following a natural disaster such as a hurricane, • When the condition involves an expressed or tornado, flood, extended freeze or widespread wind- implied lease agreement to furnish heating or storm will delay the landlord’s obligation 30 days. 4
  10. 10. The landlord can file repeated affidavits as long as liability is twice that of the former landlord’s for thethe total delay does not exceed six months. same act. An Affidavit for Delay is effective only whennecessary parts are unavailable or there is a short- What judicial remedies are available toage of labor or materials following a natural disaster. tenants?However, no affidavit is required and no repairs are Until Jan. 1, 2010, Section 92.0563 lists as many asnecessary when the landlord is waiting for insurance five possible judicial remedies a tenant may pursue ifproceeds following a casualty loss mentioned in Sec- the judicial option is chosen:tion 92.054. • A court order directing the landlord to take The law presumes that the landlord acted in good reasonable steps to repair the condition.faith and with continued due diligence for the first • A court order reducing the tenant’s rent accord-affidavit. However, this presumption may be re- ing to the reduced rental value resulting fromfuted or disproven by the tenant. After that, there is the condition. The reduction is figured froma presumption to the contrary. If the landlord files the time the first repair notice was given untila false affidavit or does not act with due diligence, the condition is repaired.the landlord is liable for all the judicial remedies • A judgment for one month’s rent plus $500.described later except that the civil penalties shall be • A judgment for the amount of the tenant’sone month’s rent plus $1,000. actual damages. If the landlord repairs the condition or delivers • Court costs and attorneys fees excluding thosean affidavit for delay after the tenant has contacted relating to recoveries for personal injury.the repair person but before the repair person begins The tenant’s petition may be filed in the justice,work, the landlord is liable for the repair person’s county or district courts, depending on the amounttrip charge. If the landlord does not reimburse the of the tenant’s claim. However, until Jan. 1, 2010,tenant for the charge, the tenant may deduct the the justice courts may not order the landlord tocharge from rent as if it were a repair cost. make repairs. They can render the other remedies.How does change of landlords affect The right of the justice court, the county court or the district court to hear a certain case depends onremedies? the monetary amount of the claim or dispute. The tenant’s choice of remedies may be affected byan intervening change of ownership. If the tenant has What judicial remedies are available toopted to terminate the lease, an intervening change tenants who file in the justice courts afterof ownership after proper notices have been given tothe former landlord does not necessitate new no- Jan. 1, 2010?tices to be given to the new landlord. Likewise, the If a suit is filed in the justice court (JP) requestingtenant’s right to repair and deduct for sewage back- an order directing the landlord to take reasonableup, inside flooding or cutoff of potable water is not steps to repair the condition, the justice court shouldaffected, and new notices are not required. However, conduct a hearing on the request between the 6thnew notices must be given for any other repair-and- and tenth day after the service of the citation on thededuct situation if the: landlord. If the justice finds for the tenant, the court may not award a judgment, including the costs of • tenant has not contracted for the repairs, repair, that exceeds $10,000, excluding interest and • landlord acquires title without knowledge of court costs (92.0563[d] and [e]). the tenant’s notices to the prior landlord and Note. The Texas Supreme Court is directed to • acquiring landlord has notified the tenant of the adopt rule of civil procedure to effectuate Sections new landlord’s name and address or an agent’s 92.0563(d) and (e). The rules must be adopted by the name and address. high court by Jan. 1, 2010. If the tenant has chosen the third option (judicialremedies), any judicial remedy shall be limited to re- Can the order from the justice court becovery against the former landlord if an intervening appealed? What effect does an appeal havechange of ownership occurs. By issuing new notices on the order by the justice court?to the acquiring landlord, however, the new landlord The judgment of the justice court may be appealedbecomes liable for the judicial remedies specified to the county court. The appeal takes precedence inin Section 92.0563. If, however, the new landlord the county court. The appeal may be heard any timeviolates Section 92.0562, the new landlord is liable after eight days after the transcript is filed. An appealto the tenant for a civil penalty of one month’s rent by the owner of the property perfects the appeal andplus $2,000, actual damages and attorneys fees. stays the effect of the judgment by the justice court Exactly how a new landlord can violate Section without the need to post an appeal bond (Section92.0562 is unclear. However, the new landlord’s 92.0563[f]). 5
  11. 11. Can tenants retaliate? poses two elements on the landlord. The first is to The tenant is prohibited from withholding rents, make the repairs; the second is to make repairs atcausing repairs to be performed or deducting repair the landlord’s expense. The statutes place the twocosts from rent in violation of Subchapter B (Section elements in separate categories.92.058). If the tenant breaches this rule, the landlord The first category permits waivers when the ten-may recover actual damages. However, the penalties ant makes the repairs at the landlord’s expense. Thisare more severe if the tenant undertakes any or all is somewhat akin to the repair-and-deduct optionthree of the same acts, in bad faith, after the landlord but without the limitations and restrictions of onehas informed the tenant in writing that the acts are month’s rent. The second category permits waiversin breach of the subchapter and stated the penalties when the tenant makes the repairs at the tenant’sfor the breach. expense. Obviously, the second category is nearly Under these circumstances, the landlord may opposite of the first. Hence, the formalities for thisrecover a civil penalty of one month’s rent plus $500 type of waiver are quite extensive.and reasonable attorneys fees. However, the land- When may the tenant make repairs at thelord must prove by clear and convincing evidencethat the landlord’s expense? • written notice was given to the tenant in per- Two waivers apply (Sections 92.006[d] and son, by mail or delivered to the premises and 92.0561[g]). The landlord and tenant may agree for the tenant to repair, at the landlord’s expense, any • the tenant acted in bad faith. condition that materially affects the physical health The tenant cannot take matters in hand but must or safety of the ordinary tenant (Section 92.006[d]).follow precisely the procedures prescribed in Sub- Also, the landlord and tenant may mutually agree forchapter B. If the steps are not followed exactly, the the tenant to repair, at the landlord’s expense, anytenant, not the landlord, will be liable. condition of the dwelling regardless of whether it materially affects the health or safety of an ordinaryWhere does tenant send or deliver notices? tenant (Section 92.0561[g]). A managing agent, leasing agent or resident Together, the two sections permit the landlord andmanager is the agent of the landlord for purposes of tenant to agree for the tenant to repair or remedy anynotice of repair for Section 92.060 or other commu- condition just as long as it is at the landlord’s ex-nication required or permitted by the subchapter. pense. The waivers are not required to be in writing. It is unclear whether Section 92.060 contradicts In fact, the statutes require no formalities except theSection 92.052 discussed earlier. Section 92.052 existence of the agreement.requires the tenant to give notice of a condition to Because of the monetary restrictions (one month’sthe person to whom or to the place rent is normally rent) and the subject matter limitation (only thosepaid. Such a person or place may not be the man- things that affect the physical health or safety of anaging agent, leasing agent or resident manager as ordinary tenant) the tenant may wish to pursue thespecified in Section 92.060. If they are not the same second waiver (Section 92.0561[g]) to make neededperson or place, the tenant should send two notices, repairs around the dwelling that do not fall withinone in compliance with each section. the coverage of Subchapter B. The duties of a landlord and the remedies of a tenantunder Section 92.061 are in lieu of existing case law or When may tenants pay for repairs?other statutory law, warranties and duties of landlords Two waivers apply in the second, more restric-for maintenance, repair, security, habitability and tive, category (Sections 92.006[e] and 92.006[f]). Thenonretaliation and remedies of tenant for a violation landlord and tenant may agree for the tenant to re-of those warranties and duties. In other words, Sub- pair, at the tenant’s expense (Section 92.006[e]), anychapter B represents the tenant’s sole legal means to condition that materially affects the physical healthprompt a residential landlord to make repairs and the or safety of an ordinary tenant if the following eightsole legal means for a judicial recovery in the event of conditions are met in the lease:the landlord’s noncompliance. • The residential lease must have been entered into or renewed after August 31, 1989.Are waivers permitted? • At the beginning of the lease term, the landlord Discussion of a residential landlord’s duty to repair must own only one rental dwelling.is not complete without addressing waivers. Basical-ly, the landlord is prohibited from waiving any duty • At the beginning of the lease term, the dwell-to repair the premises except in four instances. Three ing must be free from any condition that wouldare found in Subchapter A of Chapter 92 of the Texas materially affect the physical health or safety ofProperty Code, the other in Subchapter B. an ordinary tenant. Some general facts about the landlord’s duty to • At the beginning of the lease term, the landlordrepair will help explain the statutes. The law im- must have no reason to believe any condition 6
  12. 12. that materially affects the physical health or last one) after February 28, 1990. Finally, this waiver safety of an ordinary tenant is likely to occur or requires the tenant to pay for repairs. It says nothing recur during the tenant’s lease term or during a about the tenant making the repairs. renewal or extension. • The lease must be in writing. How may landlords be penalized for waiver • The agreement for the tenant’s repairs must be violations? either underlined or printed in boldface in the If a landlord knowingly violates either of the last lease or in an attached, written addition (adden- two waivers by contracting orally or in writing to dum). waive the landlord’s duty to repair, severe statutory • The agreement must be specific and clear (un- remedies are mandated. The tenant may recover ambiguous). actual damages, a civil penalty of one month’s rent, $2,000 and reasonable attorneys fees (Section • The agreement must be made knowingly, vol- 92.0563[b]). The tenant has the burden of pleading untarily and for consideration (money). and proving the landlord breached the statute know- It is unclear when or why a tenant would agree to ingly. If the lease is in writing and in compliancesuch an arrangement unless the consideration was with Section 92.006, the tenant’s proof must be clearrent reduction equal to the repair costs or a reim- and convincing.bursement equal to the cost of a third party making Although the penalties are intended to keep athe repairs. landlord from violating the waivers, it is difficult to The landlord and tenant may agree (Section imagine how a waiver made in compliance with Sec-92.006[f]) that the tenant has the duty to pay for tion 92.006 can be violated knowingly. Two of therepairs for four requirements for either of the last two waivers • damage from wastewater stoppages caused by are for them to be underlined or in boldface print and foreign or improper objects in lines serving the to be made knowingly, voluntarily and for consider- rental unit exclusively; ation. However, to make sure the tenant is aware of • damage to doors, windows or screens; and any such waivers in the lease, the landlord should have the tenant initial and date the provision. • damage from windows or doors left open. Significant changes were made to Subchapter B ofHow are Section 92.006(f) waivers the Texas Property Code in 1989. As with any new law, it will take time for the courts to construe andimplemented? clarify their meaning. In the meantime, landlords To implement this waiver, the following eight and tenants must puzzle over what repairs material-conditions must be met: ly affect the physical health or safety of an ordinary • The residential lease must have been executed tenant. or renewed before March 1, 1990. Also, some concept of what constitutes an ordi- nary tenant must be formulated. Are babies and the • The condition occurred during the lease term or physically handicapped “ordinary tenants?” Obvi- a renewal or extension. ously, conditions that would affect their health and • The condition was not caused by the landlord’s safety might not affect the health of others. negligence. • The agreement does not relieve the landlord’s What lease provisions are important? duty to repair wastewater stoppage or backups Tenants and landlords also should be aware of how caused by deterioration, breakage, roots, ground the lease agreement can affect the landlord’s duty conditions, faulty construction or malfunction- to repair. Tenants may unwittingly give up (or even ing equipment. gain) certain rights when they sign the lease. Here is • The lease must be in writing. a list of the relevant lease provisions mentioned in • The agreement for the tenant’s repairs must be Subchapter B. either underlined or printed in boldface in the • The landlord and tenant can agree that the ten- lease or in an attached, written addition (adden- ant will make all the repairs at the landlord’s dum). expense. This may be placed in the lease or • The agreement must be specific and clear (un- made orally (Sections 92.006[d] and 92.0561[g]). ambiguous). • The landlord and tenant can agree that the ten- • The agreement must be made knowingly, vol- ant will make all repairs that materially affect untarily and for consideration (money). the physical health and safety of an ordinary tenant at the tenant’s expense. This waiver The last four requirements for this waiver are must meet the eight requirements previouslyidentical to the prior one. Also, it is apparently outlined (Section 92.006[e]).impossible to agree to a Section 92.006(f) waiver (the 7
  13. 13. • The lease agreement may address whether the It is imperative that both the landlord and ten- first notice to repair must be in writing (Section ant know and understand Subchapter B of the Texas 92.052). Property Code. From the landlord’s perspective, it• The landlord and tenant may agree to a pro- is important to know what items must be repaired portionate reduction in rent if a casualty loss and when the tenant has taken the appropriate steps renders the unit partially unusable (Section (notices) to prompt their repair. 92.054). From the tenant’s perspective, knowledge of Sub- chapter B is important in taking advantage of the• The landlord and tenant may agree that the available remedies. Tenants who attempt self-help tenant, the tenant’s immediate family, the measures or improperly attempt to invoke Subchap- tenant’s employer or employee of a company ter B remedies may be liable to the landlord, accord- in which the tenant owns an interest can make ing to Section 92.058. the repairs under the repair-and-deduct option Most tenants may know that a notice must be (Section 92.0561). given before the landlord’s repair duty arises. How-• The landlord may waive any expressed or im- ever, few may realize that at least two, and possibly plied duty to furnish heating and cooling equip- three, notices are necessary. Likewise, tenants may ment (Section 92.0561). not know when the notices must be given nor what• The tenant may agree (or refuse to allow) the they must say. landlord to give effective notices by leaving the Finally, tenants must know that the landlord has a notice in the tenant’s dwelling in a conspicu- duty to repair only conditions that materially affect ous place. This affects whether a notice may the physical health and safety of an ordinary tenant. be given by leaving an Affidavit of Delay at Even then, those conditions caused by the tenant, the tenant’s dwelling (Section 92.0562). It may a member of the tenant’s family, a tenant’s guest or affect whether the landlord can give notice to a lawful occupant of the dwelling are not covered. the tenant concerning the withholding of rent, Third party verification by health officials may be causing repairs to be performed or deducting required. repair costs from rent in breach of Subchapter B (Section 92.058). 8
  14. 14. Retaliation: Subchapter H, Chapter 92, Texas Property Code Subchapter H of the Texas Property Code was en- landlord violates a court order under Section 92.0563acted by the 74th Texas Legislature, effective January by:1, 1996. The new subchapter is composed primarily • increasing rent under an escalation clause in aof former Sections 92.057 and 92.059 of the Property written lease for utilities, taxes, or insuranceCode. It prohibits a landlord from retaliating when a ortenant pursues a repair-and-deduct option. Subchap- • increasing rent or reducing services as part of ater H contains Sections 92.331 through 92.334. pattern of rent increases or services reductionCan landlords retaliate? for an entire multi-dwelling project. Landlords are prohibited from retaliating against a What if an eviction or lease terminationtenant who: occurs within the six-month period? (1) in good faith exercises or attempts to ex- No eviction or lease termination shall be deemed ercise against a landlord a right or remedy retaliatory if based on one of the following: granted to the tenant by lease, municipal ordinance, or federal or state statute, • the tenant is delinquent in rent when the land- lord gives notice to vacate or files an eviction (2) gives a landlord a notice to repair or exercise action, a remedy under this chapter or • the tenant, a member of the tenants family, or (3) complains to a governmental entity responsi- a guest or invitee of the tenant intentionally ble for enforcing building or housing codes, a damages property on the premises or by word public utility, or a civic or nonprofit agency, or conduct threatens the personal safety of the and the tenant: landlord, the landlords employees or another • claims a building or housing code viola- tenant, tion or utility problem and • the tenant materially breaches the lease, other • believes in good faith that the complaint than by holding over, by an action such as is valid and that the violation or problem violating written lease provisions prohibiting occurred (Section 92.331[a]). serious misconduct or criminal acts, except as provided by this section,What type of retaliatory actions are • the tenant holds over after giving notice ofprohibited? termination or intent to vacate, Basically, for six months after the date the tenant • the tenant holds over after the landlord givesundertakes an action described in Section 92.331(a), notice of termination at the end of the rentalthe landlord may not retaliate by: term and the tenant does not take action under • filing an eviction proceeding, except for the Section 92.331 until after the landlord gives grounds stated in Section 92.332 (discussed notice of termination or later), • the tenant holds over and the landlords notice • depriving the tenant of the use of the premises, of termination is motivated by a good faith except for reasons authorized by law, belief that the tenant, a member of the tenants • decreasing services to the tenant, increasing family, or a guest or invitee of the tenant the tenants rent or terminating the tenants might: lease or 1. adversely affect the quiet enjoyment by • engaging, in bad faith, in a course of conduct other tenants or neighbors, that materially interferes with the tenants 2. materially affect the health or safety of the rights under the tenants lease (Section landlord, other tenants or neighbors or 92.331[b]). 3. damage the property of the landlord, otherWhat defenses do landlords have? tenants or neighbors (Section 92.332[b]). According to Section 92.332, a landlord is notliable if the actions were not taken for purposes ofretaliation. However, liability remains whenever the 9
  15. 15. What are the tenants remedies for a writing that a violation of a building or housing codelandlords retaliation? does not exist or that a utility problem does not ex- ist, there is a rebuttable presumption that the tenant If the tenant can prove the landlords actions were acted in bad faith.retaliatory, the tenant may recover: • a civil penalty of one months rent plus $500, Can tenants retaliate? • actual damages, The tenant is prohibited from withholding rents, causing repairs to be performed or deducting repair • court costs and costs from rent except in exact compliance with the • reasonable attorneys fees in an action either to repair-and-deduct procedures outlined in Subchapter recover property damages, moving costs, actual B. If the tenant breaches this rule, the landlord may expenses, civil penalties, or to get declaratory recover actual damages. However, the penalties are or injunctive relief, less any delinquent rents more severe if the tenant undertakes any or all three or other sums for which the tenant is liable to of the same acts, in bad faith, after the landlord has the landlord. informed the tenant in writing that the acts are in If the tenants rent payment to the landlord is sub- breach of the subchapter and stated the penalties forsidized in whole or in part by a governmental entity, the breach.the civil penalty granted under this section shall Under these circumstances, the landlord mayreflect the fair market rent of the dwelling plus $500 recover a civil penalty of one months rent plus $500(Section 92.333). and reasonable attorneys fees. However, the land- lord must prove by clear and convincing evidenceWhat remedies do landlords have for bad that thefaith claims filed against them? • written notice was given to the tenant in per- son, sent by mail or delivered to the premises If a tenant files or prosecutes a suit under this andsubchapter in bad faith, the landlord may recoverpossession of the dwelling unit and may recover • the tenant acted in bad faith (Section 92.058).from the tenant a civil penalty of one months rent The tenant cannot take matters in hand but mustplus $500, court costs and reasonable attorneys fees follow precisely the procedures prescribed in Sub-(Section 92.334[b]). If the tenants rent payment to chapter B. If the steps are not followed exactly, thethe landlord is subsidized in whole or in part by a tenant, not the landlord, will be liable.governmental entity, the civil penalty granted underthis section shall reflect the fair market rent of the What defenses do tenants have?dwelling plus $500. The tenant can defend an eviction suit by the The term bad faith is not defined. An example of landlord by showing that it is retaliatory (Sectiona tenants bad-faith action is illustrated in Section 92.335). Likewise, the tenant can defend a suit for92.334(a). If a tenant files or prosecutes a suit for nonpayment of rent by showing that it is in compli-retaliatory action based on a violation of a building ance with the repair-and-deduct procedures outlinedor housing code or a utility problem, and the govern- in Subchapter B.ment building or housing inspector or utility com-pany representative visits the premises and states in 10
  16. 16. Residential Landlord’s Duty to Return Security Deposits: Subchapter C, Chapter 92, Texas Property Code Subchapter C of the Texas Property Code governs defined as “deterioration that results from thesecurity deposits (Section 92.001 through Section intended use of a dwelling . . . but term does not92.109). The sections are addressed in numerical include deterioration that results from negligence,order. When possible, the statutes have been restated carelessness, accident or abuse of the premises,in common terms. equipment or chattels by the tenant, by a member of the tenant’s household or by a guest of the tenant”Which leases are covered? (Texas Property Code, Section 92.001[4]). The subchapter applies to all residential leases Although there is a statutory definition of normalregardless of when they were executed [Section wear and tear, there has been no case law to amplify92.101]. its meaning. Consequently, the determination is on a case-by-case basis with no fact situations as prec-How is the term security deposit defined? edents. Effective September 1, 1995, a security deposit is The landlord is required to give the tenant a writ-defined as any advance of money, other than a rental ten, itemized list of all the deductions except whenapplication deposit or an advance payment of rent, • the tenant owes rent at the time of the surren-intended primarily to secure performance of the resi- der anddential lease that has been entered by both a landlord • the amount of rent owed is not disputed.and tenant (Section 92.102). No language dictates thesize of the deposit; the amount is strictly negotiable. How and when should the unit’s conditionWhen should landlords return a deposit? be verified? Deductions from the security deposit are one of The landlord is required to return the tenant’s the major areas of dispute between the landlordsecurity deposit on or before 30 days after the tenant and tenant. The problems center on (1) whether thesurrenders the premises (Section 92.103). The tenant unit’s condition justified a cleanup, (2) whether aneed not give advance notice of the surrender as a defect was caused by the tenant or resulted from nor-condition for the refund except when the lease so mal wear and tear and (3) the amount of any justifiedprovides. Even then, the requirement must be under- repairs on cleanup. Unless proper precautions arelined and placed in conspicuous bold print. taken by the landlord and tenant, proving the unit’s If the landlord is in bankruptcy when the refund is condition both at the move-in and time of surrenderrequired, the tenant’s right to the deposit takes prior- may be difficult.ity over the claim of any creditor, including a trustee Part of the problem lies with the different motiva-in bankruptcy. tions of the parties at the critical times. When show-Must the security deposit be mailed by the ing the unit, the landlord tends to accentuate the unit’s positive aspects and downplay the negative.landlord or received by the tenant within 30 When the tenant moves out, the landlord tends todays after surrender of the premises? accentuate the negative aspects of the unit to justify According to Section 92.1071, a landlord must deductions from the security deposit. Obviously, themail the security deposit (and an accounting if tenant takes the opposite side each time.deductions are made). The letter must be placed in Consequently, accumulation and preservationthe U.S. mail and postmarked on or before the end of of objective evidence of the unit’s condition at thethe 30-day period. It does not have to be received by crucial times are imperative. Both parties should bethe tenant within the 30 days. amiable to one or more of the following suggestions. Perhaps the easiest way to document defects,What charges may be deducted from a flaws, needed repairs, dirty spots, unclean appliancessecurity deposit? and so forth is for the landlord and tenant to conduct Some charges may be deducted from the security a walk-through and list problems as they are discov-deposit (Section 92.104). The landlord may deduct ered. After the walkthrough, the list should be dateddamages and charges for which the tenant is legally and signed. Both the landlord and tenant may wishliable under the lease or as a result of its breach. to reserve the right to document other problemsHowever, no charges are allowed for normal wear discovered within a certain period after move-in orand tear. The phrase normal wear and tear is move-out. 11
  17. 17. Another approach is to take photographs or video- accurate records of all security deposits. There is notapes of the unit’s condition at move-in and move- legal requirement that the escrow payment be heldout. This may be supplemental to the walk-through in a separate account or that it accrue interest.or in lieu of it if both parties cannot be present ateither or both times. Why is a forwarding address important? The latter approach is preferable for several rea- The tenant is required to give the landlord a writ-sons. First, the severity of a problem can be docu- ten statement of the tenant’s forwarding address formented better on film. Second, ownership or man- purposes of refunding the security deposit. Until theagement may change after move-in. The new owners written forwarding address is received, the landlordor managers may dispute the findings of a walk- has no duty tothrough conducted when they were not personally • return the tenant’s security deposit orpresent. Third, in major apartment complexes, it is • give the tenant a written description of dam-physically impossible for the landlord to be present ages and charges.for each move-in and move-out when many tenantsarrive and leave at the same time. However, failure to give the forwarding address And finally, photographs taken both at the begin- does not cause the tenant to forfeit the right of re-ning and end of a lease term help differentiate dam- fund or the right to receive a description of damagesages and normal wear and tear. The tenant is liable and charges.for damages but not for normal wear and tear. The tenant’s written notice of a forwarding address Another unanticipated problem could arise even is a condition for the refund of the security depositwith careful walk-throughs and accompanying pho- (Section 92.107). However, it does not state when ortographs. Such problems include sudden damages how the notices must be given.occurring after move-in that are not caused by the The tenant has at least two possible approaches totenant. These include damages such as a leaking roof the problem. If the tenant has a permanent address,or flooding. as students do while away at college, the forwarding Obviously, the tenant should call these problems (or home) address may be placed on the lease when itto the landlord’s attention. However, the landlord is signed.may do nothing and charge the damages to the ten- If the forwarding address is not placed on the leaseant’s security deposit. This could happen, especially form, proof of the delivery may be a problem. Theif a change of ownership intervenes. Consequently, tenant may wish to pursue either or both of the fol-pictorial documentation of damages occurring after lowing procedures.move-in should be made and preserved. First, personally deliver a written copy of the for- Even with a walk-through, photographs or both, warding address and have the landlord or authorizedthe tenant should be aware of any lease provision agent acknowledge the receipt. Keep the acknowl-permitting clean-up costs. The wording of the provi- edgment (on a separate piece of paper) for proof ofsion and the amounts allowed for a cleanup in the delivery and the date notice was given.lease are important. Second, send the forwarding address to the land- For instance, the tenant might leave the apart- lord or authorized agent by certified mail, returnment immaculate. Even so, the lease still may allow receipt requested. Keep a copy of the notice and thethe landlord to have the unit cleaned for a predeter- return receipt for proof of delivery.mined cost. In fact, either a personal delivery of the forward- ing address or a certified letter sent to the landlordWho returns a deposit when ownership approximately 30 days before the lease terminateschanges? can satisfy several requirements. First, if the lease mandates an advance written notice as a condition When an intervening change of apartment own- for refund of the security deposit (as discussed earlierership occurs, the former owner who received the by Section 92.103), the advance notice can fulfillsecurity deposit and the new owner are jointly liable such a requirement.for the return (Section 92.105). However, the former Second, as just discussed, the letter can apprise theowner’s liability terminates once the new owner de- landlord of the tenant’s forwarding address if it waslivers to the tenant a signed statement acknowledg- not attached to the lease at signing.ing the owner has received and is responsible for the Finally, most written leases require the tenant totenant’s security deposit. The notice must specify give the landlord a 30-day advance written notice ofthe exact amount of the deposit received. move-out. This is required even though the lease is The section applies to any change of ownership for a fixed term. Again, this requirement can be metby sale, assignment, death, appointment of receiver, with such a notice.bankruptcy or otherwise except to a real estate mort- To make sure the check is not lost in the mail, thegagee who acquires title by foreclosure. tenant may wish to amend the lease by requiring the Section 92.106 gives a directive without impos- landlord to forward both the security deposit and theing a penalty. It simply requires the landlord to keep 12
  18. 18. itemized list of deductions by certified mail, return • the tenant’s reasonable attorneys fees.receipt requested. However, the tenant generally The landlord, not the tenant, has the burden of prov-does not have sufficient leverage to negotiate such a ing the retention of any portion of the deposit waschange. reasonable. The last two sections of Subchapter C describe thetenant’s and landlord’s liability. May a landlord wrongfully fail to provide an itemized list of deductions?May a tenant withhold rent in lieu of the The landlord who acts in bad faith by not provid-security deposit? ing a written description and itemized list of dam- A tenant is prohibited from withholding any part ages and chargesof the last month’s rent on grounds that the security • forfeits the right to withhold any portion of thedeposit will cover the balance (Section 92.108). If tenant’s security deposit,the tenant so withholds, the law presumes the ten-ant acted in bad faith. The tenant is liable for three • forfeits the right to bring suit against the tenanttimes the amount of rent wrongfully withheld plus for damages to the premises andthe landlord’s reasonable attorneys fees. • is liable for the tenant’s reasonable attorneys fees.May a landlord wrongfully withhold a This section’s impact on tenants cannot be over-security deposit? emphasized. Section 92.104 allows the landlord to The landlord is prohibited from wrongfully with- deduct “damages and charges for which the tenantholding a security deposit or failing to provide a writ- is legally liable under the lease” from the tenant’sten description and itemization of the deductions security deposit.(Section 92.109). If the landlord wrongfully continues The tenant may unknowingly consent to a multi-to do either or both for more than 30 days after the tude of charges when signing the lease. The tenanttenant surrenders the premises, the law presumes should realize that both the provision permitting thethe landlord acted in bad faith. charge and the amount of the charge are, in theory, The term bad faith is not defined by the statute. negotiable. Leases often require tenants to payHowever, the case law does lend some clues. In the charges for the following:case of Reed v. Ford, 760 S.W. 2d 26, the court held • cleanup (discussed earlier)that the term meant “ . . . an honest disregard of • late rent payments (both initial and daily)tenant’s rights; bad faith requires intent to deprivetenant of refund known to be lawfully due.” • violating pet restrictions Knowledge of the law plays an important role. In • unpaid utilitiesthe case of Ackerman v. Little, 679 S.W. 2d 70, the • unreimbursed service chargescourt held that the landlord was an “amateur lessor” • utilities for repairs or cleaninghaving only one rental property. As such, the land-lord was ignorant of the statute. This was a factor to • admitting company representatives to removeconsider in determining bad faith. resident’s telephone or TV cable services An appellate decision in 1994, Leskinen v. Burford, • opening the apartment for resident or occupant892 S.W. 2d 135, exonerated a landlord from liability, who has lost or forgotten keyciting the "amateur lessor" defense. The landlord • duplicate keysreturned the deposit 35 days after surrender of the • unreturned keyspremises. The appellate court distinguished this case from • insufficient light bulbsa former one, Wilson v. OConnor, 555 S.W. 2d 776, • scratches, burns, stains or unapproved holeswhere the landlord was held liable. In Wilson the • removing or rekeying unauthorized locks orlandlord never returned the deposit as opposed to be- latchesing five days late in this instance. • reletting costs To offset these cases, the tenant may wish toinclude a copy of Section 92.109 with the forwarding • returned check charges (not to exceed $100)address. If the security deposit is insufficient to cover the The landlord who acts in bad faith by withholding charges and damages, the landlord may recover theall or a portion of a security deposit is liable to the balance along with attorneys fees, filing fees andtenant for court costs in a judicial proceeding against the tenant. • $100, The tenant should examine provisions pertain- ing to security deposits before signing the lease. In • three times the portion of the deposit wrong- particular, does the lease require an advance notice fully withheld and as a condition for a refund (Section 92.103)? Exactly 13
  19. 19. what damages and charges can be deducted from the What happens if the landlord, not thedeposit (Section 92.104)? tenant, finds a satisfactory replacement?If the tenant finds a satisfactory If the landlord secures a replacement tenant satis-replacement, what effect does this have factory to the landlord and the replacement tenant occupies the dwelling on or before the commence-on the landlords retention of the security ment date of the lease, the landlord may retain anddeposit or rent-prepayment fee? deduct from the security deposit or rent prepayment Effective January 1, 1996, a landlord may not with- either:hold a security deposit or a rent prepayment fee if • a sum agreed to in the lease as a lease cancella-the tenant secures a replacement satisfactory to the tion fee orlandlord and the replacement tenant occupies the • actual expenses incurred by the landlord indwelling on or before the commencement date of the securing the replacement, including a reason-lease (Section 92.1031[a]). able amount for the time the landlord expended in securing the replacement tenant (Section 92.1031[b]). 14
  20. 20. Rental Application: Subchapter H, Chapter 92, Texas Property Code Subchapter H of the Texas Property Code was add- is not signed, it is presumed that the notice was noted effective January 1, 1996, (Section 92.351 through provided (Section 92.3515[b]).Section 92.354). The sections address a landlord-tenant problem relating to rental application depos- How must the acknowledgment read?its, primarily how they interact with security depos- The acknowledgment must include the followingits and when the deposit must be refunded. language or its substantive equivalent. A list of definitions contained in Section 92.351 “Signing this acknowledgment indicates that youincludes: have had the opportunity to review the landlord’s • Application deposit means a sum of money tenant selection criteria. The tenant selection cri- that is given to the landlord in connection with teria may include factors such as criminal history, a rental application. It is refundable if the ap- credit history, current income, and rental history. plicant is rejected as a tenant. If you do not meet the selection criteria, or if you • Application fee means a nonrefundable sum of provide inaccurate or incomplete information, your money that is given to the landlord to offset the application may be rejected and your application fee costs of screening an application for acceptance will not be refunded.” (Section 92.3515[c]) as a tenant. May the acknowledgment be included in • Applicant or rental applicant means a person the rental application form? who applies to a landlord for a dwelling rental. Yes. The acknowledgment may be a part of the • Co-applicant means a person who applies to rental application form if it is underlined or placed rent a dwelling with other applicants and who in bold print (Section 92.3515[d]). plans to live in the dwelling with other appli- cants. Under what circumstances can the tenant • Deposited means money deposited in an ac- get the rental application fee returned or count of the landlord or the landlord’s agent in a bank or other financial institution. refunded? • Landlord means a prospective landlord to If the landlord rejects the application and the whom a person applies to rent a dwelling. required selection or rejection criteria was not made available to the applicant, the landlord must return • Rental application means a written request the application fee and any application deposit (Sec- made by an applicant to a landlord to lease tion 92.3515[e]). premises from the landlord. • Required date means the required date for If required to do so, may the landlord refund any acceptance of the applicant under Section the application fee through the mail? 92.352. Yes. If the applicant requests the landlord to mailWhat information must accompany the the refund, the landlord must mail it to the address furnished by the applicant (Section 92.3515[f]).rental application when presented to theapplicant? When is an application deemed rejected? When the applicant receives the rental application An application is considered rejected when theform from the landlord, the landlord must provide, landlord does not give notice of acceptance to the ap-in writing, his or her criteria for accepting or deny- plicant on or before the seventh day after the:ing the application. The criteria may include the (1) date the applicant submits a completed rentalapplicant’s criminal history, previous rental history, application to the landlord on a form furnishedcurrent income, credit history, or failure to provide by the landlord oraccurate or complete information on the application (2) date the landlord accepts an application depositform (Section 92.3515[a]). (Section 92.352).Must the tenant verify receipt of the criteria The landlord cannot reject one co-applicant with-form? out rejecting all co-applicants. Yes. The applicant must sign an acknowledgmentform indicating the notice was provided. If the form 15
  21. 21. What if the seventh day falls on Saturday, What is the landlord’s liability for notSunday or a state or federal holiday? refunding the application fee or deposit? The required compliance date is extended to the A landlord who in bad faith fails to refund an appli-end of the next day following the Saturday, Sunday cation fee or deposit (presumably within the seven-or state or federal holiday on which the deadline falls day period) is liable for $100, three times the amount(Section 92.353[c]). wrongfully retained and the applicant’s reasonable attorney’s fees (Section 92.354).To whom must the landlord communicate The term bad faith is not defined. Presumably theacceptance or rejection of the application? same definition used in the security deposit section Unless the applicant requests otherwise, a landlord applies (Section 92.109).is presumed to have given notice of acceptance orrejection depending on the mode of communication May any of the requirements imposed(Section 92.353). If by telephone, the message must on landlords for providing the criteriabe given to the applicant, co-applicant or a person standards and refunding the application feesliving with the applicant either on or before the be waived?required date. If by mail, the notice must be by U.S. No. Any provision in a rental application that pur-mail, addressed to the applicant and postmarked on ports to waive a right or exempt a party from liabil-or before the required date. ity or duty under the requirements governing rental If the applicant requests acceptance or rejection by applications is void (Section 92.355).mail, the acceptance or refund must be mailed to theaddress furnished by the applicant. The statute is explicit concerning the date an ap-plication is deemed rejected. However, the statutedoes not state the exact date the refund is due. 16

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