Transcript Document
PLANNING AHEAD
TO AVOID TENANT
PROBLEMS
Presented by:
Anthony J. Barbieri
ITINERARY
Planning Ahead to Avoid Tenant Problems
9:00 – 10:30 (Barbieri)
Renting the Apartment
Rental Application – Questions You Should Ask
The Lease and What Should be Included
Conditions Checklist
Lease Guaranties
ITINERARY
BREAK – 10:30 - 1045
ITINERARY
Notice to Quit & Evictions 10:45 – Noon
Termination for Non-Payment of Rent
Termination for Breach of Rental Agreement
Termination for No Cause Where There is No
Renewal Agreement
Termination of Rental Agreement When
Property is Sold
Termination by Landlord Under the Terms of
Written Rental Agreement
ITINERARY
Evictions 10:45 – Noon
Grounds for Evictions and Jurisdiction
Service of Summons and Complaint
Rent Escrow
Judgment and Writ of Possession
Advancement
Discovery and Jury Trials
Default and Summary Judgment
Appeals
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LUNCH – Noon – 1:00
ITINERARY
Recap of Morning Lecture Q&A – 1:00 – 1:15
(Cross & Barbieri)
ITINERARY
Ethical Considerations 1:15 – 1:45 (Barbieri)
Legislative Update
Legal and Ethical Issues Surrounding Auditing
of Attorney’s Bills
Conflict of Interest
Commingling of Security Deposits
ITINERARY
What Defenses Does a Tenant Have? 1:45 –
2:30 (Cross)
Payment of Rent
Minor Defects, Repair and Deduct
Consumer Fraud Acts
Retaliatory Eviction
Sale and Conversions Into Condominiums
(Barbieri)
Agreements With Parties Other Than Tenants
Lack of Notice
ITINERARY
BREAK 2:30 – 2:45
ITINERARY
Discrimination and Americans With
Disabilities Act 2:45 – 3:00 (Barbieri)
Discrimination
Americans With Disabilities Act
Texas Architectural Barriers Act
ITINERARY
Special Landlord/Tenant Issues 3:00 – 4:30
Illegal Evictions – Landlord Lockouts (Barbieri)
UCC Financing Statements (Cross)
Securing Tenant’s Performance Under the Lease
– Security Deposits and Landlord’s Liens
(Barbieri)
Distress Warrants (Cross)
Differences Between Security Deposits, Letters
of Credit and Certificates of Deposit in a Tenant
Bankruptcy (Barbieri)
RENTING THE APARTMENT
Repairs
Express Agreements to Repair
City Codes
Construction Eviction
Habitability Legislation
Landlord Duties
RENTING THE APARTMENT
Tenant’s Repairs
Prerequisites for Tenant (“Self Help”)
Notice
Rent
Reasonable time for repairs
Second demand by Tenant
Burden of proof
RENTING THE APARTMENT
Landlord’s “Loopholes” In Repairing the
Premises
Severe Casualty
Closing the Rental Premises
RENTING THE APARTMENT
Security Devices
Locks and Other Security Measures
Necessary
Security Officers
Re-keying and Changing Locks
Repairs of Security Devices
Right of Landlord to Charge for Repair
Remedies for Noncompliance
RENTING THE APARTMENT
Disclosure of Ownership and
Management
Generally
Remedies for Noncompliance
RENTING THE APARTMENT
Smoke Detectors
Generally
Remedies for Noncompliance
No separate damages under common law
Maybe separate damages under DTPA
RENTING THE APARTMENT
Legislative Update
HB 299 – Landlord’s duty to mitigate
damages, TPC § 91.006
HB 388 – F.E.D. Time for setting hearing,
TPC § 24.004
HB 537 - Landlord’s duty to mitigate
damages if Tenant abandons, TPC § 91.015
HB 636 - Fair Housing Practices
RENTING THE APARTMENT
Legislative Update (continued)
HB 1502 – Tenant’s right summon police in
emergency, TPC § 92.015
HB 2160 – Specialty insurance license for certain
persons who rent residential property (Sec. 1. Art.
21.09, Insurance Code)
HB 2180 – Charges assessed by landlord, TPC §
93.004
HB 2187 – Notice to residential tenants re utility
interruption, TPC § 92.008
HB 3190 – Refund or retention of security deposit
under commercial lease, TPC § 93.005
RENTAL APPLICATIONS QUESTIONS YOU SHOULD ASK
Identity Information
Prior Residential Information
Financial Status
Employment History
Criminal Background
Miscellaneous
Statement Regarding False Information
Application Deposits
THE LEASE AND WHAT
SHOULD BE INCLUDED
Lease Basics & Definitions
“Any written or oral agreement between
a Landlord and a Tenant that
establishes or modifies the terms for
occupying a Premises” TPC § 92.001
THE LEASE AND WHAT
SHOULD BE INCLUDED
Tenancies and Licenses
Distinguished
Lease grants exclusive right to
possession
No magic words to create
Look to intent of parties
THE LEASE AND WHAT
SHOULD BE INCLUDED
Lease Validity
Leases are blends of contract and
property law
When in doubt, go with ordinary
contract doctrines
Oral leases okay if less than 1 year
THE LEASE AND WHAT
SHOULD BE INCLUDED
Lease Term
Primary term ends without notice
Watch for removal options
THE LEASE AND WHAT
SHOULD BE INCLUDED
Covenant of Peaceable, Quite
Enjoyment
Unless lease says otherwise, this is
implied by law
Key “proviso”
THE LEASE AND WHAT
SHOULD BE INCLUDED
Changing the Conditions of a Lease
Be careful about modifications to Lease
THE LEASE AND WHAT
SHOULD BE INCLUDED
Property Rules and Regulations
Landlord should reserve the right to
modify from time to time
THE LEASE AND WHAT
SHOULD BE INCLUDED
Rent and Nonpayment Issues
Most important part of Lease
Due Date
Grace Period
Specify where to send rent
“Additional Rent”
“Lost in mail”
THE LEASE AND WHAT
SHOULD BE INCLUDED
Late Charges
No specific limit
DTPA - $35 too much for 1 day
Lease is not debt transaction, so no
usury
Contradiction
Notice to avoid waiver
THE LEASE AND WHAT
SHOULD BE INCLUDED
Rent Withholding
Generally, Texas Courts apply theory of
“independent contracts” to Leases
Tenant has lien on Landlord
IF YOU ARE STILL AWAKE
YOU ROCK!
THE LEASE AND WHAT
SHOULD BE INCLUDED
Subleases and Assignments
Texas law differs from many other
states, so watch out for form lease
Good idea to prohibit subleases and
assignments
THE LEASE AND WHAT
SHOULD BE INCLUDED
Waiver of Tenant’s Rights
Some Tenant waivers are enforceable,
some are not
Be careful with form leases that waive
invalid rights
THE LEASE AND WHAT
SHOULD BE INCLUDED
Exculpatory Clauses
These can protect Landlord by
reducing exposure
i.e., Landlord is not responsible for
Tenant’s property loss on Premises
THE LEASE AND WHAT
SHOULD BE INCLUDED
Termination of a Lease
Generally, a Lease terminates at end of
term
Can be terminated earlier for breach
Month-to-month and periodic
tenancies
THE LEASE AND WHAT
SHOULD BE INCLUDED
Termination of a Lease
Termination of the Lease Based on Default
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Lease Provisions
Demand for Performance
Refusal to Accept Performance
Waiver of Default
Effect on Retaliation
Wrongful Eviction, Termination
THE LEASE AND WHAT
SHOULD BE INCLUDED
Termination of a Lease
Effect on Termination
• Liability for Future Rents – difference
between terminating lease and
terminating Tenant’s right to possess
• Unenforceable Penalties
THE LEASE AND WHAT
SHOULD BE INCLUDED
Joint and Several Liability of
Covenants
Roommates
Agreement between roommates is not
binding on Landlord
THE LEASE AND WHAT
SHOULD BE INCLUDED
Security Deposit
Covered later, but, look at sample
language regarding balance due and
replenish
THE LEASE AND WHAT
SHOULD BE INCLUDED
Permitted Use
Living quarters for limited number of
people
Pets
Commercial Use
THE LEASE AND WHAT
SHOULD BE INCLUDED
Prohibitions
Good idea to state what Tenant cannot
use Premises for
Don’t forget to reserve the right to
terminate
THE LEASE AND WHAT
SHOULD BE INCLUDED
Utilities
Lease should specify that Tenant is
responsible for all utilities
Be careful about utility accounts in
Landlord’s name
No rent abatement
THE LEASE AND WHAT
SHOULD BE INCLUDED
Maintenance
Specify who is responsible for what
maintenance
Limit Tenant’s right to paint, or make
other improvements
THE LEASE AND WHAT
SHOULD BE INCLUDED
Abandonment of Premises
In light of H.B. 537, good idea to
define abandonment
Landlord should be able to terminate if
abandoned
THE LEASE AND WHAT
SHOULD BE INCLUDED
Notice
Specify where to send, what method
(Mail, CM/RRR, Delivery, etc.),
alternative methods (Fax, E-Mail)
Specify when effective
CONDITIONS CHECKLIST
Incorporate by reference into Lease
Deadline to turn in
Schedule walk-through upon
termination
Helps Landlord comply with statutes
regarding return of security deposit
LEASE GUARANTEES
Should be separate agreements
Guarantor should absolutely and
unconditionally guarantee
Should not grant additional rights
DISCRIMINATION
Prohibited Practices
Refusal to Negotiate or Rent
Differing Terms or Services
Restricting Choices to Perpetuate Segregation
Discriminatory Advertising
False Information on the Availability of Dwellings
Discrimination in Residential Real Estate-Related
Transactions
Handicap Discrimination
Familial Status
AMERICANS WITH
DISABILITIES ACT
Effective since 1992
Requires “reasonable
accommodations”
Applies to new and remodeled
commercial properties
AMERICANS WITH
DISABILITIES ACT
Title II – prohibits discrimination on the
basis of disability and applies to all
programs, activities and services provided
by public entities.
AMERICANS WITH
DISABILITIES ACT
Title III – extends Title II to all privately
owned public accommodations, such as
movie theaters, restaurants, office
buildings and museums.
AMERICANS WITH
DISABILITIES ACT
ADA’s prohibitions against discrimination
apply to “any person who owns, leases (or
leases to), or operates a place of public
accommodation,” that a landlord can be, and
often is liable for noncompliance.
AMERICANS WITH
DISABILITIES ACT
Under the ADA, an individual with a
disability is a person who:
Has a physical or mental impairment that
substantially limits one or more major life
activities
Has a record of such an impairment; or
Is regarded as having such an impairment
TEXAS ACCESSIBILITY STATUTES
In 1991, the Texas Architectural Barriers Act
(“TABA”) created the Texas Department of
Licensing & Regulations (“TDLR”).
In 1993, the TDLR adopted the Texas
Accessibility Standards (“TAS”)
TEXAS ACCESSIBILITY STATUTES
The TAS program provides three basic
functions:
Licensing
Plan Reviews and inspections
Enforcement of all new building and
facilities construction and renovations
TEXAS ACCESSIBILITY STATUTES
Buildings and facilities with construction,
renovation or alteration costs of $50,000
or more, are required by statute to be
submitted for review to either the
Elimination of Architectural Barriers
Department of TDLR, or to an
Independent Contract Provider (ICP)
under contract with the State.
TEXAS ACCESSIBILITY STATUTES
The TDLR and ICPs review construction
documents and conduct inspections for
compliance with the TABA and the TAS.
When there is non conformity, you must ask
for a variance.
TEXAS ACCESSIBILITY STATUTES
Three common reasons for rejecting a variance:
Lack of information supporting reason for the variance
Nothing to support the fact that the variance is “structurally
inpracticable”
In variances for projects involving alterations, there is no
reason given why the variance is “technically infeasible.”
“Structurally impracticable” and “technically
infeasible” are very technical terms that are often
applied capriciously.
TEXAS ACCESSIBILITY STATUTES
The TDLR is concerned with providing access to
many public areas –
Parking and passenger loadings
Stairs, ramps, elevators
Drinking fountains
Lavatories
Signs
Telephones, ATM’s
Fitting Rooms
Fire alarms
Medical care facilities
Transportation facilities
SECURING TENANT’S
PERFORMANCE UNDER THE
LEASE – SECURITY DEPOSITS
AND LANDLORD’S LIENS
Security Deposits - Residential
Definitions and Overview
Procedure to Refund
Penalties for Non-Compliance
Non-Refundable “Deposits” and Fees
Changes in Ownership
Other Issues
SECURING TENANT’S
PERFORMANCE UNDER THE
LEASE – SECURITY DEPOSITS
AND LANDLORD’S LIENS
Security Deposits - Commercial
Recent changes to Chapter 93 of Texas
Property Cod make commercial similar to
residential
Potential discrepancy within new code
SECURING TENANT’S
PERFORMANCE UNDER THE
LEASE – SECURITY DEPOSITS
AND LANDLORD’S LIENS
Landlord’s Liens
Overview
Requirements and Procedure for
Enforcement
Exempt Property
Sale of Property
Abandonment
Penalties for Violation
SECURING TENANT’S
PERFORMANCE UNDER THE
LEASE – SECURITY DEPOSITS
AND LANDLORD’S LIENS
Security Deposit vs. Letter of Credit vs.
Certificate of Deposit