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)
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Renting the Apartment
Rental Application – Questions You Should Ask
The Lease and What Should be Included
Conditions Checklist
Lease Guaranties
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BREAK – 10:30 - 1045
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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
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Evictions 10:45 – Noon
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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
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Recap of Morning Lecture Q&A – 1:00 – 1:15
(Cross & Barbieri)
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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)
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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
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BREAK 2:30 – 2:45
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Discrimination and Americans With
Disabilities Act 2:45 – 3:00 (Barbieri)
 Discrimination
 Americans With Disabilities Act
 Texas Architectural Barriers Act
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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
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Express Agreements to Repair
City Codes
Construction Eviction
Habitability Legislation
Landlord Duties
RENTING THE APARTMENT
Tenant’s Repairs
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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
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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
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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
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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 –
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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
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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