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PLANNING AHEAD TO AVOID TENANT PROBLEMS Presented by: Anthony J. Barbieri
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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
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ITINERARY BREAK – 10:30 - 1045
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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
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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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ITINERARY LUNCH – Noon – 1:00
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ITINERARY Recap of Morning Lecture Q&A – 1:00 – 1:15 (Cross & Barbieri)
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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
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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
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ITINERARY BREAK 2:30 – 2:45
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ITINERARY Discrimination and Americans With Disabilities Act 2:45 – 3:00 (Barbieri) Discrimination Americans With Disabilities Act Texas Architectural Barriers Act
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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)
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RENTING THE APARTMENT Repairs Express Agreements to Repair City Codes Construction Eviction Habitability Legislation Landlord Duties
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RENTING THE APARTMENT Tenant’s Repairs Prerequisites for Tenant (“Self Help”) Notice Rent Reasonable time for repairs Second demand by Tenant Burden of proof
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RENTING THE APARTMENT Landlord’s “Loopholes” In Repairing the Premises Severe Casualty Closing the Rental Premises
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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
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RENTING THE APARTMENT Disclosure of Ownership and Management Generally Remedies for Noncompliance
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RENTING THE APARTMENT Smoke Detectors Generally Remedies for Noncompliance No separate damages under common law Maybe separate damages under DTPA
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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
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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
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RENTAL APPLICATIONS - QUESTIONS YOU SHOULD ASK Identity Information Prior Residential Information Financial Status Employment History Criminal Background Miscellaneous Statement Regarding False Information Application Deposits
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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
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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
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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
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THE LEASE AND WHAT SHOULD BE INCLUDED Lease Term Primary term ends without notice Watch for removal options
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THE LEASE AND WHAT SHOULD BE INCLUDED Covenant of Peaceable, Quite Enjoyment Unless lease says otherwise, this is implied by law Key “proviso”
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THE LEASE AND WHAT SHOULD BE INCLUDED Changing the Conditions of a Lease Be careful about modifications to Lease
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THE LEASE AND WHAT SHOULD BE INCLUDED Property Rules and Regulations Landlord should reserve the right to modify from time to time
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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”
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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
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THE LEASE AND WHAT SHOULD BE INCLUDED Rent Withholding Generally, Texas Courts apply theory of “independent contracts” to Leases Tenant has lien on Landlord
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IF YOU ARE STILL AWAKE YOU ROCK!
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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
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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
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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
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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
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THE LEASE AND WHAT SHOULD BE INCLUDED Termination of a Lease Termination of the Lease Based on Default Lease Provisions Demand for Performance Refusal to Accept Performance Waiver of Default Effect on Retaliation Wrongful Eviction, Termination
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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
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THE LEASE AND WHAT SHOULD BE INCLUDED Joint and Several Liability of Covenants Roommates Agreement between roommates is not binding on Landlord
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THE LEASE AND WHAT SHOULD BE INCLUDED Security Deposit Covered later, but, look at sample language regarding balance due and replenish
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THE LEASE AND WHAT SHOULD BE INCLUDED Permitted Use Living quarters for limited number of people Pets Commercial Use
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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
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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
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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
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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
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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
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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
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LEASE GUARANTEES Should be separate agreements Guarantor should absolutely and unconditionally guarantee Should not grant additional rights
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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
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AMERICANS WITH DISABILITIES ACT Effective since 1992 Requires “reasonable accommodations” Applies to new and remodeled commercial properties
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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
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Title III – extends Title II to all privately owned public accommodations, such as movie theaters, restaurants, office buildings and museums.
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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.
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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 AMERICANS WITH DISABILITIES ACT
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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”)
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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
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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
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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
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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
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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 TEXAS ACCESSIBILITY STATUTES
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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
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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
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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
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SECURING TENANT’S PERFORMANCE UNDER THE LEASE – SECURITY DEPOSITS AND LANDLORD’S LIENS Security Deposit vs. Letter of Credit vs. Certificate of Deposit
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