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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

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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 WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD BE INCLUDED

  • Lease Term

    • Primary term ends without notice

    • Watch for removal options


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THE LEASE AND WHATSHOULD 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 WHATSHOULD BE INCLUDED

  • Changing the Conditions of a Lease

    • Be careful about modifications to Lease


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THE LEASE AND WHATSHOULD BE INCLUDED

  • Property Rules and Regulations

    • Landlord should reserve the right to modify from time to time


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THE LEASE AND WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD BE INCLUDED

  • Rent Withholding

    • Generally, Texas Courts apply theory of “independent contracts” to Leases

    • Tenant has lien on Landlord



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THE LEASE AND WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD BE INCLUDED

  • Joint and Several Liability of Covenants

    • Roommates

    • Agreement between roommates is not binding on Landlord


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THE LEASE AND WHATSHOULD BE INCLUDED

  • Security Deposit

    • Covered later, but, look at sample language regarding balance due and replenish


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THE LEASE AND WHATSHOULD BE INCLUDED

  • Permitted Use

    • Living quarters for limited number of people

    • Pets

    • Commercial Use


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THE LEASE AND WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD 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 WHATSHOULD 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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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.


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AMERICANS WITH DISABILITIES ACT

  • 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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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


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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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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


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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.


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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.


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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.


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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


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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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