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PLANNING AHEAD TO AVOID TENANT PROBLEMS

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

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  1. PLANNING AHEAD TO AVOID TENANT PROBLEMS Presented by: Anthony J. Barbieri

  2. 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

  3. ITINERARY • BREAK – 10:30 - 1045

  4. 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

  5. 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

  6. ITINERARY • LUNCH – Noon – 1:00

  7. ITINERARY • Recap of Morning Lecture Q&A – 1:00 – 1:15 (Cross & Barbieri)

  8. 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

  9. 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

  10. ITINERARY • BREAK 2:30 – 2:45

  11. ITINERARY • Discrimination and Americans With Disabilities Act 2:45 – 3:00 (Barbieri) • Discrimination • Americans With Disabilities Act • Texas Architectural Barriers Act

  12. 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)

  13. RENTING THE APARTMENT • Repairs • Express Agreements to Repair • City Codes • Construction Eviction • Habitability Legislation • Landlord Duties

  14. RENTING THE APARTMENT • Tenant’s Repairs • Prerequisites for Tenant (“Self Help”) • Notice • Rent • Reasonable time for repairs • Second demand by Tenant • Burden of proof

  15. RENTING THE APARTMENT • Landlord’s “Loopholes” In Repairing the Premises • Severe Casualty • Closing the Rental Premises

  16. 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

  17. RENTING THE APARTMENT • Disclosure of Ownership and Management • Generally • Remedies for Noncompliance

  18. RENTING THE APARTMENT • Smoke Detectors • Generally • Remedies for Noncompliance • No separate damages under common law • Maybe separate damages under DTPA

  19. 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

  20. 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

  21. RENTAL APPLICATIONS -QUESTIONS YOU SHOULD ASK • Identity Information • Prior Residential Information • Financial Status • Employment History • Criminal Background • Miscellaneous • Statement Regarding False Information • Application Deposits

  22. 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

  23. 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

  24. 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

  25. THE LEASE AND WHATSHOULD BE INCLUDED • Lease Term • Primary term ends without notice • Watch for removal options

  26. THE LEASE AND WHATSHOULD BE INCLUDED • Covenant of Peaceable, Quite Enjoyment • Unless lease says otherwise, this is implied by law • Key “proviso”

  27. THE LEASE AND WHATSHOULD BE INCLUDED • Changing the Conditions of a Lease • Be careful about modifications to Lease

  28. THE LEASE AND WHATSHOULD BE INCLUDED • Property Rules and Regulations • Landlord should reserve the right to modify from time to time

  29. 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”

  30. 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

  31. THE LEASE AND WHATSHOULD BE INCLUDED • Rent Withholding • Generally, Texas Courts apply theory of “independent contracts” to Leases • Tenant has lien on Landlord

  32. IF YOU ARE STILL AWAKE • YOU ROCK!

  33. 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

  34. 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

  35. 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

  36. 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

  37. 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

  38. 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

  39. THE LEASE AND WHATSHOULD BE INCLUDED • Joint and Several Liability of Covenants • Roommates • Agreement between roommates is not binding on Landlord

  40. THE LEASE AND WHATSHOULD BE INCLUDED • Security Deposit • Covered later, but, look at sample language regarding balance due and replenish

  41. THE LEASE AND WHATSHOULD BE INCLUDED • Permitted Use • Living quarters for limited number of people • Pets • Commercial Use

  42. 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

  43. 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

  44. THE LEASE AND WHATSHOULD BE INCLUDED • Maintenance • Specify who is responsible for what maintenance • Limit Tenant’s right to paint, or make other improvements

  45. 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

  46. 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

  47. 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

  48. LEASE GUARANTEES • Should be separate agreements • Guarantor should absolutely and unconditionally guarantee • Should not grant additional rights

  49. 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

  50. AMERICANS WITH DISABILITIES ACT • Effective since 1992 • Requires “reasonable accommodations” • Applies to new and remodeled commercial properties

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