Practical Real Estate Texas

Practical Insight and Commentary on Texas Commercial and Residential Real Estate Law

My Rental Property Is a Mess. Can I Terminate the Lease?

My Rental Property Is a Mess. Can I Terminate the Lease?

flooded home

Property damage during a natural disaster is never fun, but damage to leased property comes with additional complications. Primarily, there are two questions we must answer:

  1. What happens to the lease?
  2. Does the landlord have the obligation to immediately repair?

Your lease should address these issues and provide guidance. But in considering your options, you need to review your lease and the Texas Property Code provisions discussing casualty loss.

While parties can contract around the provisions of the Property Code, there are specific ways in which to do so. As such, the lease will need to be reviewed carefully to determine if any provisions have been waived or altered.

For most standard leases (i.e., from the Texas Association of Realtors and Texas Apartment Association), the provisions of the Texas Property Code have been incorporated into the lease. This post will address the right of either the landlord or tenant to terminate the lease.

Lease Termination Because Property Totally Unusable. Texas Property Code § 92.054(b).

If the rental property is totally unusable, then either the landlord or tenant may terminate the lease by providing written notice. Written notice should be delivered however stated in the lease.

When the lease is terminated, the tenant is entitled to a full return of the security deposit and a partial refund of pre-paid rent. Under this provision, it is possible that there will be a dispute as to whether the premises is totally unusable or just partially unusable.

If after a casualty loss the rental premises are as a practical matter totally unusable for residential purposes and if the casualty loss is not caused by the negligence or fault of the tenant, a member of the tenant’s family, or a guest or invitee of the tenant, either the landlord or the tenant may terminate the lease by giving written notice to the other any time before repairs are completed. If the lease is terminated, the tenant is entitled only to a pro rata refund of rent from the date the tenant moves out and to a refund of any security deposit otherwise required by law. Texas Property Code § 92.054(b).

Rent Reduction for Partially Unusable Property. Texas Property Code § 92.054(c).

If the rental property is only partially unusable, then the tenant is entitled to a partial rental reduction. Unfortunately, the statute does not say how the landlord and tenant are supposed to reduce the rent. For example, is it:

  1. A square footage reduction based on the damaged area, or
  2. Reduction in market rate rent

Additionally, the statute predicates the reduction on a judgment from county or district court. In these situations, it would be simpler (and more economical) for the parties to agree on a rental reduction and put that agreement in writing.

If after a casualty loss the rental premises are partially unusable for residential purposes and if the casualty loss is not caused by the negligence or fault of the tenant, a member of the tenant’s family, or a guest or invitee of the tenant, the tenant is entitled to reduction in the rent in an amount proportionate to the extent the premises are unusable because of the casualty, but only on judgment of a county or district court. A landlord and tenant may agree otherwise in a written lease. Texas Property Code § 92.054(c).

Closing the Rental Property for Six Months. Texas Property Code § 92.055.

The final statutory method for terminating the lease is closing the rental property. By statute, the landlord may close the rental property by giving notice to the tenant, the local health officer, and local building inspector. The notice must state that the landlord is terminating the tenancy as soon as legally possible and that the landlord will either immediately demolish the rental unit or no longer use the unit for residential purposes.

If the landlord closes the rental property, then the property must be closed for a minimum of six months after the tenant moves out. In addition, the health officer or building inspector must certify that there is no condition in the unit that materially affects  the physical health or safety of an ordinary tenant.

A landlord should provide notice of closing of the unit before the tenant has made repair requests. If you are a tenant, be sure to make repair requests quickly if you think the landlord will use this provision to terminate your lease.

The statute provides for penalties against the landlord if the tenant has already requested repairs. If the tenant has requested repairs, then the landlord must pay tenant’s actual and reasonable moving expenses, pro rata refund of rent, one month’s rent, and attorneys’ fees. Also, if the landlord violates this provision by releasing or not paying the tenant the required damages, then the landlord is also liable for one month’s rent, $100, and attorneys’ fees.

(a) A landlord may close a rental unit at any time by giving written notice by certified mail, return receipt requested, to the tenant and to the local health officer and local building inspector, if any, stating that:

(1)  the landlord is terminating the tenancy as soon as legally possible; and

(2)  after the tenant moves out the landlord will either immediately demolish the rental unit or no longer use the unit for residential purposes.

(b)  After a tenant receives the notice and moves out:

(1)  the local health officer or building inspector may not allow occupancy of or utility service by separate meter to the rental unit until the officer certifies that he knows of no condition that materially affects the physical health or safety of an ordinary tenant; and

(2)  the landlord may not allow reoccupancy or reconnection of utilities by separate meter within six months after the date the tenant moves out.

(c)  If the landlord gives the tenant the notice closing the rental unit:

(1)  before the tenant gives a repair notice to the landlord, the remedies of this subchapter do not apply;

(2)  after the tenant gives a repair notice to the landlord but before the landlord has had a reasonable time to make repairs, the tenant is entitled only to the remedies under Subsection (d) of this section and Subdivisions (3), (4), and (5) of Subsection (a) of Section 92.0563; or

(3)  after the tenant gives a repair notice to the landlord and after the landlord has had a reasonable time to make repairs, the tenant is entitled only to the remedies under Subsection (d) of this section and Subdivisions (3), (4), and (5) of Subsection (a) of Section 92.0563.

(d)  If the landlord closes the rental unit after the tenant gives the landlord a notice to repair and the tenant moves out on or before the end of the rental term, the landlord must pay the tenant’s actual and reasonable moving expenses, refund a pro rata portion of the tenant’s rent from the date the tenant moves out, and, if otherwise required by law, return the tenant’s security deposit.

(e)  A landlord who violates Subsection (b) or (d) is liable to the tenant for an amount equal to the total of one month’s rent plus $100 and attorney’s fees.

Use Lease Provisions

The lease may include provisions in it that give the landlord the right to terminate the lease and require the tenant to move out at a certain date. This is the issue facing the Houston Housing Authority and its “eviction” of seniors from 2100 Memorial. (You can read more about that here.)

While there are other concerns about the termination of this particular lease the landlord likely included a provision within the lease that gave it the right to terminate with five days notice if the health and safety of the residents was a concern. This provision is also included in the lease promulgated by the Texas Apartment Association. While this may be a heavy-handed provision (especially in post-Harvey conditions), the lease does provide the landlord with the right to do this. Unfortunately, the right is only fettered by the media.

Use Caution in Terminating Under Lease Provisions

As either a landlord or tenant, exercise caution when terminating a lease based on provisions that differ from the Texas Property Code. Throughout the Property Code, the legislature established certain requirements for waiver of the protections provided by the Code. If the landlord attempts to enforce a provision without the appropriate waiver, the landlord is typically liable for attorneys’ fees and court costs incurred by the tenant.

Cassie McGarvey

Cassie McGarvey

Leave a Reply