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Legal Questions and Answers
By: Israel L. Suster
Editor's note: the purpose of this column is to provide information with respect to current legal developments and topics of general interest. No attempt is made to offer solutions to specific problems. An attorney of your choice should be consulted for advice on particular questions relating to your situation.
Inevitably, changing circumstances and fact-sensitive questions lead to legal conclusions and results that are not discussed here. The following is only a general summary of Texas law and may be inappropriate for a specific situation.
This month's column was prepared by Israel L. Suster: (972)380-0130 (direct line) email – office@susterlaw.com
Question:
We have an apartment complex near Galveston, Texas, which received substantial flooding due to the Hurricane. We have many residents with whom we have already terminated leases. However, we have several residents with whom we have not heard back from and are not sure that they have ever returned to their apartments. We would like to get the units back in order to repair the property. What should we do?
Answer:
The first thing to do is to be sure that the residents are not in fact living in any of those units. If the residents do not answer the door, then leave a note on the inside of the front door requesting that they please contact you immediately. Obviously, if rent has not been paid, this is a good indication that the resident is not likely living in the apartment. Certainly, the failure to pay rent is a basis for terminating a lease. Assuming there is an abandonment by the resident, you will need to check your lease as to any required determinations and actions for an abandonment. Such procedures may vary, based upon the TAA Lease versions. Generally, it is important that the notification left on the inside of the main door specifically state that the landlord considers the apartment abandoned. Once you have followed the abandonment procedures in your leases, you may clean out the contents of the units.
Question:
We have residents who have abandoned their apartments after the Hurricane. We are holding security deposits on behalf of such residents. Must we refund the deposits?
Answer:
Not if monies are owed to you and the leases have not been terminated. If your policy will be to retain the security deposits, you should attempt to send an accounting for the deposits within a period of thirty days after the abandonment in accordance with your leases and the Texas Property Code. Under Texas law, the landlord is not obligated to return a resident’s security deposit or give the resident a written description of damages and charges until the resident gives the landlord a written statement of the resident’s forwarding address for the purpose of refunding the security deposit. It is important to note that the failure to provide such forwarding address does not act as an automatic forfeiture of any right of a resident to receive a description of damages and charges merely for failing to give a forwarding address. Consequently, in such cases, it is good practice to simply send the statement of accounting to the last known address, typically, to the property (apartment) in question.
Question:
We have an apartment complex that was substantially damaged due to the Hurricane. We have elected to close the entire property in order to facilitate repairs to the property. We have several hundred residents with deposits. Because of the massive number of residents, in order to handle any accounting, it will take us substantially more than thirty days to refund the security deposits. Are we going to be liable for failing to timely refund deposits after the residents have surrendered their apartments?
Answer:
Damages by hurricanes are typically considered “Acts of God” and are obviously unusual circumstances. Section 92.109 of the Texas Property Code, sets forth the landlord’s liability for not refunding a security deposit to a resident. Liability is stated in terms of retaining the security deposit in bad faith. Consequently, delayed refunds and deposits due to logistical issues as a result of a hurricane should not be deemed to violate any bad faith standard. Certainly, that is not to say that a landlord could never be held to be in bad faith for failing to refund a security deposit after the occurrence of a hurricane.
Question:
We had some damage to our apartment complex as a result of the Hurricane. Initially, we allowed all of the residents to return back to the property. However, it appears that some of our units have sustained damage as a result of mold and it will be necessary that some of the residents will need to be vacated in order to repair the units. Can we terminate their leases?
Answer:
Yes, you should be able to terminate their lease under the TAA Lease. If you believe that fire or catastrophic damage is substantial, or that performance of the needed repairs poses a danger to the residents (such as because of mold contamination), you may terminate the lease by giving the residents at lease five written days notice. Of course, if you terminate the lease, you will need to refund pro-rated rents and all deposits, less any lawful deductions.
Question:
After the Hurricane, some of our apartments sustained some minor flooding. As a result, we had to have various utilities turned off in order to make minor repairs. Residents have asked us for an abatement or reduction in the rents for the time the utilities were off (several days). Do we have to abate or refund any of their rents?
Answer:
Under the TAA Lease, you should not be responsible for such interruptions. In addition, you are not obligated to abate rent in whole or in part. Of course, if you are using older leases or some other types of leases, you will want to verify the language in the lease contracts. Though you may not be required to refund, as a practical matter, refunds or abatement of rents because of repairs under these circumstances can go along way for client relations. As a practical matter, you may want to check with your insurer to see if you can recoup any loss of rents under your insurance policy.
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