ANTI-WAIVER PROVISION IN LEASE HOLDS UP IN SUPREME COURT

In this forcible-detainer action, a commercial landlord sought to oust a long-term tenant by refusing to accept the tenant’s option to renew based on the tenant’s failure to timely pay rent.   Although the tenant frequently defaulted on the lease’s rental-payment terms, the landlord regularly accepted the tenant’s rental payments when tendered and without protest. The lease between the parties contained a non-waiver clause, stating that the landlord’s “acceptance of late installment of Rent shall not be a waiver and shall not estop Landlord from enforcing that provision or any other provision of [the] lease in the future”; “all waivers” must be “in writing and signed by the waiving party”; and any forbearance of enforcement shall not be construed to constitute a waiver.   The tenant argued, nevertheless, that by its own conduct, the Landlord intentionally waived this provision.

Both the justice court and the county court ruled in favor of the tenant.  But, the Texas Supreme Court, reversed, holding, “we can say with certainty that accepting late rental payments could not waive the parties’ agreement that contractual rights, remedies, and obligations will not be waived on that basis, especially when the lease provides a specific method for obtaining a waiver.”
Shields Ltd. P’ship v. Bradberry, 526 S.W.3d 471, 484 (Tex. 2017), reh’g denied (Sept. 22, 2017).
Advertisements

Texas Supreme Court upholds TAA lease provision

The Texas Supreme Court, in a 5-4 decision, recently held enforceable a provision in a  Texas Apartment Association approved lease that requires a tenant to reimburse a landlord for damage or cost of repairs that were not due to any negligence of the tenant.  Philadelphia Indem. Ins. Co. v. White, No. 14-0086, 2016 WL 2848487 (Tex. May 13, 2016).

This case arose out of a fire that started in the tenant’s dryer and caused damage to several units in the apartment complex.  The jury found the damage was not caused by the negligence of the tenant, but did find that she breached Section 12 of the Contract and thus would be responsible for the cost of repairs.

The provision in the lease stated  in pertinent part:

Section 12

DAMAGES AND REIMBURSEMENT. You must promptly pay or reimburse us for loss, damage, consequential damages, government fines or charges, or cost of repairs or service in the apartment community due to: a violation of the Lease Contract or rules; improper use; negligence; other conduct by you or your invitees, guests or occupants; or any other cause not due to [the landlord’s] negligence or fault. You will indemnify and hold us harmless from all liability arising from the conduct of you, your invitees, guests, or occupants, or our representatives who perform at your request services not contemplated in this Lease Contract. Unless the damage or wastewater stoppage is due to our negligence, we’re not liable for–and you must pay for–repairs, replacements and damage to the following if occurring during the Lease Contract term or renewal period: (1) damage to doors, windows, or screens; (2) damage from windows or doors left open; and (3) damage from wastewater stoppages caused by improper objects in lines exclusively serving your apartment.
(emphasis added)
The Defendant argued, among other things, that  this provision was unenforceable because it conflicted with the Texas Property Code provision that shifted responsibility for repairs to the landlord, citing  Section 92.052   The Supreme Court disagreed, holding that although the landlord has certain obligations to make repairs for normal wear and tear, etc., it is not obligated to make repairs for damage caused by the tenant. Thus, the landlord’s repair duties are only activated when the landlord has a statutory duty to repair – which it did not have in this case.  Absent a statutory restriction, the parties are free to contract as they wish.
Circumstances like this certainly make the case for renter’s insurance.

SUBSTITUTE TRUSTEE’S DEED NOT IN EVIDENCE

This recent case highlights the importance of making sure all exhibits are actually admitted into evidence during the trial. Here, the record on appeal did not contain the substitute trustee’s deed evidencing the landlord’s ownership of the property in an eviction proceeding. However, because both parties referred to the document during the course of the trial, the court held “for all practical purposes,” it was admitted into evidence. See Martin v. Federal Nat. Mortg. Ass’n 2014 WL 3057389, 4 (Tex.App.-Dallas) (Tex.App.-Dallas,2014).

RECENT CASE LAW ON REQUIREMENT OF NOTICE TO VACATE

Landlords and property managers take note of this recent case which holds that a landlord’s “Notice of Proposed Termination of Occupancy” given to a HUD tenant does not meet the statutory requirement of a Notice to Vacate under Tex. Property Code Section 24.005.  Briones v. Brazos Bend Villa Apartments, 14-12-01125-CV, 2014 WL 2945979 (Tex. App. July 1, 2014).

PROPERTY MANAGEMENT SEMINARS

If you want to learn more about the basics of evictions and the challenges in managing rental properties, I will be hosting two seminars for property managers, landlords, and real estate professionals on these topics.

Houston, Texas – August 18, 2014   “Eviction Basics”  3 hours MCE credit available.

Austin, Texas – August, 27, 2014    “Stuff Happens – How to handle unexpected challenges in managing rental properties.” (non-MCE)

Please contact me for more information if you are interested in attending either of these seminars.

BEST PRACTICES FOR MINIMIZING LIABILITY

 

Make repairs to keep property safe and free of safety hazards

The law in Texas provides that in general, a landlord does not have a duty to tenants or their guests for dangerous conditions on the leased premises.  This rule stems from the theory that the landlord relinquished possession of the premises to the tenant.  However, THERE ARE EXCEPTIONS to this rule.  First, a landlord may be liable for injuries caused by a defect on any portion of the premises that remains under the landlord’s control, such as common areas or public stairs.  Second, if the landlord is aware of concealed defects within the leased premises and fails to warn the tenant or make them safe, the landlord may be liable for injuries caused by the concealed defects.  Finally, if the landlord agrees to make repairs, the landlord then owes a duty to exercise ordinary care in making those repairs.