HBA-EDN, CCH H.B. 557 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 557
By: Dukes
Business & Industry
7/20/2001
Enrolled



BACKGROUND AND PURPOSE 

Prior to the 77th Legislature, Texas had fewer laws and regulations
governing the relationship between a landlord and a tenant of a
manufactured home community (community) than there were for the rental of
other types of properties.  As a result, many Texas tenants of a community
endured unfair rental practices, including surprise rent increases, unfair
or retaliatory evictions, harassment of tenant organizations, and
month-to-month rentals without a lease agreement.  House Bill 557 requires
landlords to provide tenants with a lease agreement and a current copy of
community rules, requires landlords to maintain a healthy, safe, and
functional community, prohibits landlords from entering tenants' homes
without specified justifiable reasons, prohibits landlords from interfering
with tenants' meetings, and sets forth acceptable grounds for eviction. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 557 amends the Property Code relating to the relationship
between a landlord and a tenant who leases property in a manufactured home
community  for the purpose of situating a manufactured home or recreational
vehicle on the property.  The bill does not apply to the relationship
between a tenant who leases a manufactured home from the landlord, a
landlord and an employee or agent of the landlord, a landlord who leases
property in the community and a tenant who leases the property for the
placement of personal property to be used for human habitation, excluding a
manufactured home or a recreational vehicle (Sec. 94.002).     

The bill authorizes a landlord to adopt community rules that are not
arbitrary or capricious and to add to or amend such rules, but requires
that a landlord give the tenant at least 90 days to comply with the rule if
the change will require the tenant to expend funds in excess of $25 (Sec.
94.008).  At the time a landlord receives a prospective tenant's
application, the landlord is required to provide  a copy of the proposed
lease agreement, any community rules, and a separate disclosure statement
of the tenant's legal rights (Sec. 94.051).  A landlord is required to
offer the tenant a lease agreement with an initial lease term of at least
six months, unless the tenant and landlord agree on a different lease term.
The bill provides that the landlord must provide notice to the tenant,
regardless of the term of the lease, not later than the 60th day before the
date of the expiration of the lease if the landlord does not renew the
lease (Sec. 94.052).   

The bill specifies the information a lease agreement is required to contain
and requires the landlord to provide the tenant with a copy of the lease
agreement and a current copy of the community rules.  The bill provides
that any illegal or unconscionable provision in a lease is void but that
the invalidity of a provision does not affect other provisions of the lease
that can be given effect without reference to the invalid provision.  A
landlord may prohibit a tenant from assigning a lease agreement or
subleasing the leased premises if the prohibition is included in the lease
agreement, but if the landlord permits a tenant to assign a lease agreement
or sublease the leased premises, the lease agreement must specify the
conditions under  which the tenant may enter into an assignment or sublease
agreement (Secs. 94.053 and 94.057).  The bill requires a tenant to
disclose to the landlord before the lease agreement is signed the name and
address of any person holding a lien on the tenant's manufactured home.
The bill sets forth provisions regarding notice of a lease renewal  (Secs.
94.054 and 94.055).      

The bill prohibits a landlord from entering a tenant's home except in a
case of emergency, a tenant's abandonment of the home, or when the tenant
is present and consents or provides prior written consent for a specified
date and time.  The tenant is authorized to revoke the consent through
written notification without a penalty (Sec. 94.004).  The tenant is
required to notify the landlord in writing of any change in the tenant's
primary residence.  If the tenant makes the request at the signing of the
lease agreement or renewal, the landlord is required to mail all notices
required by the lease agreement to the tenant's primary residence.
Provisions regarding notice by mail do not apply if the notice is hand
delivered to and received by a person 16 years of age or older occupying
the leased premises (Sec. 94.009). 

A landlord is authorized to terminate the lease agreement and evict a
tenant if the tenant fails to timely pay rent or other amounts due under
the lease that in the aggregate equal the amount of at least one month's
rent, the landlord notifies the tenant in writing that the payment is
delinquent, and the tenant has not paid the delinquent payment in full
before the 10th day after the date the tenant receives the notice.  A
landlord is also authorized to terminate the lease agreement and evict the
tenant if the tenant violates a lease provision, including a community rule
incorporated in the lease (Secs. 94.205 and 94.206).  A landlord is
required to refund all or a portion of the security deposit unless the
tenant fails to fulfill the lease agreement or there are damages or charges
for which the tenant is legally liable.  The bill sets forth provisions
regarding the liability of a landlord for such a deposit and for procedures
after the cessation of a community owner's interest in the premises (Secs.
94.103-94.109). 

The landlord is required to maintain a healthy, safe, and functional
community and to make a diligent effort to repair or remedy conditions
materially affecting the health or safety of a tenant, except for a
condition present in or on a tenant's manufactured home.  The bill provides
that the tenant has the burden of proof in a judicial action to enforce a
right resulting from the landlord's failure to repair such a condition,
except that the landlord has the burden of proof if the landlord does not
provide a written explanation for delay in performing the repair.  The bill
sets forth provisions regarding a landlord's liability for maintenance and
repair requirements and provides that if  the landlord is liable to a
tenant, the tenant is authorized to remedy the condition and deduct the
cost from a subsequent rent payment unless the cost exceeds $500 or the
cost of a month's rent, whichever is greater.  The bill also sets forth
provisions regarding casualty loss (Secs. 94.152-94.157).   

The bill provides that repairs based on a tenant's notice must be made by a
company, contractor, or repairman that advertises in a telephone directory
or newspaper in the manufactured home community's municipality or county or
adjacent county (Sec. 94.157). A landlord is prohibited, within six months
after the date a tenant exercises a remedy, from retaliating against a
tenant who exercises a remedy granted by the lease agreement or by law,
requests a repair, or complains to a relevant authority of the condition of
the community (Sec. 94.251).  The bill provides that the tenant must delay
contracting for repairs if the landlord delivers to the tenant a sworn
affidavit summarizing the reasons for the delay and the diligent efforts to
complete the repairs and sets forth provisions regarding such an affidavit
(Sec. 94.158).     

The bill sets forth provisions regarding a tenant's judicial remedies if a
landlord is liable for maintenance and repair requirements.  The bill also
sets forth provisions regarding a landlord's remedy if a tenant withholds
rent, causes repairs to be performed, or makes rent deductions for repairs
in violation of the bill (Secs. 94.159 and 94.160). 

The bill provides that each common area facility must be available to
tenants (Sec. 94.005).  A landlord is prohibited from interfering with
tenants' meetings related to manufactured home living.  Any limitation on
meetings must be included in the community rules (Sec. 94.006). The bill
specifies penalties for a landlord who violates these provisions, and for a
tenant who files a suit in bad faith or for purposes of harassment. A
specific remedy provided by this bill supersedes the general remedy
provided for a tenant or a landlord  and is in addition to any other remedy
provided by law (Secs. 94.301- 94.303). 

The bill provides that the maximum amount a landlord may recover as damages
for a tenant's early termination of a lease agreement is an amount equal to
the amount of rent that remains outstanding for the term of the lease and
any other amounts owed for the remainder of the lease under the terms of
the lease, except that the maximum amount is the equal of one month's rent
if the tenant's manufactured home lot is reoccupied before the 21st day
after surrender.  A landlord has a duty to mitigate damages if a tenant
vacates the lot before the end of the lease term (Secs. 94.201 and 94.202).

The bill authorizes the owner of a manufactured home to sell a home located
on the leased premises if the purchaser is approved in writing by the
landlord and a lease agreement is signed by the purchaser.  The bill
prohibits a landlord from requiring the owner to contract with the landlord
to act as an agent or broker in selling the home or requiring the owner to
pay a commission or fee from the sale of the home if the owner of the
manufactured home has not agreed in writing (Sec. 94.252). 

The bill also sets forth provisions regarding a landlord's disclosure of
information about ownership and management, eviction procedures, a
landlord's authorization to terminate a lease for a change in land use,
cash payment procedures, nonretaliation, a tenant's remedies for
retaliation by a landlord, invalid complaints, and the filing of a law suit
against a landlord, as it relates to the authorized agent for service of
process (Secs. 94.010,  94.203, 94.204, 94.007,  94.011, and
94.253-94.256).   

A provision in a lease agreement or a rule in the community that purports
to waive a right or to exempt a landlord or a tenant from a duty or from
liability in this bill is void (Sec. 94.003). 

EFFECTIVE DATE

April 1, 2002.