The Texas Realtors Residential Lease

Introduction

There is no standard residential lease form in Texas, at least not in the sense that any particular form is required. The State Bar of Texas offers a residential lease, as does the Houston Association of Realtors. Many real estate lawyers have their own custom-drafted leases they use for their clients. The parties may agree to a custom lease of their own.

The Texas Realtors Residential Lease (form TXR-2001 dated 7-08-22) is widely used and often presented by landlords and real estate agents as a mandatory form that tenants should sign without question or amendment—even though paragraph 34K states in bold “This lease is negotiable between the parties.” In times when landlords have relative bargaining power, the pressure is upon the tenant to simply sign the standard form.

The TXR lease is a landlord-oriented instrument. It contains provisions to which no renter should (in a perfect world) ever agree. As a practical matter, however, the negotiability of any lease, including the TXR lease, is a function of market forces, especially the power dynamic existing between landlord and tenant in a given market.

When tenants are the weaker party, it is common for Texas landlords to declare that they “will not accept any changes to the standard form” notwithstanding that form’s express negotiability. Accordingly, the viability of a residential tenant’s negotiating strategy—and the receptiveness of a landlord to lease amendments—is likely to be case-by-case.

This article examines the TXR lease in light of Chapter 92 of the Property Code which governs residential tenancies. The goal is to highlight deficiencies in the TXR lease and suggest the addition of several special provisions as a remedy.

PROPERTY CONDITION

Whether one is leasing or buying real estate, property condition is a central concern. In a purchase, the prospective buyer is usually allowed an option period to conduct inspections. This is not industry practice in residential leasing. Inspection by a prospective tenant is a superficial tour that could fail to reveal any number of serious conditions or defects.

Not only is there no pre-lease inspection, there is no duty on the part of the landlord to provide a statutory disclosure of property condition as is the case with residential sales. Accordingly, representations and warranties made by the landlord—or more critically, not made—become relevant.

TXR Lease is “As Is”

The TXR lease application (form 2003 dated 07-08-22) states that the “Landlord makes no express or implied warranties as to the Property’s condition.” A prospective tenant is therefore advised of this limitation at the outset.

Paragraph 15A of the TXR lease adds “Tenant accepts the Property ‘as is’ and Landlord is under no obligation to make any changes upon Tenant viewing the Property.” Any change the tenant may want to make to this provision (including an agreement by the landlord to make repairs) must be inserted into paragraph 15B or it is waived.

As is true with residential sales, the lease of a property “as is” should be a consciously negotiated term and not an automatic default driven by a form. Widespread industry practice runs counter to this logic and encourages residential tenants to sign a “standard form” that is neither standard nor required.

Tenant Expectations of Property Condition

Does leasing a residence “as is” (with all faults) reflect the reality of what real-world tenants expect? Does not the average tenant justifiably assume that the property is in decent condition and that the electricity and plumbing actually work?

Yet the express terms of the TXR lease contradict these expectations. The property is leased in entirely “as is” condition with no assurances that major systems (such as water or the HVAC) are in good condition and working order. The roof may leak, the plumbing may be obstructed, and the walls may be full of mold; still, the landlord makes no assurances regarding any of these matters. As such, the neo-feudal conveyance of an “as is” leasehold with minimal landlord repair and maintenance duties is glaringly inconsistent with the expectations of residential tenants.

Unless overridden by statute or public policy, contractual provisions in Texas are given their plain meaning. The phrases “as is” and “no express or implied warranties” mean exactly what they say. Caveat emptor is alive and well in Texas residential leasing.

Landlord’s Duty to Disclose

Even though a landlord may lease a residential property “as is” and without assurances as to property condition, a residential landlord in Texas is obligated to disclose defects and other material facts that could reasonably affect the tenant’s decision to lease or not the lease the property (Deceptive Trade Practices Act, Chap. 17, Tex. Bus. & Com. Code). As with residential sales, the duty to disclose known defects, material facts, and adverse conditions in residential leasing applies notwithstanding that the transaction may be “as is” and without representation or warranty.

Unfortunately, there are many sellers and landlords (and even their agents) who have not gotten the message. There is no clause (including an “as is” clause) that can lawfully be included in a residential sales contract or residential lease that enables or permits non-disclosure of known defects, material facts, and adverse conditions.

Proposed Custom Clauses Regarding Property Condition

How might the addition of special provisions better align the TXR lease with tenant expectations? Two proposed custom clauses may help:

Property Condition. Unless otherwise expressly agreed, Landlord agrees to deliver all major systems on the Property (including electrical, mechanical, plumbing, HVAC, foundation, and roof) and appliances (if any are included) in good and working condition with no known material problems, defects, needed repairs, or deferred maintenance that are not fully disclosed to Tenant in advance of lease signing.

Landlord’s Duty of Disclosure. Landlord acknowledges a legal duty to disclose known defects, material facts, and adverse conditions on the Property in advance of lease signing. This duty of disclosure applies notwithstanding that the Lease may be “as is” and without warranty, express or implied. (Refer to the Deceptive Trade Practices Act, Chap. 17 of Tex. Bus. & Com. Code.) Tenant is relying upon Landlord’s obligation to make full disclosure. Were this not the case, Tenant would not agree to lease the Property. Unless expressly disclosed herein, Landlord has no disclosures to make about known defects, material facts, needed repairs, hazards, deficiencies, or adverse conditions on the Property. Landlord knows of none of these that have not already been fully disclosed. There are no known termites, wet sheetrock, or mold.

UTILITIES

A residence is useless without electricity and water, yet nothing in the TXR lease obligates the landlord to deliver the property with utilities on. In fact, paragraph 11 of the lease states in bold that the landlord makes no warranty that utilities are even available. A custom addendum could address this issue with the following:

Utilities. Utilities (electric, water, and gas if any) will be on and working at move-in. Tenant is allowed up to 3 business days to change these into Tenant’s name.

What happens if through no fault of the tenant utilities cease to be provided to the property during the lease term? Here is a proposed special provision:

Cessation of Utilities. If water, electricity, gas, or the HVAC unit are not working for any reason (other than the fault of Tenant) for 10 consecutive days or for 20 days (consecutive or not) within any 30-day period, then the Lease will terminate automatically without requirement of termination notice or payment of fees by the Tenant and without forfeiture of tenant’s deposit or harm to Tenant’s credit. After such termination, Tenant will have no further obligation to occupy or pay rent on the Property. Tenant shall NOT have a duty to repair, remediate, or restore the Property after such a utility failure.

LANDLORD’S DUTIES AS TO REPAIRS AND MAINTENANCE

No General Duty to Repair or Maintain

The TXR lease does not include a general duty on the part of the landlord to make routine repairs, perform routine maintenance, or otherwise keep the property in good condition. This stunning fact is true even though paragraph 18 the TXR lease requires the tenant to notify the landlord of needed repairs. There is thus a tenant duty to notify, but no general duty on the part of the landlord to act in response.

Surprisingly, the only party expressly obligated under the TXR lease to maintain the property is the tenant (see paragraphs 17 and 18). Paragraph 17A describes “Tenant’s General [Maintenance] Responsibilities.” There is no comparable paragraph that describes maintenance or repair responsibilities on the part of the landlord. Except for 17B(3)(a) which offers an option (a box to check) if the landlord is to maintain the yard, a general duty of the landlord to repair or maintain the property is absent from the TXR text.

Material Effect on Tenant Health or Safety

Under the TXR lease (and Texas law generally), a landlord’s duty to repair arises only in the narrowest situations, when a condition materially affects the physical health or safety of an ordinary tenant—and then only after proper notice:

Prop. Code Sec. 92.052. Landlord’s Duty to Repair or Remedy

(a) A landlord shall make a diligent effort to repair or remedy a condition if: (1) the tenant specifies the condition in a notice to the person to whom or to the place where rent is normally paid; (2) the tenant is not delinquent in the payment of rent at the time notice is given; and (3) the condition: (A) materially affects the physical health or safety of an ordinary tenant; or (B) arises from the landlord’s failure to provide and maintain in good operating condition a device to supply hot water of a minimum temperature of 120 degrees Fahrenheit.

(b) Unless the condition was caused by normal wear and tear, the landlord does not have a duty during the lease term or a renewal or extension to repair or remedy a condition caused by: (1) the tenant; (2) a lawful occupant in the tenant’s dwelling; (3) a member of the tenant’s family; or (4) a guest or invitee of the tenant.

(c) This subchapter does not require the landlord: (1) to furnish utilities from a utility company if as a practical matter the utility lines of the company are not reasonably available; or (2) to furnish security guards.

(d) The tenant’s notice under Subsection (a) must be in writing only if the tenant’s lease is in writing and requires written notice.

Prop. Code Sec. 92.053. Burden of Proof

(a) Except as provided by this section, the tenant has the burden of proof in a judicial action to enforce a right resulting from the landlord’s failure to repair or remedy a condition under Section 92.052.

(b) If the landlord does not provide a written explanation for delay in performing a duty to repair or remedy on or before the fifth day after receiving from the tenant a written demand for an explanation, the landlord has the burden of proving that he made a diligent effort to repair and that a reasonable time for repair did not elapse.

Property Code Section 92.052 thus:

(1) places a minimum floor for a landlord’s repair obligations, namely the physical health or safety of an ordinary tenant; and

(2) establishes diligent effort and a reasonable time as standards for completion—but these standards apply only in extreme cases when a tenant’s physical health or safety are materially affected. They do not apply to routine repairs.

Landlord’s Discretion in Making Routine Repairs

Material effect on tenant health or safety is a high bar on the level of an emergency. Otherwise, the landlord under a TXR lease may disregard the tenant’s repair requests with impunity. Paragraph 18C(1) of the lease states that “All decisions regarding repairs, including the completion of any repair, whether to repair or replace the item, and the selection of contractors, will be at Landlord’s sole discretion.”

The landlord can lawfully ignore routine repair requests as to (for example) the washing machine, the disposal, minor roof or water leaks, and even the air conditioning since paragraph 18A states that a/c repair is not ordinarily an emergency (an absurdity on its face in a Texas summer). The position of the TXR lease on the landlord’s obligation to repair and maintain can be summarized as follows: Routine repair and maintenance issues that do not materially affect the physical health or safety of an ordinary tenant may be addressed (if at all) entirely at the discretion of the landlord and without remedy or recourse on the part of the tenant.

The tenant has no ready remedy or recourse under the TXR lease if the landlord fails to make routine repairs. There are no lease provisions to cite, no steps for a tenant to take, no regulatory body with which to file a complaint. Meanwhile, full rent continues to accrue. Unless a repair materially affects the physical health or safety of an ordinary tenant (an extreme case), a Texas landlord can take months to perform routine repairs—or avoid making such repairs at all.

Paragraph 18D does provide that the landlord will pay for repairs occurring as a result of the HVAC system, the water heater, and water penetration from structural defects. However, this section must be read in the context of the overall document—specifically paragraph 18C(1) which provides that repairs are made (if at all) at the landlord’s sole discretion. Accordingly, the TXR lease effectively states: The landlord will pay for certain routine repairs if, in the landlord’s sole discretion, he chooses to make them at all.

Finally, note paragraph 18 of the TXR lease: “If Tenant is delinquent in rent at the time a repair notice is given, Landlord is not obligated to make the repair.”

The TXR lease appears to assume that a landlord’s desire to preserve his property’s value will be sufficient to incentivize repairs and maintenance. A landlord who does not do repairs or maintenance would appear to be relying on paragraph 16A of the lease which requires the tenant to surrender the property in the same condition as when it was received, normal wear and tear excepted. If compliance with this provision requires the tenant to make significant repairs, then so be it.

In summary, as to the landlord’s obligation to repair and maintain, the TXR lease:

(1) does NOT state a general duty on the part of the landlord to make routine repairs or maintain the property in good condition during the lease term;

(2) does NOT state a specific standard for whether repairs are required unless the condition is extreme enough to materially affect the physical health or safety of an ordinary tenant;

(3) does NOT clearly and comprehensively allocate specific repairs or maintenance as being the obligation of landlord versus the tenant;

(4) does NOT provide that certain critical repairs are a priority (air conditioning or availability of water, for example); and

(5) does NOT specify a reasonable or required time for completion of a routine repair.

The Property Code does not come to the tenant’s rescue on any of these points.

Tenant’s Repair and Deduct Remedy

Property Code Chapter 92 includes a highly restricted repair and deduct remedy in Section 92.0561. The tenant may contract (on his own) to make certain repairs only if: (1) the landlord has failed in his duty under Section 92.052 to remedy a condition that materially affects the physical health or safety of an ordinary tenant—i.e., in extreme situations, not circumstances that involve less urgency; (2) proper written notice has been given; (3) the landlord has failed to make the repair within a reasonable time or has not made a diligent effort; and (4) the tenant is not delinquent in rent. For purposes of determining what constitutes a reasonable time, Section 92.056(b)5(d) specifies a presumption of 7 days but that is easily rebuttable by the landlord.

The remedy of repair and deduct is seldom effectively invoked in the real world—not just because it is cumbersome to execute but because most families are forced out by a serious habitability issue by the time this remedy can be implemented. They are already living somewhere else. Also, tenants understandably hesitate to spend their own limited funds on a property owned by a wealthier landlord, particularly when the repair involves thousands of dollars. Finally, by the time repair and deduct becomes available, the parties are almost always personally at odds and the situation has collapsed into acrimony and threats of litigation. Neither party is interested in working together anymore. Accordingly, as a practical tenant tool, the repair and deduct statute is sub-optimal and largely ineffective.

Proposed Custom Clause Regarding Landlord’s Repair Duties:

The omission by the TXR lease of any general duty on the part of the landlord to repair and maintain the property is a problem for a tenant. No renter wants to encounter the need for a serious repair and then discover that the lease does not require the landlord to act. A solution is to include a special provision along the following lines:

Landlord Repairs and Maintenance. Except for repairs that are expressly made the responsibility of Tenant in the Lease, Landlord has a general duty to promptly and professionally repair and maintain all major systems on the Property (including electrical, mechanical, plumbing, HVAC, foundation, and roof) and appliances (if any are included) in good and working condition. HVAC FAILURE IS CONSIDERED AN EMERGENCY REQUIRING PROMPT REPAIR ACTION COMMENCING WITHIN 24 HOURS. In such an HVAC emergency, or if Tenant cannot reach Landlord, Tenant may advance the cost of professional licensed HVAC repair and receive credit against the next month’s rent. Landlord may designate an authorized repairperson for such contingencies.

TENANT’S DUTIES AS TO REPAIRS AND MAINTENANCE

Tenant Duties under the TXR Lease

The TXR lease addressing the tenant’s obligations in this area are contained in paragraphs 17 and 18. Oddly, other than an admonition to keep the property clean and sanitary, the lease states no general duty of care on the part of the tenant or obligation to avoid waste and damage. Instead, paragraph 17 lists specific obligations and specific prohibitions. Obligations are:

17A. Tenant’s General Responsibilities: Tenant, at Tenant’s expense, must:

(1) keep the Property clean and sanitary;
(2) promptly dispose of all garbage in appropriate receptacles;
(3) supply and change heating and air conditioning filters per manufacturer’s instructions;
(4) supply and replace all light bulbs, fluorescent tubes, and batteries for smoke alarms, carbon monoxide detectors, garage door openers, ceiling fan remotes, and other devices (of the same type and quality that are in the Property on the Commencement Date);
(5) maintain appropriate levels of necessary chemicals or matter in any water softener;
(6) take action to promptly eliminate any dangerous condition on the Property;
(7) take all necessary precautions to prevent broken water pipes due to freezing or other causes;
(8) replace any lost or misplaced keys;
(9) pay any periodic, preventive, or additional extermination costs desired by Tenant, including treatment for bed bugs, unless otherwise required by law;
(10) remove any standing water;
(11) know the location and operation of the main water cut-off valve and all electric breakers and how to switch the valve or breakers off at appropriate times to mitigate any potential damage;
(12) water the foundation of the Property at reasonable and appropriate times;
(13) supply and change water filtration systems, including but not limited to, refrigerator water filters; and
(14) promptly notify Landlord, in writing, of all needed repairs.

Paragraph 17B adds that the duty of watering and “mowing, fertilizing, and trimming the yard; (b) controlling pests and weeds in the yard; and (c) removing debris from the yard” unless the parties expressly agree that the landlord will maintain the yard.

Tenant prohibitions are:

17D. Prohibitions: If Tenant installs any fixtures on the Property, authorized or unauthorized, such as additional smoke alarms, additional carbon monoxide detectors, locks, alarm systems, cables, satellite dishes, or other fixtures, such fixtures will become the property of the Landlord. Except as otherwise permitted by law, this lease, or in writing by Landlord, Tenant may not:

(1) remove any part of the Property or any of Landlord’s personal property from the Property;
(2) remove, change, add, or rekey any lock;
(3) make holes in the woodwork, floors, or walls, except that a reasonable number of small nails may be used to hang pictures in sheetrock and grooves in paneling;
(4) permit any water furniture on the Property;
(5) install additional phone or video cables, outlets, antennas, satellite receivers, or alarm systems;
(6) alter, replace or remove flooring material, paint, or wallpaper;
(7) install, change, or remove any: fixture, appliance, or non-real-property item listed in Paragraph 2;
(8) keep or permit any hazardous material on the Property such as flammable or explosive materials;
(9) keep or permit any material or item which causes any liability or fire and extended insurance coverage to be suspended or canceled or any premiums to be increased;
(10) dispose of any environmentally detrimental substance (for example, motor oil or radiator fluid) on the Property;
(11) cause or allow any lien to be filed against any portion of the Property; or
(12) disconnect or intentionally damage any carbon monoxide detector, or otherwise violate any local ordinance requiring a carbon monoxide detector in the Property.

Instead of stating a general tenant duty of care, the TXR lease would appear to rely on paragraph 16’s surrender clause: “When this lease ends, Tenant will surrender the Property in the same condition as when received, normal wear and tear excepted. Tenant will leave the Property in a clean condition free of all trash, debris, and any personal property.”

Proposed Special Provision

From the landlord’s point of view, the TXR lease could be substantially improved with a special provision that broadens and clarifies the tenant’s general duty of care:

Tenant Repairs and Maintenance. Tenant has a general duty of reasonable care with respect to the Property along with the obligation not to cause or permit waste or damage and to promptly report material repair and maintenance issues to Landlord. Tenant’s general maintenance obligations under paragraphs 17 and 18 of the Lease are affirmed. Tenant agrees to be responsible for and pay the cost of items listed in paragraphs 17 and 18 plus other minor routine repairs as they may arise. Minor routine repairs include any repair and maintenance tasks costing under $50.

This clause also has the virtue of specifying a dollar amount as a repair threshold (missing from the TXR lease) which is something that landlords and tenants in the real world can easily understand and implement.

CATASTROPHIC CASUALTY LOSS

The issue of what happens if the property is substantially destroyed by natural disaster (hurricane, flood, fire, or freeze) should be of interest to every residential tenant in Texas. When this occurs—and it often does—who has the duty to repair and restore the property? To what degree and in what time frame? If the home is substantially uninhabitable, does the tenant’s obligation to pay rent continue? What happens to the tenant’s security deposit?

Landlord’s Duty to Repair and Restore

The landlord has no general duty to repair and restore a catastrophically damaged residence that has been leased to a tenant. Neither the TXR lease nor the Property Code include such a requirement.

Paragraph 25 of the TXR lease merely incorporates the baseline minimum standard of the Property Code: the landlord has a duty to make repairs after a disaster ONLY if proper notice is given AND the property is total unusable as a residence AND if insurance proceeds are paid:

Prop. Code Sec. 92.054. Casualty Loss

(a) If a condition results from an insured casualty loss, such as fire, smoke, hail, explosion, or a similar cause, the period for repair does not begin until the landlord receives the insurance proceeds.

(b) 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.

(c) 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.

Several points are worth noting about this statute:

(1) the landlord has no duty to commence restoration of a damaged property unless it is totally unusuable as a residence and even then not before casualty insurance proceeds are received—which could take months;

(2) the statute appears to assume that a duty (or at least a willingness) to repair and restore exists, which is not the case with the TXR lease since the text expressly provides that repairs are made at the landlord’s sole discretion—and discretion is not a duty;

(3) the statute assumes (but does not require) that the landlord actually carries casualty insurance, and in sufficient amounts for the right category of loss—which may not be the case;

(4) the statute assumes (but does not require) that insurance proceeds will be applied to repair and restoration of the property—when it is clear that loss payees divert insurance proceeds all the time;

(5) the statute assumes that the insurer will in good faith pay the entire damage claim—when in fact payment may be partial or denied altogether; and

(6) the statute prescribes total unusability as a standard for termination—a lawsuit-spawning criterion if there ever was one.

If pipes have burst and the home is without running water and likely to remain so for weeks, is it totally unusable within the meaning of the statute? If air conditioning fails and the landlord declines to fix it, is the home totally unusable in a Houston summer? Is a tenant justified in terminating the lease in such instances? Under the express text of the TXR lease, the answer is no. Under the statute, a strict reading suggests the answer is probably not. Meanwhile, the tenant and his family may be without a place to live.

Note also that the tenant is entitled to a prorated rebate of rent monies paid only if there is a suit followed by the judgment of a county or district court. This puts the tenant in the inequitable position of filing an expensive lawsuit to secure a fair remedy that should be clearly set forth in the lease agreement.

Does the tenant have an effective walk-away remedy?

Can the tenant walk away from a heavily damaged rental home without being culpable of abandonment? Yes, but only in the most extreme circumstances, only if it is indisputable that the property is “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 . . . [in which case] either the landlord or the tenant may terminate the lease by giving written notice to the other any time before repairs are completed” (Prop. Code Sec. 92.054(b)).

Paragraph16B(3) of the TXR lease puts the Tenant in breach for abandonment (whether or not notice of termination has been given) if the Tenant walks away from a property that has not, in the opinion of the landlord, been rendered totally unusable for residential purposes. The landlord might argue that some marginal utility remains even if the property has been so seriously and substantially damaged that no normal person would choose to live in it. Result? Without a lawsuit to decide the matter, the tenant continues to be liable for rent on the damaged property even though he and his family are now out of the house and paying for other accommodations.

Tenant’s Obligation to Repair and Restore

It gets worse for the tenant. According to paragraph 16A, when the lease ends, the tenant must “surrender the Property in the same condition [italics added] as when received, normal wear and tear excepted.” This amounts to nothing less than an obligation on the part of the tenant to repair and restore a damaged property back to the condition in which it was received (normal wear and tear excepted). There is no exception to this obligation for catastrophic loss or natural disaster during the lease term. It is the tenant—not the landlord—who has an affirmative obligation to repair and restore the home to its prior condition before surrendering it, even if the home has literally burned to the ground.

Proposed Special Provision for Disaster Scenarios

These are grave flaws in the TXR lease that could portend serious financial loss for a tenant. A custom special provision can provide a solution:

Major Casualty Loss. If the Property is made substantially uninhabitable by major casualty loss or natural disaster (flood, freeze, fire, failure of the grid resulting in prolonged absence of utilities, or the like)—and the Property cannot practicably be repaired or restored to substantial habitability within 10 days—then the Lease will automatically end without culpability for abandonment and without fees to Tenant, forfeiture of Tenant’s deposit, credit damage to Tenant, or any other adverse action against Tenant so long as Tenant has fully performed the Lease up to the date of the loss or disaster. After expiration of the 10-day period, Tenant shall have no further obligation to occupy or pay rent on the Property. Tenant shall not have a duty to repair, remediate, or restore the Property after such a loss or disaster. This provision applies irrespective of the presence or absence of Landlord’s casualty insurance coverage or payment thereon.

Note that the standard employed in this suggested provision is substantially uninhabitable rather than totally unusable. This is used alongside a specific time limit, which is absent from the TXR lease.

DEATH OF A SOLE TENANT

What happens when a tenant dies?

What happens to lease obligations when a tenant dies? How should the landlord handle a deceased tenant’s personal property? The TXR lease addresses these issues in paragraph 34G:

34G. If a tenant who is the sole occupant of the Property dies before the expiration of the tenant’s lease, a representative of the estate or the person named in Paragraph 34(F) may terminate the tenant’s rights and obligations under the lease if the representative or the person named in Paragraph 34(F) provides to the Landlord written notice of the termination of the lease as required by Section 92.0162, Property Code and the deceased tenant’s property is removed from the leased premises in accordance with Section 92.014 of the Property Code and the representative or the person named in Paragraph 34(F) signs an inventory of the removed property if required by the landlord. Termination of a lease is effective on the later of: (1) the 30th day after the date on which the notice under Section 92.0162, Property Code was provided; or (2) the date on which all of the conditions in under Section 92.0162, Property Code have been met.

This language falls short of a comprehensive set of instructions on what the landlord should do when a tenant dies. Determining what is legally expected of the landlord (or the tenant’s representative) in any specific situation is a chore. It requires reading the lease and referring to at least two overlapping sections of the Property Code.

Paragraph 34G expressly incorporates the provisions and requirements of Property Code Sections 92.0162 and 92.014. These two statutes are examined next.

Core Applicable Law Part One: Prop. Code Sec. 92.0162

Section 92.0162 grants a representative of the tenant’s estate certain rights but only if written notice of termination is given, personal property is removed, and an inventory is signed:

Prop. Code Sec. 92.0162. Right to Vacate and Avoid Liability Following Tenant’s Death

(a) A representative of the estate of a tenant who dies before the expiration of the tenant’s lease and was, at the time of the tenant’s death, the sole occupant of a rental dwelling may terminate the tenant’s rights and obligations under the lease and may vacate the leased premises and avoid liability for future rent and any other sums due under the lease for terminating the lease and vacating the leased premises before the end of the lease term if:

(1) the representative provides to the landlord or the landlord’s agent written notice of the termination of the lease under this section;

(2) the deceased tenant’s property is removed from the leased premises in accordance with Section 92.014(c) or (d); and

(3) the representative signs an inventory of the removed property, if required by the landlord or the landlord’s agent.

Following the steps in Section 92.0162 achieves three things for the tenant’s heirs. The tenant’s designated representative obtains:

(1) access to the premises;

(2) the ability to remove personal possessions (likely subject to the landlord’s lien on non-exempt personal property—see below); and

(3) lease and liability termination or, as the statute says, “avoidance of liability [by the tenant’s estate] for future rent and any other sums due under the lease.”

It is worth noting several additional points:

(1) landlord obligations are triggered only if:

(a) a designated tenant representative in fact exists (designated either in paragraph 34F or by designation of the tenant pursuant to Section 92.014(b)) and said representative is willing and available to act;

(b) the deceased tenant was the sole occupant; and

(c) the named representative gives written notice of termination, removes the deceased tenant’s personal property, and signs an inventory. Unless these events occur, a landlord has few legal obligations to the tenant’s heirs, if any, at least in the absence of the appointment of an estate representative by a probate court.

(2) The balance owed under the lease is not automatically extinguished when a tenant dies. Unless a representative of the deceased tenant gives notice of termination, removes the tenant’s property, and signs an inventory (i.e., follows Section 92.0162 to the letter) the tenant’s estate is liable and continues to be liable for unpaid rent and damages in excess of normal wear and tear.

(3) The parties need not be at the mercy of this process. A custom special provisions addendum, entered into when the lease is signed, can vary and supersede the tenant death procedure to their mutual advantage.

Core Applicable Law Part Two: Prop. Code Sec. 92.014

Lease termination and property removal is not the end of the story. In order to fully understand the tenant death procedure one must also refer to Property Code Section 92.014:

Prop. Code Sec. 92.014. Personal Property and Security Deposit of Deceased Tenant

(a) Upon written request of a landlord, the landlord’s tenant shall: (1) provide the landlord with the name, address, and telephone number of a person to contact in the event of the tenant’s death; and (2) sign a statement authorizing the landlord in the event of the tenant’s death to:

(A) grant to the person designated under Subdivision (1) access to the premises at a reasonable time and in the presence of the landlord or the landlord’s agent;

(B) allow the person designated under Subdivision (1) to remove any of the tenant’s property found at the leased premises; and

(C) refund the tenant’s security deposit, less lawful deductions, to the person designated under Subdivision (1).

(b) A tenant may, without request from the landlord, provide the landlord with the information in Subsection (a).

(c) Except as provided in Subsection (d), in the event of the death of a tenant who is the sole occupant of a rental dwelling: (1) the landlord may remove and store all property found in the tenant’s leased premises; (2) the landlord shall turn over possession of the property to the person who was designated by the tenant under Subsection (a) or (b) or to any other person lawfully entitled to the property if the request is made prior to the property being discarded under Subdivision (5); (3) the landlord shall refund the tenant’s security deposit, less lawful deductions, including the cost of removing and storing the property, to the person designated under Subsection (a) or (b) or to any other person lawfully entitled to the refund; (4) the landlord may require any person who removes the property from the tenant’s leased premises to sign an inventory of the property being removed; and (5) the landlord may discard the property removed by the landlord from the tenant’s leased premises if: (A) the landlord has mailed a written request by certified mail, return receipt requested, to the person designated under Subsection (a) or (b), requesting that the property be removed; (B) the person failed to remove the property by the 30th day after the postmark date of the notice; and (C) the landlord, prior to the date of discarding the property, has not been contacted by anyone claiming the property.

(d) In a written lease or other agreement, a landlord and a tenant may agree to a procedure different than the procedure in this section for removing, storing, or disposing of property in the leased premises of a deceased tenant.

Section 92.014 uses mandatory language: although the landlord may remove and store personal property of a deceased tenant, the landlord shall turn it over to a tenant-designated representative if a request is made prior to the property being discarded. Also, the landlord shall refund the tenant’s security deposit, less lawful deductions (including the cost of removing and storing the property) to the designated representative.

Subsection (d) adds a key caveat: in “a written lease or other agreement, a landlord and a tenant may agree to a procedure different than the procedure in this section for removing, storing, or disposing of property in the leased premises of a deceased tenant.”

In other words, Section 92.014 is mandatory unless the lease says otherwise—which the TXR lease in fact does. Paragraph 34F of the lease provides that a landlord may permit access, may permit the removal of personal property, and may refund the security deposit to the tenant’s representative. The word shall is nowhere to be found in paragraph 34F. By using the word may, the word shall in the statute is quietly negated. What was obligatory under the statute becomes optional under the TXR lease, and a tenant right is converted to landlord discretion.

Under the TXR lease, may a landlord deny access and refuse to release a deceased tenant’s personal property unless the tenant’s heirs pay off the lease in full? The specific case and circumstances are always relevant; however, the answer is likely yes according to a strict reading of the TXR lease. The Property Code offers no assistance to the tenant’s heirs in such a situation.

Is death a tenant default under the TXR lease?

The answer, apparently, is yes in the following respects:

(1) unless the lease was paid in advance, there likely is (or shortly will be) a rental payment default in violation of paragraph 27B which states: “If Tenant fails to timely pay all amounts due under this lease or otherwise fails to comply with this lease, Tenant will be in default. . . . ;”

(2) the deceased tenant has effectively vacated (surrendered) the property in violation of paragraph 27D;

(3) there is a failure to surrender the property in the same condition as when it was received by the tenant, normal wear and tear excepted, as required by paragraph 16A; and

(4) the tenant’s death has left the property in an abandoned state in violation of paragraph 16.

As to the landlord’s remedies for abandonment specifically, there is no statement in the TXR lease negating these remedies merely because abandonment was caused by the tenant’s death:

(1) Property Code Section 54.044(d) provides: “If the tenant has abandoned the premises, the landlord or the landlord’s agent may remove its contents.”

(2) Paragraph 16C(1) of the TXR lease states: “If Tenant leaves any personal property in the Property after surrendering or abandoning the Property [e.g., as a consequence of dying] Landlord may: (a) dispose of such personal property in the trash or a landfill; (b) give such personal property to a charitable organization; or (c) store and sell such personal property by following procedures in §54.045(b)-(e), Property Code.”

What happens to the landlord’s lien when a tenant dies?

The TXR lease provides for a landlord’s lien in paragraph 23:

23. RESIDENTIAL LANDLORD’S LIEN: Landlord will have a lien for unpaid rent against all of Tenant’s nonexempt personal property that is in the Property and may seize such nonexempt property if Tenant fails to pay rent. Subchapter C, Chapter 54, Property Code governs the rights and obligations of the parties regarding Landlord’s lien. Landlord may collect a charge for packing, removing, or storing property seized in addition to any other amounts Landlord is entitled to receive. Landlord may sell or dispose of any seized property in accordance with the provisions of §54.045, Property Code.

In the event of tenant default, paragraph 27B(3) states that “Landlord may exercise Landlord’s lien under Paragraph 23 and any other rights under this lease or the Property Code. . . .”

Is the landlord’s lien extinguished by the tenant’s death? No. The TXR lease makes no such statement, nor does it make an exception for death as a reason for tenant default. Again, the specific case and circumstances are always relevant; however, the ability of a deceased tenant’s representative to remove personal property likely remains subject to the landlord’s lien retained in paragraph 23.

Refusal to Release Nonexempt Personal Property

Property Code Section 54.044(a) states: “The landlord or the landlord’s agent may not seize [refuse to release] exempt property and may seize nonexempt property only if it is authorized by a written lease and can be accomplished without a breach of the peace [italics added].” We should therefore look closely at the TXR lease, specifically paragraph 34F:

34F. If all occupants over 18 years of age die during this lease, Landlord may [italics added] (i) permit the person named below to access the Property at reasonable times in Landlord’s or Landlord’s agent’s presence; (ii) permit the named person to remove Tenant’s personal property; and (iii) refund the security deposit, less deductions, to the named person.

Paragraph 34F uses discretionary (not mandatory) language. A landlord may refuse just as he may permit—at his discretion. So: can a landlord lawfully refuse to release non-exempt property (a television, for example) to the tenant’s representative? Yes, so long as it does not involve a breach of the peace.

One should recall that paragraph 34F applies only to sole tenants. There is no provision at all for co-tenancies.

It is important to note that nothing stands in the way of the parties entering into a cooperative and amicable agreement to settle the matter on their own terms. Given the potential for litigation, counsel for each side should encourage such a settlement, perhaps accompanied by execution of a mutual release.

Addressing Tenant Concerns

As with other provisions of the TXR lease, deceased-tenant provisions are highly oriented in favor of the landlord. Particularly problematic from the tenant’s point of view is the substitution of may for the obligatory shall found in Property Code Section 92.014(c). The potential exists for a landlord to hold both the premises and personal property of a deceased tenant hostage until full payment is exacted from the heirs.

A tenant signing a TXR lease who is concerned with mortality and estate liability issues can achieve significant benefit by adding custom provisions that makes both the death-of-tenant procedure as well as the rights of the parties more straightforward. A suggested formulation for a sole tenant would be as follows:

Representative of Deceased Tenant. Landlord accepts designation of ___________ at __________ as the deceased Tenant’s representative (“DTR”) for all purposes including paragraph 34F of the Lease.

Death of Tenant. Upon death of Tenant (whether or not death occurs on the Property),

A. Landlord SHALL: (1) promptly notify the DTR; (2) allow the DTR prompt, full, and unimpeded access to the Property at reasonable hours (not less than usual business hours); (3) cooperate with the DTR who may remove ALL of Tenant’s belongings without hindrance or holdback and without fee or charge; and (3) account for the security deposit in regular order and refund the balance, if any, directly to the DTR at the DTR’s address.

B. Landlord SHALL NOT: (1) require the DTR to obtain court appointment or authority from others as a condition to entry or removal of Tenant’s personal property; (2) assess fees or charges as a condition of access or personal property removal; (3) exercise a landlord’s lien by withholding any personal property from the DTR; (4) demand payment from the DTR or seek to hold the DTR personally liable under the Lease; (5) exercise default remedies for early move-out or abandonment; or (6) seize, remove, sequester, store, barter, or sell any of Tenant’s personal property unless the DTR fails to remove same within 30 days of Tenant’s death. If not sooner terminated by agreement, the Lease (and the obligation to pay rent) shall entirely and automatically terminate 30 days following Tenant’s death without need for additional notice, formality, or the order of any court.

CONCLUSION

The purpose of this article has been to mention certain deficiencies in the Texas Realtors Residential Lease and to propose a remedy in the form of custom clauses that can be included in a special provisions addendum. This discussion has by no means touched upon all deficiencies of the TXR lease, nor has it mentioned all possible tenant-favorable provisions that could be included in a lease addendum. Such clauses might include (but are not limited to) an option to renew on specific terms; an early termination provision in the event of a house purchase or job relocation; limiting keybox showings at the end of the lease to one per day for 30 (and not 60) days; or permission for the tenant to make minor alterations without jeopardizing the security deposit.

The broader point is that the TXR lease is, by its own terms, entirely negotiable. Tenants and their agents should consider taking this to heart and utilizing a special provisions addendum to mitigate the landlord-oriented bias of this very one-sided instrument.

More people than ever are renting their homes in Texas and are doing so using the TXR lease. It is time for Texas Realtors to revise this document and bring it into the 21st century. It is also time for the association to admonish its members against presenting the TXR lease to prospective tenants as if it were a non-negotiable standard form. This is unethical. It results in hardship to tenant families and unnecessary litigation at the courthouse.

While Texas justifiably advertises itself as low regulation and business-friendly, it should not be a matter of state pride that Texas renters lack effective legal means of assuring that their housing is habitable and regularly maintained. The legislature should revisit the concept of tenant rights. Chapter 92 of the Property Code is in urgent need of reform. Not least among such reforms should be the establishment of a Tenant Rights Commission to which renters may bring complaints under an upgraded Chapter 92.