HBA-ATS H.B. 2015 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2015 By: Dukes Business & Industry 3/26/1999 Introduced BACKGROUND AND PURPOSE Currently there is no state regulation for tenants living in manufactured housing communities. Accordingly, they may be subjected to surprise increases in rent, harassment over tenant organizations, and evictions without good cause or due to retaliation. In addition, operators of these communities are not required to offer tenants a lease agreement with a minimum term. This allows operators to rent the sites on a month-to-month basis, often without a lease. H.B. 2015 establishes a new chapter in the Property Code that governs the relationship between landlords and tenants in a manufactured home community. It provides that a lease agreement must be for a term of at least four years, but authorizes the landlord to set any rental amount during the first four-year lease term, including an increase in the rental amount, provided that the amount or method of determining the increased amount is fully and clearly determinable and disclosed in the lease agreement and binding on the landlord for the term of the lease agreement. This bill also authorizes a landlord to terminate the lease agreement and evict a tenant if the tenant fails to timely pay rent, the landlord notifies the tenant in writing that the rent is delinquent, and the tenant has not tendered the delinquent payment to the landlord before the 21st day after the tenant receives the notice. A landlord is prohibited from terminating the lease agreement and evicting the tenant if the tenant fails to timely pay a fee or charge required under the lease agreement. However, a landlord is authorized to terminate the lease agreement and evict a tenant for a violation of a community rule if the rule is reasonable and the tenant's violation of the rule is likely to continue or reoccur and would have a significant adverse impact on the community. In addition, a landlord is authorized to terminate the lease agreement and evict a tenant if the tenant engages in disorderly or criminal conduct if the conduct disrupts the quiet enjoyment of other tenants in the community, endangers other tenants or the community personnel, or causes substantial damage to the manufactured home community premises. 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. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 8, Property Code, by adding Chapter 94, as follows: CHAPTER 94. MANUFACTURED HOME TENANCIES SUBCHAPTER A. GENERAL PROVISIONS Sec. 94.001. DEFINITIONS. Defines "landlord," "lease agreement," "manufactured home," "manufactured home community," "premises," and "tenant." Sec. 94.002. APPLICABILITY. Provides that this chapter applies only to the relationship between landlords and tenants in a manufactured home community (community). Provides that Chapter 91 (Provisions Generally Applicable to Landlords and Tenants) does not apply to this chapter. Sec. 94.003. WAIVER OF RIGHTS AND OBLIGATIONS. Provides that a provision in a lease agreement or a manufactured home community rule that waives or limits a right granted to a tenant or an obligation imposed on a landlord under this chapter is void and unenforceable. Sec. 94.004. LANDLORD'S RIGHT OF ENTRY. Prohibits a landlord from entering a tenant's premises unless the tenant is present and gives consent or the tenant has previously given written consent, which must specify the date and time entry is permitted and is valid only for the date and time specified. Authorizes the tenant to revoke the consent at any time by notifying the landlord in writing that the consent has been revoked. Authorizes the landlord to enter the tenant's manufactured home (home) in a reasonable manner and at a reasonable time if an emergency exists or the tenant abandons the home. Authorizes the landlord to enter the lot leased to a tenant in a reasonable manner and at a reasonable time if an emergency exists, the tenant abandons the home, or maintenance of utilities, maintenance of the premises, or protection of the community is required. Sec. 94.005. COMMON AREA FACILITIES. Provides that each common area facility must be open or available to tenants at all reasonable hours. Requires the landlord to post the hours of operation or availability of the common area facility in a conspicuous place at the facility. Sec. 94.006. MANUFACTURED HOME COMMUNITY RULES. Authorizes a landlord to adopt reasonable rules governing the use of the community premises. Provides that a community rule is considered part of the lease agreement. Sec. 94.007. TENANT MEETINGS. Prohibits a landlord from interfering with meetings held by tenants. Sec. 94.008. CASH RENTAL PAYMENTS. Requires a landlord to accept a tenant's cash rental payment unless the lease requires the tenant to make rental payments by check, money order, or other traceable or negotiable instrument. Requires a landlord who receives cash to provide the tenant with a written receipt and enter the payment date and amount in a record book maintained by the landlord. Authorizes a tenant or a governmental entity or civic association acting on the tenant's behalf to file suit against a landlord to enjoin a violation of this section. Sec. 94.009. NOTICE TO TENANT AT PRIMARY RESIDENCE. Requires a landlord to mail all notices required by the lease agreement, by this chapter, or by Chapter 24 (Forcible Entry and Detainer) to the tenant's primary residence if the manufactured home is not the tenant's primary residence. Requires the tenant to notify the landlord in writing of any change in the tenant's primary residence address and provides that oral notices of change are insufficient. Authorizes sending the notice by regular U.S. mail. Provides that it is considered sent on the date of postmark. Provides that if there is more than one tenant on a lease, the landlord is not required to send notices to the primary residence of more than one tenant. Provides that this section does not apply if notice is actually hand delivered to and received by a person occupying the leased premises. Sec. 94.010. DISCLOSURE OF OWNERSHIP AND MANAGEMENT. Describes the information concerning the owner of the premises and the managing entity that is required to be disclosed by a landlord to a tenant or to any governmental official or employee acting in an official capacity. Describes how a landlord is to provide disclosure to a tenant. Authorizes the disclosure of information to a tenant to be made before the tenant requests the information. Describes how a landlord is to provide disclosure to a governmental official or employee. Authorizes a correction to the information to be made by any of the methods authorized. Provides that the correction must be made within the period prescribed by this section for providing the information. Authorizes an owner or property manager to disclose either an actual name or names or an assumed name if an assumed name certificate has been recorded with the county clerk. Provides that a landlord who provides information under this section violates this section if the information becomes incorrect because a name or address changes and the landlord fails to correct the information on or before the 15th day after the information becomes incorrect. Sec. 94.011. LANDLORD'S AGENT FOR SERVICE OF PROCESS. Provides that the owner's management company, on-site manager, or rent collector for the community is the owner's authorized agent for service of process in a lawsuit by a tenant to enforce a legal obligation of the owner as landlord of the community, unless the owner's name and business street address have been furnished in writing to the tenant. Sec. 94.012. VENUE. Provides that venue for an action under this chapter is governed by Section 15.0115 (Landlord-Tenant), Civil Practice and Remedies Code. SUBCHAPTER B. LEASE AGREEMENT Sec. 94.051. INFORMATION TO BE PROVIDED TO PROSPECTIVE TENANT. Requires a landlord to give a prospective tenant the proposed lease agreement for the community and the community rules. Sec. 94.052. RIGHT TO CANCEL. Authorizes a tenant who executes a lease agreement to cancel the agreement by notifying the landlord in writing by the fifth day after the tenant executes the agreement. Sec. 94.053. MINIMUM TERM OF LEASE. Provides that a lease agreement must be for a term of at least four years. Sec. 94.054. LEASE AMOUNT. Authorizes the landlord to set any rental amount during the first four-year lease term, including an increase in the rental amount, provided that the amount or method of determining the increased amount is fully and clearly determinable and disclosed in the lease agreement and binding on the landlord for the term of the lease agreement. Sec. 94.055. LEASE REQUIREMENTS AND DISCLOSURES. Provides that a lease agreement must be written in plain language, printed in at least 10-point type or legible handwriting, and signed by the landlord and the tenant. Requires the landlord to provide the tenant with a copy of the lease agreement after the lease has been signed. Enumerates the provisions that must be contained in the lease agreement. Provides that a lease provision requiring an increase in rent or in fees or charges during the lease term must be initialed by the tenant or the provision is void. Provides that a lease agreement that contains a provision that is illegal or unconscionable is void. Sec. 94.056. STATUTORY LEASE TERMS IMPLIED AS MATTER OF LAW. Provides that each lease term required by this chapter is considered included in a lease agreement as a matter of law. Sec. 94.057. RENEWAL OF LEASE. Provides that at the expiration of a lease agreement, the agreement is automatically renewed for a term of four years with the same terms as the previous lease agreement unless the tenant notifies the landlord by the 30th day before the date the lease agreement terminates that the tenant intends to surrender the premises, or the landlord changes the lease terms as provided by this section. Requires the landlord, six months before the date the lease agreement expires, to offer the tenant a renewal lease agreement with a term of at least four years. Provides that the renewal offer must disclose the proposed rental amount, any change in fees or charges, and any other changes in the lease or the manufactured home community rules for the renewal term. Sec. 94.058. PENALTY FOR LATE PAYMENT. Authorizes a landlord to assess a penalty for late payment of rent or another fee or charge if the rent is not paid before the 16th day after the payment is due. Prohibits that penalty from exceeding four percent of the amount owed. Provides that the penalty may be imposed only once for each late payment. Sec. 94.059. USE-BASED FEES AND CHARGES. Defines a "use-based fee" or "usebased charge." Prohibits a landlord from assessing a fee or charge to a tenant, other than the rental payment, unless the fee or charge is a use-based fee or charge disclosed in the lease agreement. Provides that a use-based fee or charge may only be increased as disclosed in the lease agreement. Provides that any increase must be reasonably related to an increase in the landlord's costs for providing the service or facility. Describes the types of fees and charges that are prohibited. Sec. 94.060. ASSIGNMENT OF LEASE AND SUBLEASE. Authorizes a tenant to assign the lease agreement to the purchaser of the tenant's home or sublease the manufactured home lot. Provides that the tenant must provide the landlord with notice of an assignment or sublease by the 30th day before the assignment or sublease takes effect. Authorizes the landlord to refuse to permit the assignment or sublease, by the seventh day before the assignment or sublease takes effect, if the landlord provides the tenant with a written notice of the refusal that states the reasons for the refusal, and the reason for the refusal is that the assignee or sublessee is financially unable to pay the lease amount or would pose a hazard to the safety or interfere with the quiet enjoyment of the tenants of the community. Prohibits the landlord from refusing to permit an assignment or sublease because of the age or condition of the manufactured home or because the assignment is from the tenant to the tenant's bona fide creditor, or from imposing an application or other fee on the prospective assignee or sublessee. SUBCHAPTER C. SECURITY DEPOSIT Sec. 94.101. SECURITY DEPOSIT. Defines "security deposit." Sec. 94.102. SECURITY DEPOSIT PERMITTED. Authorizes the landlord to require a security deposit in an amount equal to no more than one month's rent at the time the tenant executes the initial lease agreement. Requires the landlord to keep accurate records relating to security deposits. Sec. 94.103. OBLIGATION TO REFUND. Requires the landlord to refund the security deposit by the 30th day after the tenant surrenders the premises, except as provided by Section 94.104. Provides that the tenant's claim to the security deposit takes priority over the claim of any creditor of the landlord. Sec. 94.104. RETENTION OF SECURITY DEPOSIT. Authorizes the landlord to deduct unpaid rent, damages, and charges for which the tenant is liable under the lease agreement before returning the security deposit. Authorizes the landlord to retain a portion of the security deposit if the tenant fails to surrender the premises in a condition that is reasonably clean and free of debris. Prohibits the landlord from retaining any portion of a security deposit to cover normal wear and tear. Defines "normal wear and tear" for purposes of this subsection. Sec. 94.105. ACCOUNTING. Requires the landlord to mail to the tenant the balance of the security deposit, if any, together with a written description and an itemized list of all deductions by the 30th day after the tenant surrenders the premises. Sec. 94.106. LIABILITY OF LANDLORD. Provides that a landlord who fails to comply with this subchapter is not entitled to recover amounts that may be due under this chapter and must immediately remit to the tenant the full amount of the security deposit. SUBCHAPTER D. PREMISES CONDITION, MAINTENANCE, AND REPAIRS Sec. 94.151. WARRANTY OF HABITABILITY. Provided that the landlord covenants and warrants that the leased premises is fit for human habitation when the landlord executes the lease agreement. Sec. 94.152. LANDLORD'S MAINTENANCE OBLIGATIONS. Enumerates what is required of the landlord to maintain the upkeep of the community. Sec. 94.153. LANDLORD'S REPAIR OBLIGATIONS. Requires the landlord to make repairs the landlord is obligated to make or enter into a contract with a third party to make the repairs. Requires the landlord to provide each tenant with the name and telephone number of the person who may be contacted for emergency repairs. Sec. 94.154. TENANT'S REPAIR AND DEDUCT REMEDY. Authorizes the tenant, if the landlord fails to comply with this subchapter, to notify the landlord of the tenant's intent to correct the condition at the landlord's expense. Authorizes the tenant to have the condition repaired or remedied by a contractor and, after submitting to the landlord an itemized statement, deduct the actual and reasonable cost of the work from a subsequent rent payment if the landlord does not correct the condition before the 16th day after the tenant provides the notice or more promptly as emergency conditions reasonably require. Authorizes the tenant to recover damages as provided by Subchapter I. SUBCHAPTER E. TERMINATION, EVICTION, AND FORECLOSURE Sec. 94.201. LANDLORD'S REMEDY FOR EARLY TERMINATION. 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 three months' rent, except that if the tenant's leased premises is reoccupied before the 21st day after the tenant surrenders the premises, the maximum amount the landlord may obtain as damages is an amount equal to one month's rent. Sec. 94.202. LANDLORD'S DUTY TO MITIGATE DAMAGES. Provides that a landlord has a duty to mitigate damages if a tenant abandons the leased premises in violation of the lease. Provides that a provision of a lease that purports to waive a right or to exempt a landlord from a liability or duty under this section is void. Sec. 94.203. LANDLORD'S TERMINATION OF LEASE PERMITTED IN LIMITED CIRCUMSTANCES. Authorizes a landlord to terminate or refuse to renew a lease agreement only as provided by this subchapter. Sec. 94.204. EVICTION PROCEDURES GENERALLY. Authorizes a landlord to prevent a tenant from entering the leased premises, evict a tenant, or require the removal of a manufactured home from the leased premises only after obtaining a writ of possession under Chapter 24. Requires the court to determine if the grounds for eviction as provided by this subchapter are established. Prohibits the court from approving the eviction of the tenant if it finds that the landlord initiated the eviction proceeding to retaliate against the tenant in violation of Section 94.302. Prohibits a court from issuing a writ of possession in favor of a landlord before the 45th day after the judgment for possession is rendered. Requires the landlord to send written notice that the judgment has been rendered to the owner of the home if the tenant is not the owner and if the landlord is given written notice of the owner's name and address. Requires the landlord to send a written notice regarding the location of the home to the tenant or the owner if the landlord removes the manufactured home from the leased premises after executing a writ of possession for them. Sec. 94.205. TERMINATION FOR CHANGE IN LAND USE. Describes the conditions under which a landlord is authorized to terminate a lease agreement to change the community's land use. Specifies when the landlord is required to give the owner of the manufactured home notice. Authorizes the owner, within sixth months after receiving notice of the changed land use, to relocate the home and select any date for the relocation if that date occurs before the date the land use changes. If the owner of the manufactured home chooses to relocate the manufactured home, the landlord is required to relocate the home at the landlord's expense to any site designated by the owner that is located within a 100-mile radius of the manufactured home community. Enumerates the landlord's duties to prepare the relocated home. . Sec. 94.206. TERMINATION AND EVICTION FOR VIOLATION OF MANUFACTURED HOME COMMUNITY RULE. Authorizes a landlord to terminate the lease agreement and evict a tenant for a violation of a community rule if the rule is reasonable and the tenant's violation of the rule is likely to continue or reoccur and would have a significant adverse impact on the community. Sec. 94.207. TERMINATION AND EVICTION FOR DISORDERLY OR CRIMINAL CONDUCT. Authorizes a landlord to terminate the lease agreement and evict a tenant for engaging in disorderly or criminal conduct if the conduct disrupts the quiet enjoyment of other tenants in the community, endangers other tenants or the community personnel, or causes substantial damage to the manufactured home community premises, and if there is a likelihood that future conduct would also be grounds for eviction under this section. Sec. 94.208. TERMINATION AND EVICTION FOR NONPAYMENT OF RENT. Authorizes a landlord to terminate the lease agreement and evict a tenant if the tenant fails to timely pay rent, the landlord notifies the tenant in writing that the rent is delinquent, and the tenant has not tendered the delinquent payment to the landlord before the 21st day after the tenant receives the notice. Prohibits a landlord from terminating the lease agreement and evicting the tenant if the tenant fails to timely pay a fee or charge required under the lease agreement. Provides that a payment made by a tenant to a landlord is attributed first to any delinquent rent payment, then to the current rent payment, and last to any fee or charge, including a late charge. Authorizes a tenant, if a court renders a judgment for possession in favor of the landlord based solely on nonpayment of rent, to cure the default and reinstate the lease by paying into the court registry an amount equal to the delinquent rent payment and any fees and costs owed as determined by the court. Provides that the judgment for possession is released and prohibits the issuance of a writ of possession in favor of the landlord if the tenant cures the default as provided by this subsection. Sec. 94.209. AFFIRMATIVE DEFENSE TO EVICTION FOR NONPAYMENT OF RENT. Provides that it is an affirmative defense in an eviction action that the landlord has breached the statutory warranty of habitability, breached a provision of the lease agreement, or violated this subchapter. Authorizes the tenant to recover damages if these events occur. SUBCHAPTER F. SALE OR LEASE OF MANUFACTURED HOME COMMUNITY Sec. 94.251. NOTICE OF SALE OR LEASE. Requires a landlord to notify the tenants of the community of a listing of the community with a realtor, an advertisement or other public notice that the community is for sale or lease, or a bona fide offer to purchase or lease the community that the landlord intends to accept. Requires the landlord to provide the notice by the seventh day after one of those events occurs. Sec. 94.252. TENANT'S RIGHT OF FIRST REFUSAL. Provides that the tenants of the have the right of first refusal to purchase or lease the community. Prohibits the landlord from unreasonably refusing to enter into or unreasonably delaying the execution of a purchase or lease agreement with the tenants who have complied with this section. Authorizes the landlord to require tenants offering to lease the community to place in escrow an amount necessary to pay the lease for a period of no more than one year from the effective date of the lease agreement. Describes the kinds of offer to which the right of first refusal applies. Provides that this section does not apply to a governmental taking by eminent domain or negotiated purchase, a foreclosure action, a transfer by gift, devise, or operation of law, or a sale to a person who would be entitled to an interest in the property if the landlord died intestate. Sec. 94.253. AFFIDAVIT OF COMPLIANCE. Requires the landlord who sold or leased the property to execute an affidavit stating the facts that demonstrate that the landlord complied with this section and to file the affidavit with the county clerk of each county in which all or part of the property is located, if the tenants of the community are not able to purchase or lease the community. SUBCHAPTER G. PROHIBITED ACTS Sec. 94.301. UNFAIR PRACTICES. Prohibits a landlord from engaging in unfair or deceptive acts or practices or unfair methods of competition. Provides that a violation of this section is considered a deceptive trade practice for purposes of Subchapter E, Chapter 17, Business & Commerce Code. Sec. 94.302. RETALIATORY CONDUCT. Specifies the actions undertaken by a tenant that a landlord is prohibited from retaliating against. Describes the actions from which a rebuttable presumption that the landlord is retaliating against a tenant is formed. Sec. 94.303. RESTRICTION ON CHOICE OF PROVIDER. Prohibits a landlord from restricting the choice of providers from whom a tenant may purchase goods or services or engaging in any conduct that discourages a tenant from selecting the provider of the tenant's choice. Describes the goods and services to which this subsection does not apply. Prohibits the landlord from imposing a charge for site-maintenance services performed by the landlord unless the tenant, if available, is given notice and a reasonable opportunity to perform the tenant's obligation under the lease agreement. Describes the limitations for any charge for site-maintenance services authorized under this subsection. Provides that a landlord who provides cable or other television services at a charge above that prevailing in the vicinity creates a presumption that a community rule restricting antennas or otherwise restricting a tenant's access or choice of television service is void. Sec. 94.304. RESTRICTION ON SALE OF MANUFACTURED HOME. Prohibits a landlord from: _prohibiting the owner of a home located on the leased premises from selling the home; _interfering with the sale of a home located on the leased premises; _requiring the owner of the home to remove the home from the lot solely because of the sale of the home; _limiting the sale of a home because of the home's age or physical condition; _requiring the owner of a home located on the leased premises to contract with the landlord to act as agent or broker in the sale of a home located on the leased premises; _requiring the owner to pay a commission or fee from the sale of a home located on the leased premises; or _placing unreasonable, unfair, or discriminatory restrictions on a "For Sale" sign displayed in the community or on access to the community by a prospective purchaser or a realtor. SUBCHAPTER H. REMEDIES Sec. 94.351. TENANT'S REMEDIES. Enumerates the remedies a person is authorized to recover from a landlord who violates this chapter. Requires a court to award treble damages and authorizes it to award additional punitive damages if the court finds that a landlord recklessly violated this chapter or acted in bad faith. Provides that a landlord who attempts to unlawfully evict a tenant, terminate a tenant's utility service, or prevent a tenant from entering the tenant's leased premises is presumed to have acted in bad faith, knowingly, or recklessly. Describes the relief a court is authorized to order. Specifies the conditions under which a person has a lien against the property on which the community is located. Sec. 94.352. LANDLORD'S REMEDIES. Specifies the remedies required to be awarded to the landlord by a court that finds that a tenant filed or prosecuted a suit under this chapter in bad faith or for purposes of harassment. Sec. 94.353. STATE REMEDIES. Specifies the penalties imposed by authorities on a landlord who has violated or is threatening to violate this chapter. Requires the court to award reasonable attorney's fees and costs to the state if the state prevails. Authorizes the attorney general or the district or county attorney for a county in which all or part of the manufactured home community is located to request the court to appoint a receiver to operate the manufactured home community if the landlord is financially unable to operate the manufactured home community, or the appointment is the most effective means of ensuring compliance with a court order. Sec. 94.354. CUMULATIVE REMEDIES. Provides that the provisions of this chapter are not exclusive and are in addition to any other procedure or remedy provided by other law. Sec. 94.355. ADDITIONAL ENFORCEMENT BY LOCAL ORDINANCE. Provides that this chapter does not prohibit the adoption of a local ordinance that provides for additional enforcement of this chapter if the local ordinance is consistent with this chapter. SECTION 2. Amends Section 9.503, Business & Commerce Code, to add the provision that a secured party must proceed by judicial process in taking possession of the collateral if the collateral is a manufactured home. Makes conforming changes. SECTION 3. Effective date: September 1, 2000. SECTION 4. Makes application of this Act prospective. SECTION 5. Emergency clause.