HBA-DMH H.B. 2803 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2803
By: Uresti
Business & Industry
6/29/2001
Enrolled



BACKGROUND AND PURPOSE 

Security deposit handling requirements have been established for landlords
and tenants of residential rental property.  However, prior to the 77th
Legislature, no liability existed for a commercial landlord that did not
release a security deposit.  House Bill 2803 establishes similar security
deposit handling requirements for landlords and tenants of commercial
rental property. 

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 2803 amends the Property Code to establish provisions for the
handling of a security deposit intended primarily to secure performance
under a lease of commercial rental property equivalent to existing
provisions established for residential rental property.  The bill provides
that a person who no longer owns an interest in the rental premises remains
liable for a security deposit received while the person was the owner until
the new owner delivers to the tenant a signed statement acknowledging that
the new owner has received and is responsible for the tenant's security
deposit and specifying the exact dollar amount of the deposit.  The amount
of the security deposit is the greater of:  

_the amount provided in the tenant's lease; or 

_the amount provided in an estoppel certificate prepared by the owner at
the time the lease was executed or prepared by the new owner at the time
the commercial property is transferred.  

The bill requires a landlord to refund the security deposit to the tenant
not later than the 60th day after the tenant surrenders the premises and
provides notice of the tenant's forwarding address. 

EFFECTIVE DATE

September 1, 2001.