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.