Hurricane Harvey: The Aftermath
By: Howard M. Bookstaff, General Counsel
As Houston apartment professionals and owners work through the devastation of Harvey, many are asking a number of questions. Here are your answers. Many communities in and around Houston suffered damages from the effects of Hurricane Harvey. Many lost power and numerous properties suffered substantial water damage. Roads turned into rivers. Cars were replaced with boats. Transistor radios replaced TVs. As we work to recover from the devastation, apartment owners and managers have a number of questions with respect to various owner/resident issues. Here are some of the commonly asked questions, and some guidance with respect to the answers. Please note that the answers to these questions presume the resident has signed a standard TAA Apartment Lease Contract. If another lease is being used, the lease should be reviewed to determine whether the answers given should be modified.
needed repairs poses a danger to the resident, the owner may terminate the lease by giving at least five (5) days written notice.
2.If I terminate leases, do I have to refund rent and security deposits?
the property would have been substantially damaged, chances are that most, if not all, of the security deposit should be refunded.
3.If the owner does not believe that the damage warrants the termination of the lease, does the resident still have the right to terminate the lease?
Probably not. Section 26.4 of the lease states that the owner will act with customary diligence to make repairs and reconnections, taking into consideration when casualty-insurance proceeds are received and that “rent will not abate in whole or in part.” Section 92.054(c) of the Texas Property Code states that if after a casualty loss the rental premises are partially unusable for residential purposes, the resident is entitled to reduction in 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. This section also states that an owner and resident may agree otherwise in a written lease. Based on the language of the lease, rent will not abate in whole or in part. Since the statute allows an owner and resident to agree on this issue in the lease, the lease should prevail. Furthermore, even under the statute, if a resident is seeking a reduction in rent, the resident would only be entitled to a reduction if the resident proceeded to court and obtained a judgment allowing the reduction
There is not a clear answer to this question. Section 92.056(b) of the Texas Property Code provides that an owner is liable to a resident for failing to repair or remedy a condition if: (i) the resident has given the owner notice to repair a remedy the condition; (ii) the condition materially affects the physical health or safety of an ordinary resident; (iii) the resident has given the owner a subsequent written notice to repair or remedy the condition after a reasonable time following the resident’s first notice (unless the resident gave the first notice by certified or registered mail); (iv) the owner has had a reasonable time to repair or remedy the condition after the owner receives the resident’s notices; (v) the owner has not made a diligent effort to repair or remedy the condition after receiving the resident’s notices; and (vi) the resident was not delinquent in the payment of rent at the time any notice required by this subsection was given. In determining whether a period of time is a reasonable time to repair or remedy a condition, there is a rebuttable presumption that seven (7) days is a reasonable time. To rebut the presumption, the date on which the owner received the resident’s notice, the severity and nature of the condition and the reasonable availability of materials and labor and of utilities from a utility company must be considered. Section 92.054(a) provides that if a condition results for an insured casualty loss, the period for repair does not begin until the owner receives the insurance proceeds. As indicated above Section 26.4 of the lease provides that the owner will act with customary diligence to make repairs and reconnections, taking into consideration when casualty-insurance proceeds are received. Based upon these statutory and lease provisions, it would appear to be reasonable for an owner to have at least seven (7) days to make repairs after the storm. However, the law allows an owner additional time if the failure to make repairs is due to the severity and nature of the condition or the unavailability of materials, labor or utilities. Therefore, the answer will depend on whether there are sufficient insurance proceeds to pay the cost of repairs, the circumstances relating to the extent of the damage and what the owner needs to do in order to make proper repairs. Of course, if you are electing to terminate leases, time to repair is more or less irrelevant.
