The federal and Texas legislatures were busy in 2009 adding additional consumer protections to residential landlord/tenant relationships. On May 20, 2009, the federal “Protecting Tenants at Foreclosure Act of 2009” became effective.1 This Act is designed to protect tenants throughout the nation who are innocent victims in the foreclosure crisis. In addition, this Act applies to all foreclosures of all federally-related mortgage loans and to any dwellings or residential real properties.2 It appears to apply to tenants of single-family properties, multi-family properties, condominiums, and even mobile home renters if the mobile home is attached to real estate and sold at foreclosure.3 All these protections expire at the end of 2012.4 In Texas, the Texas Legislature provided additional tenant protections by prohibiitting residential landlords from interrupting utility services for nonpayment of rent and allowing courts to order landlords to repair premises.5

Federal Law Protecting Tenants at Foreclosure
This Act enables a bona fide tenant leasing a premises being foreclosed upon to continue occupancy through the full term of the lease unless the purchaser at foreclosure intends to use the property as his primary residence.6 If the purchaser at foreclosure intends to use the property as his primary residence, he must give the tenant at least 90 days’ notice to vacate7—even if the lease has expired or is month-to-month.8 Nothing in this section of the Act affects the requirements for termination of a federal- or state-subsidized tenancy or any state or local law that provides longer time periods or other protections for tenants.9

The Act defines a bona fide lease or tenancy.10 A lease or tenancy shall be considered bona fide only if:

(1) the mortgagor or child, spouse, or parent of the mortgagor under
the contract11 is not the tenant;

(2) the lease or tenancy was the result of an arms-length transaction; and

(3) the lease or tenancy requires the receipt of rent that is not substantially
less than the fair market rent for the property or the unit’s rent is reduced
or subsidized due to a federal, state or local subsidy.12

Conflict with Texas Property Code
The Act conflicts with and presumably preempts the time frames for notice to vacate currently set forth in the Texas Property Code. In contrast to the protections provided by the Act, the Texas Property Code provides that under certain circumstances, such as where the property is purchased at a tax or trustee’s foreclosure sale under a lien superior to the tenant’s lease, the tenant may be entitled to only as little as 30 days’ notice to vacate.13 The new federal Act now presumably requires the 90 day notice, under the Doctrine of Federal Preemption.14 Moreover, the Texas Property Code provisions which allow a 30-day notice to vacate also explicitly requires a tenant to abide by the terms of the lease and pay rent.15 Texas law also implicitly requires the new owner to abide by the lease and other applicable laws.16 Similar provisions are absent from the federal statute, but are likely to be reasonably inferred.

Texas Legislative Changes
In addition to federal changes to residential landlord/tenant laws, the Texas Legislature has been very active in providing additional protections to tenants in its recent legislative session. The Property Code amendments and repealing orders are effective January 1, 2010.17 The rights of residential tenants to obtain relief in Justice Court have been increased by two new procedures.

Protection from Interruption of Tenant Utilities
The Legislature repealed code sections that permitted residential landlords to interrupt tenant utility services for nonpayment of rent.18 The new amendments provide a remedy if a landlord interrupts tenant utilities.19 By sworn complaint and orally under oath, a tenant may request a Justice Court to issue an ex parte writ of restoration order for utilities to be immediately restored pending a final hearing.20 A landlord is entitled to service and a hearing within seven days of the landlord’s request for a hearing.21 A landlord’s failure to comply with a writ of restoration is grounds for contempt of court and is punishable by a fine or confinement to jail.22

Expansion of Jurisdiction for Orders of Repair to Premises
As a second new procedural gain for tenants, Justice Courts are now allowed to issue a judgment, including an order of repair of leased premises, that does not exceed $10,000, excluding interest and court costs.23 The Justice Court must conduct a hearing on request of the landlord not earlier than the sixth day nor later than the tenth day after service.24 This judgment may be appealed to county court.25 “An owner of real property who files a notice of appeal” perfects the appeal and stays the effect of the Justice Court judgment without the necessity of posting an appeal bond.26

Protection for Lease Guarantors
As a protection for residential lease guarantors, statutory limitations have been placed on guarantees of residential leases.27 The Property Code contains a new section which releases a lease guarantor from all liability arising from a tenant’s residential lease renewal unless the guarantor had expressly agreed by particular language in the original lease to guarantee the renewals or the guarantor signs a new, separate guaranty agreement at the time of the renewal.28

Protection for Victims of Family Violence
Since 2005, a tenant who is a victim of family violence has had rights to terminate a lease under certain circumstances.29 Previously, a tenant could terminate the rights and obligations under a lease by presenting a temporary injunction issued under Subchapter F, Chapter 6 of the Family Code or a protective order issued under Chapter 85 of the Family Code.30 Now, a tenant may also present an ex parte order issued under Chapter 83 of the Family Code.31 To trigger the tenant’s right to terminate the lease prior to expiration, previously a judge had to sign the specified order, the tenant had to deliver a copy to the landlord, and the tenant had to vacate the dwelling.32 Now, the statute also requires a 30-day written notice of termination by the tenant.33 Tenant’s rights
are expanded if the acts of family violence are committed by a co-tenant or co-occupant of the dwelling by eliminating the 30-day notice requirement.34 Tenants may not waive these rights.35

Protection for Victims of Sexual Offenses
Similar to the existing provision excusing a tenant from a lease under certain conditions of family violence, a new section of the Property Code is entitled “Right to Vacate and Avoid Liability following Certain Sex Offenses.”36 This new Property Code section provides a tenant the right to terminate the lease, to vacate the dwelling, and to avoid liability “for future rent and any other sums due under the lease” if the tenant complies with subsection (c) following certain sexual offenses.37 A tenant must be a victim of a sexual assault or a parent or guardian of a victim of a sexual assault, aggravated sexual assault, or continuous sexual abuse of a child, which occurs during the preceding six-month period on the premises or at any dwelling on the premises.38 Upon presentation of any of four specific types of documentation, a written 30-day notice to the landlord, and vacating the dwelling, the tenant may exercise the right to terminate the future liabilities of the lease.39 A tenant’s liability for delinquent, unpaid rent and other sums owed prior to termination is not affected.40 A landlord in violation of this provision is subject to actual damages, a civil penalty of one month’s rent plus $500, and attorney’s fees.41 A tenant may not waive these rights.42

Protections for Hearing-Impaired Tenants
The Texas Legislature has amended smoke detector requirements for hearing impaired tenants.43 A smoke alarm must be audible to the person in the bedroom it serves.44 Upon request of the tenant, as an accommodation for a person with a hearing-impairment disability or as required by law as a reasonable accommodation for such a person, a smoke detector must not only be audible to the bedroom it serves, but it must be capable of alerting a person with a hearing impairment in the bedroom it serves.45

Clarity for Commencement of Late Fees
Last, the Property Code was amended to clarify that a landlord may not assess a late fee until at least one full day has expired after the day on which rent was due.46

Conclusion
The 2009 legislative changes, both federal and state, appear to be a reflection of the state of our economy and social conditions. While the federal amendments address our nation’s current economic crisis, the amendments to the Texas Property Code imposed by the Texas Legislature appear to reflect a need to reign in landlords from interrupting tenant utilities, to order immediate repairs, and to provide tenants’ rights under conditions of family violence or sexual crimes. It is for the reader to ponder whether these rights should have been established years ago or if these statutory rights now reflect increasing abuses and violence in our society.

David Thompson and Philip Fraissinet are partners in the firm of Thompson & Horton LLP. The firm represents schools, institutions of higher education, local governments, and private businesses with public law, public policy, and employment law interests.

Endnotes
1. Helping Families Save Their Home Act of 2009, Pub. L. No. 111-22, 123 Stat. 1632, § 701. 2. Id. at § 702(a). 3. Id. at § 702(a). 4. Id. at § 702(a). 5. See generally, TEX. PROP. CODE ANN. (Vernon Supp. 2009). 6. Helping Families Save Their Home Act of 2009, Pub. L. No. 111-22, 123 Stat. 1632, § 702(a)(1) [hereinafter “Home Act”]. 7. Id. at § 702(a) (2)(A). 8. Home Act at§ 701(a)(1); (a)(2)(B). 9. Id. at § 701(a)(2)(B). 10. Id. at § 702(b). 11. Curiously, the statute uses the word “contract” instead of “lease.” 12. Home Act at§ 702(b)(1) - (3). 13. TEX. PROP. CODE ANN. § 24.005(b) (Vernon 2000) (emphasis added). 14. There is no case yet providing this holding. 15. TEX. PROP. CODE ANN. § 24.005(b) (Vernon 2000). 16. See e.g., Id. at § 24.005(b)(e) (Vernon 2000). 17. See generally, TEX. PROP. CODE ANN. (Vernon Supp. 2009). 18. Id. at § 92.008(c) - (e), repealed by Acts 2009, 81st Leg., ch. 1112, § 3, eff. Jan. 1, 2010. 19. Id. at. § 92.0091 (Vernon Supp. 2009). 20. Id. at § 92.0091(b), (c) (Vernon Supp. 2009). 21. Id. at § 92.0091(e) (Vernon Supp. 2009). 22. Id. at § 92.0091(i) (Vernon Supp. 2009). 23. Id. at § 92.0563(e) (Vernon Supp. 2009). 24. TEX. PROP. CODE ANN. § 92.0563(d) (Vernon Supp. 2009). 25. Id. at § 92.0563(f) (Vernon Supp. 2009). 26. Id. at § 92.0563(f) (Vernon Supp. 2009) Why this section states “owner of real property” instead of “landlord” is a mystery. There could be a case in which the owner and a landlord are different parties and the owner of the property was not joined in the justice court suit as the rest of this section refers to the landlord. 27. Id. at § 92.021 (Vernon Supp. 2009). 28. Id. at § 92.021(b), (c) (Vernon Supp. 2009). 29. Id. at § 92.016 (Vernon Supp. 2005). 30. Id. at § 92.016(b) (Vernon 2005). 31. Id. at § 92.016(b)(2) (Vernon Supp. 2009). 32. TEX. PROP. CODE ANN. § 92.016(c) (Vernon Supp. 2005). 33. Id. at § 92.016(c)(3), (4) (Vernon Supp. 2009). 34. Id. at § 92.016(c-1) (Vernon Supp. 2009). 35. Id. at § 92.0161(g) (Vernon Supp. 2009). 36. Id. at § 92.0161 (Vernon Supp. 2009). 37. Id. at § 92.0161(b)(c) (Vernon Supp. 2009). 38. Id. at § 92.0161(c) (Vernon Supp. 2009). 39. Id. at § 92.0161(d) (Vernon Supp. 2009). 40. TEX. PROP. CODE ANN. § 92.0161(e) (Vernon Supp. 2009). 41. Id. at § 92.0161(f) (Vernon Supp. 2009). 42. Id. at § 92.0161(h) (Vernon Supp. 2009). 43. Id. at § 92.254 (Vernon Supp. 2009). 44. Id. at § 92.254(a)(2), (a-1) (Vernon Supp. 2009). It appears a landlord will need to determine in which bedroom a hearing-impaired person will sleep. 45. Id. at § 92.254(a)(2), (a-1) (Vernon Supp. 2009). 46. Id. at § 92.019(a)(3) (Vernon Supp. 2009).