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IT’S THE LAW


By HOWARD BOOKSTAFF, Hoover Slovacek LLP, HAA General Counsel


Moving Forward, Again I


Redevelopment efforts require careful consideration of the law as well as a strategic plan for terminating tenancy.


The signs of progress are all around us. The law must be considered and a proper strategy must be developed in order to mini- mize potential claims when vacating a property.


n October 2007, I wrote an article titled “Moving Forward,” which discussed the law rel- evant to vacating an apartment community in preparation for redevelopment. Within a matter of months, development activities slowed to a


crawl. Not quite five years later, development is back! The signs of progress are all around us. The law


must be considered and a proper strategy must be developed in order to minimize potential claims when vacating a property in order to maximize the pursuit of redevelopment. Texas law has been an important tool for developers when it comes to resi- dent relocation. Let’s revisit what the law says as well as what strategies you might implement if you are redeveloping a property.


THE LAW Section 92.055 of the Texas Property Code provides


that an owner may close a rental unit at any time by giving written notice by certified mail, return receipt requested, to the resident and to the local health offi- cer and local building inspector, if any, stating that: (i) the owner is terminating the tenancy as soon as legal- ly possible; and (ii) after the resident moves out, the owner will either immediately demolish the rental unit or no longer use the unit for residential purposes. After a resident receives a notice and moves out: (i)


the local health officer or building inspector may not allow occupancy of or utility service by separate meter to the rental unit until the officer certifies that he knows of no condition that materially affects the physical health or safety of an ordinary resident; and (ii) the owner may not allow reoccupancy or recon- nection of utilities by separate meter within six months after the date the resident moves out. If the owner gives the resident the notice closing


the unit before the resident gives a repair notice to the owner, the remedies of the statute do not apply. If the owner gives the resident the notice closing the unit after the resident gives a repair notice to the owner (and presuming the owner has failed to make repairs), the statute offers the resident a number of remedies including: (i) a judgment against the owner for a civil penalty of one month’s rent plus $500;


(ii) a judgment against the owner for the amount


of the resident’s actual damages; and (iii) court costs and attorneys’ fees, excluding any attorneys’ fees for a cause of action for damages relat- ing to a personal injury. Additionally, if the owner closes the unit after the resident gives the owner a notice to repair and the resident moves out on or before the end of the rental term, the owner must pay the resident’s actual and reasonable moving expenses, refund a pro rata por- tion of the resident’s rent from the date the resident moves out, and, if otherwise required by law, return the resident’s security deposit. An owner who violates the statute is liable to the resident for an amount equal to the total of one month’s rent plus $100 in attorneys’ fees. The closing of a rental unit does not prohibit the occupancy of other apartments, nor does the statute prohibit occupancy of or utility service by master or individual meter to other rental units in an apart- ment community that have not been closed under the statute.


CHECKLIST TO PROCEED 1. Establish the closing date. Before the details of


any strategy can be established, the closing date should be identified. This will determine how much notice residents can be given, whether new lease pro- visions need to be adopted and how much time there might be to complete demolition and construction activities after residents are gone. The more notice that can be given to residents, the


better. Proper representations should be given to resi- dents regarding the closing date. If new leases contin- ue to be signed, lease terms should expire on or before the closing date. If leases are signed after the owner knows that redevelopment is in the plans but a closing date has not yet been established, it might be beneficial to have a lease clause or addendum giv- ing the owner the option to terminate in the event that redevelopment may occur during the lease term. 2. Examine the rent roll. The process involves a numbers game. Depending upon when the closing date is set, you will need to determine how many leases will expire on or before the closing date and


ABODE AUGUST 2012 11


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