TAA earns victories in the 2017 legislative session.
The 2017 legislative session was largely successful for the Texas Apartment Association, as TAA helped pass legislation that will prevent class action lawsuits over water billing and fought off a number of other bills that would have cost members money.
Here’s a look at important legislation considered during the 2017 session. Read the complete Legislative Session Report in the Summer 2017 issue of Texas Apartments for more information.
SB 873 requires residents who have water billing complaints to go through the Public Utility Commission (PUC). The legislation was needed because unlike complaints against PUC-regulated utility companies, the law had previously allowed residents to either file complaints with the PUC or go to court.
With civil penalties of one month’s rent, three times the amount of any overcharge, attorney fees and court costs, there had been more than a dozen class action lawsuits over water billing disputes filed in the last few years. Trial lawyers were seeking multimillion dollar judgments against owners and management companies even when these alleged violations hadn’t been investigated by the PUC.
Under the new law, if residents are unable to resolve their complaint directly with the property owner, they may file a complaint with the PUC. If the PUC launches a formal investigation and finds wrongdoing, an owner can be ordered to provide restitution for any overcharge and can also be fined up to $5,000 per violation a day. (In assessing the amount of any fine, the PUC considers criteria such as the severity of the violation.)
The legislation also makes several other important changes by clarifying the definition of owner so that management companies are not held liable unless the company explicitly purports in the lease to be the owner, and also clarifies that owners may pass along charges that are unrelated to the water bill.
Need to brush up on the water billing rules? Check out the TAA Water Billing Tool Kit available in the Resources section of the TAA website.
The Texas Apartment Association laid out an ambitious agenda for the 2017 session aimed at reducing liability for owners and managers, bringing greater accountability regarding local government property tax and fee increases, and reducing misrepresentation of assistance animals.
At the top of TAA’s priorities was SB 873 by Sen. Brandon Creighton and HB 1964 by Rep. Jim Murphy, which will help protect property owners from facing class action lawsuits over water billing disputes while still ensuring residents can have complaints investigated through the Public Utility Commission (PUC). Despite opposition from trial lawyers and tenant advocates, the bill passed and was signed into law by Gov. Greg Abbott. It became effective June 1.
TAA was not as successful with our other affirmative bills. However, looking forward to the 2019 session, the TAA Legislative Committee will reevaluate each of these issues to see whether to reintroduce bills or seek other alternatives.
For example, while TAA was not successful in setting a bright-line standard for defining late fees, the TAA Board will consider changes to the lease to help limit potential class actions.
Other bills in TAA’s affirmative legislative agenda which did not pass in 2017: Late fees (HB 1821 by Rep. Travis Clardy/SB 921 by Sen. Charles Perry), Misrepresentation of Service Animals (HB 3229 by Rep. Dade Phelan), and City Fee Transparency (HB 1557 by Rep. Tan Parker/SB 737 by Sen. Kelly Hancock).
TAA also strongly supported two other bills which failed to pass: omnibus property tax reform (SB 2 by Sen. Paul Bettencourt) and giving police the option to ticket for criminal trespass (HB
3473 by Rep. Barbara Gervin-Hawkins/SB 1106 by Sen. Bettencourt).
TAA supported these bills, which all passed.
Cities will be prohibited from charging linkage fees or other development-based fees to fund affordable housing. The bill has limited exceptions, including allowing density bonus programs. (HB 1499 by Rep. Ron Simmons/Sen. Jane Nelson). Effective May 29, 2017.
The Texas Department of Licensing and Regulation will be writing rules to allow a property owner to tow a vehicle to a different location on a property rather than an offsite vehicle storage facility. This clear authority will be useful, for example, when a property needs to restripe a parking lot or do repairs.
The expectation is for the new rules to be approved in December 2017 and take effect in January 2018. TAA will be working with the department and interested parties to provide input in the rulemaking process. Details will be posted when the rules come into effect.
(SB 1501 by Sen. Judith Zaffirini/Rep. John Kuempel). Effective June 15, 2017.
In an appeal of an eviction for nonpayment of rent a multifamily property owner may be represented by a non-attorney in certain cases. NOTE: Eviction appeals may be complex and are subject to different rules than those used in JP court. TAA strongly encourages any property owner with an eviction case on appeal to use an attorney and, if not, to be fully aware of any potential consequences for representing themselves or using a non-attorney. (HB 3879 by Rep. Craig Goldman/Sen. Hancock). Effective for appeals taken on or after September 1, 2017.
This law would have required a municipality that imposes a tree mitigation fee to allow the developer to apply for a credit for tree planting to offset the fee. If a mitigation fee was to be based on the size of the tree, the credit would have had to be based on at least 50 percent of the planted tree’s projected size at maturity. The bill was vetoed by Gov. Abbott after passing both chambers, but the governor has indicated this will be addressed again in broader terms during the special session. (SB 744 by Sen. Lois Kolkhorst/Rep. Phelan).
Property tax arbitration
Raises the ceiling on the value of a property eligible for binding arbitration as an alternative to appealing to district court to $5 million from the current $3 million, and sets a $1,550 arbitration deposit for non-homestead properties valued between $3 million and $5 million. (SB 731 by Sen. Bettencourt/Rep. Dwayne Bohac). Effective September 1, 2017.
Disability accessibility drive-by claims
TAA supported this bill to reduce state court disability accessibility claims by providing pre-suit notice and an opportunity to cure. (HB 1463 by Rep. John Smithee/Sen. Kel Seliger). Effective September 1, 2017.
Weather-related insurance claims
After the bill went through revisions to improve consumer rights, TAA supported passage of major tort reform legislation to reduce excessive property damage insurance claims, including those related to hail and other water-related events. (HB 1774 by Rep. Greg Bonnen/Sen. Hancock). Effective September 1, 2017.
While more than 15 landlord/tenant bills were filed this session, only one passed—HB 1099 by Rep. Terry Canales, which prohibits a landlord for penalizing a tenant for summoning police or emergency assistance based on the tenant’s “reasonable belief” that emergency assistance is needed. TAA supported this bill, which applies to leases entered into or renewed on or after September 1, 2017.
Some of the more notable landlord/tenant bills, which all failed, include:
- SB 1202 by Sen. Royce West, which would have created state standards for tenant notice and relocation when a property is being rehabilitated, demolished or sold.
- SB 1445 by West and HB 3401 by Victoria Neave, which would have required landlords to offer methods to pay rent other than electronic payments or cash and limited related fees that could be charged to tenants.
- HB 1097 by Rep. Canales and SB 1374 by Sen. José Menéndez, which would have given courts the ability to expunge eviction court records if the court found, among other provisions, that the eviction suit was without “sufficient basis.”
- HB 3363 by Rep. Neave, which, as approved by the House Business and Industry Committee, would have required a landlord to give at least 7 days’ notice of rent increases before the tenant is required to give notice of intent to move out.
- HB 3699 by Rep. Armando Walle, which would have prohibited lockouts for nonpayment of rent.
Good morning Madam Chairwoman, Members of the Committee. My name is Sandy Hoy. I serve as General Counsel of the Texas Apartment Association. I’m here before you today on behalf of TAA to state our support for HB 77 by Representative Darby.
We are in support of this legislation because it provides a choice of whether to pay a fee or dedicate land when applying to a city or municipality for a permit to develop property.
We believe it is good policy to provide parties options and flexibility in developing property in this ever-growing population.
HB 77 would grant landowners, developers, and applicants the right to choose between providing on-site land dedication and paying a fee in lieu.
I believe this practice – of providing a choice – is consistent with what most cities do in Texas that have parkland dedication rules.
Thank you and I’ll be happy to answer any questions you may have.