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Reminder: Flood disclosures required on all new and renewed leases as of January 1

Synopsis

As of January 1, all residential leases entered into or renewed must include certain flood disclosure information under a new Texas law.


Key takeaways

  • A new Texas law requires all new residential leases entered into or renewed on or after January 1, 2022 to contain certain flood disclosure information.
  • Effective January 1, a notice that complies with the law automatically prints as part of the TAA Click & Lease program. This notice will print in front of any other documents in the lease package.
  • Members using printed forms must also give this notice.
  • The disclosure must be made at or prior to the time a lease is executed. The disclosure must be in writing and in a separate document from the lease agreement.
  • A sample notice also will be available in the new TAA REBOOK and REDBOOK Online, as well as through the TAA Click & Lease program.

Under a new Texas law, all new residential leases entered into or renewed on or after January 1, 2022 must contain certain flood disclosure information. The disclosure must be in a document that is separate from the lease.

Effective January 1, a notice that complies with the law will automatically be generated as part of the TAA Click & Lease process. This notice will print in front of other documents in the lease package.

Members using printed forms must also give this notice.

Here are some answers to common questions about this new law.

What kinds of properties need to give a flood disclosure?
All
rental properties, including apartments, single-family home rentals, duplexes, triplexes, etc.

We do not live in an area prone to flooding. Do we still have to give this disclosure?
Yes, if the property is being offered for rent. This law applies statewide. Any property leased or renewed on or after January 1, 2022 is subject to this new law. The disclosure is based on a similar law that applies to home sales.

When does the disclosure need to be given?
Either at or prior to the time the lease is executed by the prospective resident. This means the disclosure must be given before a lease is signed.

Can the disclosure be given orally?
No, the disclosure must be in writing.

Can the disclosure be part of the lease?
No, the disclosure must be made in a separate written document.

Is there a sample form that complies with this required disclosure?
Yes, TAA has drafted a sample form that complies with this new law.

TAA’s new notice complies with the law’s requirements. This sample notice will be available in the new TAA REBOOK and REDBOOK Online, and through the TAA Click & Lease program.

For TAA Click & Lease users, the flood disclosure will be automatically printed with all lease documents. The flood disclosure will print in front of all other lease documents—because again, the disclosure must be made in a separate written document at the time of or before a lease is entered into.

In Click & Lease, can we change the print order so that this flood disclosure is not the first document in the lease package?
No. The new law requires the notice to be given at the time of or before a lease is entered into. Having the disclosure notice printed first was intentionally done to ensure notices were given prior to the execution of the lease.

What needs to be disclosed under the new law?

  • Whether the owner is aware of the dwelling being in a 100-year FEMA-designated floodplain; and
  • If the owner knows that flooding has damaged any portion of the dwelling at least once during the five-year period immediately preceding the lease’s effective date, that must also be disclosed.

How is flooding defined?
Flooding is defined as “partial or complete inundation of a dwelling” caused by: (a) overflow of inland or tidal waters; (b) accumulation or runoff or surface waters from any established water source such as a river, stream or drainage ditch; or (c) excessive rainfall.

Water intrusions caused by situations such as broken pipes, rainfall seeping into a window during a storm and a pond that accumulates due to construction activity are not considered flooding under the definition.

Is specific language required in the disclosure?
The language in the disclosure must be substantially equivalent to language required by the legislation, meaning it needs to be similar and have the same intent but does not have to be the exact language used in the law. TAA’s new notice complies with the requirement.

The language from the law is as follows:

“(Landlord) ( ) is or ( ) is not aware that the dwelling you are renting is located in a 100-year floodplain. If neither box is checked, you should assume the dwelling is in a 100-year floodplain. Even if the dwelling is not in a 100-year floodplain the dwelling may still be susceptible to flooding. The Federal Emergency Management Agency (FEMA) maintains a flood map on its Internet website that is searchable by address, at no cost, to determine if a dwelling is located in a flood hazard area. Most tenant insurance policies do not cover damages or loss incurred in a flood. You should seek insurance coverage that would cover losses caused by a flood.”

“(Landlord) ( ) is or ( ) is not aware that the dwelling you are renting has flooded at least once within the last five years.”

What is the penalty for non-compliance?
If an owner fails to comply with the law and if a resident’s personal property is substantially lost or damaged due to flooding, the resident may terminate the lease by giving a written notice of termination not more than 30 days after the date the loss or damage occurred. Substantial loss or damage means that the cost to repair or replace the personal property is at least 50 percent of the property’s market value on the date the flooding occurred.

In addition, the owner must refund all rent or other amounts paid in advance under the lease covering any period after the effective date of the lease termination.

Is the resident still responsible for delinquent rent or other sums owed?
Yes, the law does not affect the resident’s responsibility for delinquent, unpaid rent or other sums owed before the lease was terminated.

How can I get a copy of the new law?
The new law will be part of the REDBOOK and REDBOOK Online. You can also get a copy of the law (HB 531, 87th r.s.) at 87(R) HB 531 – Enrolled version – Bill Text (texas.gov).

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