7.4 Landlord-Tenant Law & Statutory Disclosures

7.4 Landlord-Tenant Law & Statutory Disclosures

Exam Focus: The Texas Real Estate Broker Examination rigorously tests residential leasing rules under Texas Property Code Chapter 92 and mandatory real estate disclosures. Key exam targets include the landlord's 7-day repair protocol, 'repair-and-deduct' limits (1 month's rent or $500), mandatory security devices (keyless bolting devices and 7-day re-keying at turnover), security deposit accounting (30 days), Seller's Disclosure Notice (§ 5.008) rules and its 11 exemptions, MUD notices (Texas Water Code § 49.452) and statutory penalties, PID notices, and federal pre-1978 Lead-Based Paint disclosures.

1. Texas Property Code Chapter 92: Landlord Duty to Repair

Residential landlord-tenant relationships in Texas are governed by Texas Property Code Chapter 92.

Landlord Duty to Repair or Remedy (§ 92.056)

A landlord has a statutory duty to make a diligent effort to repair or remedy a condition if:

1. The condition materially affects the physical health or safety of an ordinary tenant, or arises from the landlord's failure to provide hot water (minimum temperature of 120°F);
2. The tenant has given written notice of the condition to the landlord (or landlord's managing agent);
3. The tenant is current on all rent payments at the time the repair notice is given; and
4. The condition was not caused by the tenant, a member of the tenant's family, or a guest of the tenant through negligence, misuse, or willful destruction.

The 7-Day Statutory Notice & Cure Presumption (§ 92.056(d))

• The landlord is allowed a reasonable time to repair or remedy the condition after receiving the tenant's written notice.
• The statute establishes a rebuttable presumption that seven (7) calendar days constitutes a reasonable time, taking into account the severity of the condition and the availability of materials and labor.

Tenant Statutory Remedies for Failure to Repair (§ 92.0561, § 92.0563)

If the landlord fails to repair within a reasonable time after proper statutory notice, the tenant may pursue specific statutory remedies:

• Remedy 1: Lease Termination (§ 92.056(e)(1)): The tenant may terminate the lease immediately, vacate the premises, and receive a full pro-rata refund of unearned rent and refund of the security deposit without deduction for termination fees.
• Remedy 2: Repair and Deduct (§ 92.0561): The tenant may hire a licensed contractor to make the repair and deduct the actual cost from subsequent rent payments, subject to a statutory ceiling of ONE MONTH'S RENT or $500, whichever is greater.
• Remedy 3: Judicial Relief (§ 92.0563): The tenant may file a civil suit in justice court (small claims) to obtain an order directing the landlord to repair, a reduction in rent proportional to the loss of value, actual damages, a statutory penalty of one month's rent plus $500, court costs, and attorney's fees.

2. Mandatory Security Devices, Locks & Smoke Alarms

Under Texas Property Code §§ 92.151–92.170 (Subchapter D), residential rental units must be equipped with specific operational security devices at the landlord's sole expense without requiring a tenant request:

Required Security Devices on Residential Rental Units (§ 92.153)

1. Window Latches: A pin lock, cam latch, or window sash latch on every exterior window.
2. Door Viewers (Peepholes): A permanent peephole or clear glass pane installed in each exterior door.
3. Keyless Bolting Devices (Keyless Deadbolts): A door lock (keyless deadbolt) not operable from the outside, operable only by knob, lever, or interior key, installed on every exterior door (excluding doors leading to attached garages or exterior sliding doors).
4. Keyed Deadbolt or Doorknob Lock: At least one exterior door must have a keyed deadbolt or keyed doorknob lock to permit tenant entry from the exterior.
5. Sliding Glass Door Devices: Both a sliding glass door handle latch or security bar (Charlie bar) and a sliding door pin lock.

┌─────────────────────────────────────────────────────────────────────────────┐
│                     MANDATORY RESIDENTIAL SECURITY DEVICES                  │
├─────────────────────────────────────────────────────────────────────────────┤
│  • Window Latches: On all exterior windows                                  │
│  • Keyless Bolting Device: Interior deadbolt with NO exterior keyhole on   │
│    every exterior door (cannot be picked or unlocked from outside)          │
│  • Keyed Deadbolt / Entry Lock: On at least one primary entrance door       │
│  • Door Viewer (Peephole): On all exterior doors                            │
│  • Sliding Glass Door Locks: Pin lock + security bar / latch                │
│                                                                             │
│  RE-KEYING REQUIREMENT (§ 92.156):                                          │
│  Landlord MUST re-key all exterior locks within 7 CALENDAR DAYS after       │
│  each tenant turnover date at landlord's expense!                           │
└─────────────────────────────────────────────────────────────────────────────┘

Mandatory 7-Day Re-Keying Rule at Tenant Turnover (§ 92.156)

• The landlord MUST re-key all exterior locks within seven (7) calendar days after each tenant turnover date (the date a new tenant moves in).
• The re-keying cost is strictly the landlord's legal obligation and cannot be passed to the incoming tenant as a mandatory lease fee.

Smoke Alarms & Carbon Monoxide Mandates (§§ 92.251–92.264)

• Smoke alarms must be installed in each bedroom or sleeping room and in the hallway or corridor immediately outside sleeping areas.
• In multi-level dwellings, at least one smoke alarm must be installed on each level.
• Landlords must test smoke alarms at tenant move-in and replace batteries or defective units within a reasonable time upon written tenant request.

3. Security Deposit Accounting & Surrender Protocols

Security deposits in Texas residential leasing are governed by Texas Property Code §§ 92.101–92.109:

The 30-Day Accounting & Refund Rule (§ 92.103)

• A landlord must refund a security deposit to the tenant on or before the 30th day after the date the tenant surrenders the premises.
• Condition Precedent: The tenant must provide the landlord with a written statement of the tenant's forwarding address for purpose of refunding the security deposit (§ 92.107). However, the tenant's failure to provide a forwarding address does not forfeit the deposit; it merely pauses the landlord's 30-day accounting clock until written notice is received.

Itemized Deductions vs. Normal Wear and Tear (§ 92.104)

• The landlord cannot deduct for normal wear and tear (deterioration that results from intended normal use, such as minor scuffs on walls or worn carpet traffic patterns).
• If the landlord retains any portion of the deposit, the landlord must provide the tenant with the balance of the deposit plus a written, itemized description and list of all deductions.

Bad Faith Penalties (§ 92.109)

• A landlord who in bad faith fails to return a deposit or provide an itemized list within 30 days is legally presumed to have acted in bad faith.
• Statutory Liability: The landlord is liable for a statutory penalty of $100 + three times the portion of the deposit wrongfully withheld (Treble Damages), plus court costs and reasonable attorney's fees.

4. Seller's Disclosure Notice (Texas Property Code § 5.008)

Under Texas Property Code § 5.008, a seller of single-family residential real property (1 to 4 units) must deliver a written Seller's Disclosure Notice to the prospective purchaser disclosing all known physical conditions and material defects.

The 11 Statutory Exemptions from the Seller's Disclosure Notice (§ 5.008(e))

The Seller's Disclosure Notice is NOT required for conveyances pursuant to:

1. Court Order: A court order or foreclosure sale, including bankruptcy trustee sales;
2. Mortgage Foreclosure: A foreclosure sale or deed in lieu of foreclosure;
3. Fiduciary Administration: A sale by a fiduciary in the administration of a decedent's estate, guardianship, conservatorship, or testamentary trust;
4. Co-Owner Transfer: A transfer from one co-owner to one or more other co-owners;
5. Spousal Transfer: A transfer between spouses in a divorce or legal separation settlement;
6. Lineal Relative Transfer: A transfer to a person in the lineal line of consanguinity (parent to child, grandparent to grandchild);
7. Governmental Transfer: A transfer to or from any governmental entity;
8. New Home Construction: A transfer of a newly constructed residential dwelling that has never previously been occupied;
9. Low-Value Improvement: A transfer of real property where the value of the dwelling does not exceed 5% of the total property value;
10. Lender Foreclosure Resale (REO): Transfer by a mortgagee or beneficiary who acquired property via foreclosure or deed in lieu of foreclosure;
11. Tax Sale: Transfer pursuant to a tax sale or sheriff's tax execution.

Buyer's Statutory Termination Right for Non-Delivery (§ 5.008(f))

• Under Paragraph 7B(2) of the TREC One to Four Family Residential Contract, if the Seller's Disclosure Notice is delivered after the effective date of the contract, the buyer has seven (7) calendar days after receiving the notice to terminate the contract for any reason and receive a full refund of earnest money.
• If the seller never delivers the notice, the buyer may terminate the contract at any time prior to closing and receive a full refund of earnest money.

5. Specialized Statutory Property Disclosures

Texas real estate transactions involve several mandatory statutory notices beyond the standard Seller's Disclosure Notice:

1. Municipal Utility District (MUD) Disclosure (Texas Water Code § 49.452)

• When Required: If real property is located within a district created under Texas law to provide water, sanitary sewer, drainage, or flood control facilities (such as a MUD, WCID, or Fresh Water Supply District) that has the authority to issue bonds and levy ad valorem taxes.
• Required Notice Contents: Must disclose the district's total bonded indebtedness, authorized but unissued debt, current ad valorem tax rates, and any standby fees.
• Buyer Statutory Remedies:
  • If notice is not delivered prior to contract execution, the buyer may terminate the contract prior to closing.
  • If the transaction closes without the buyer receiving the statutory MUD notice, the buyer may sue the seller for actual damages or up to $5,000 in statutory damages, plus court costs and attorney's fees (§ 49.454).

2. Public Improvement District (PID) Disclosure (Texas Property Code § 5.014)

• When Required: If property is situated within a Public Improvement District (PID) where a municipality or county levies special assessments for infrastructure (roads, parks, streetlights).
• Statutory Requirement: The seller must provide a separate written statutory PID notice executed prior to the signing of a binding purchase contract. If not provided before execution, the buyer has the right to terminate before closing.

3. Statutory Coastal & Beach Disclosures

• Gulf Intracoastal Waterway Notice (Tex. Nat. Res. Code § 61.025): Required for properties adjoining the Gulf Intracoastal Waterway; warns that property may become submerged and subject to public easements.
• Coastal Area Property Notice (Tex. Nat. Res. Code § 33.135): Discloses that boundaries of coastal property abutting tidally influenced waters are subject to natural erosion, accretion, and public beach easements (Texas Open Beaches Act).

4. Federal Lead-Based Paint Disclosure (42 U.S.C. § 4852d / TREC Form OP-L)

• Scope: Applies to all residential 'target housing' constructed prior to 1978.
• Mandatory Disclosure Steps: Seller/landlord must disclose known lead-based paint hazards, provide all available inspection reports, and deliver the EPA pamphlet 'Protect Your Family from Lead in Your Home'.
• 10-Day Inspection Right: Buyers must be granted a 10-day period (or mutually agreed timeframe) to conduct an independent lead hazard inspection before becoming bound, unless waived in writing.

6. Texas Statutory Real Estate Disclosures Summary Matrix

The following matrix summarizes the essential statutory real estate disclosures in Texas transactions: