BILL ANALYSIS



C.S.H.B. 2803
By: Naishtat
4-25-95
Committee Report (Substituted)


BACKGROUND

Texas law does not address when a landlord can interrupt utility
service where the utility payment is included in the monthly rent
— "all-bills-paid units."  As a result, it is not uncommon for
landlords to cut off a tenant's gas, water or electricity when the
tenant is late in paying the rent or when the landlord believes
there is some other violation of the lease agreement.  

Many times the tenant may be in a dispute with the landlord about
a provision in the lease or the amount due; however, the landlord
has the ultimate authority because of his or her ability to cutoff
service.  Other times tenants may only be a day or two late in
paying rent, but be penalized with spoiled food, no alarm clock, no
lights (resulting in a more dangerous environment), no water for
washing or flushing a toilet, no air conditioning or heat, or no
ability to cook.  In short, the tenant's home can be rendered
essentially uninhabitable, without any notice, for any alleged
violations of the lease.

PURPOSE

This Bill prohibits intentional interruption of utility service
furnished to the tenant as an incident of the tenancy — all-bills-paid units — for alleged violations of the lease agreement. 
Landlords could still interrupt utilities for bona fide repairs,
construction or emergencies.  Landlords could also interrupt
electrical service for delinquent rent if: the tenant is seven days
delinquent in paying the rent, a five day advance notice is given
by the landlord (stating the amount of rent owed, the name and
location of the person to whom the rent is to be paid), the
interruption occurs during business hours (and does not begin on a
day or day prior to a day the office is closed).  If an
interruption occurs because of delinquent payment, the landlord
would have to restore the service within two hours of being
tendered the funds.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 92.008, Property Code, by renaming it
"INTERRUPTION OF UTILITIES".  (a) Left intact.

Adds the following subsections under this Section:

     (b) Prohibits interruption of utility service where the
     service is furnished to the tenant as an incident of the
     tenancy.  Exempts cases where the interruption results from
     bona fide repairs, construction, or an emergency.

     (c) Allows interruption of electrical service where the
     service is individually metered, the service is in the
     landlord's name, and the landlord complies with applicable
     rules regarding notice and cure adopted by the Public Utility
     Commission of Texas.

     (d) Allows interruption of the electrical service where the
     service is not individually metered; the tenant is at least
     seven days delinquent in paying the rent; the landlord has
     given a five day notice to the tenant stating the earliest
     date of the proposed interruption, the amount of rent owed,
     and to whom the rent may be paid; and the interruption does
     not begin outside of normal business hours and not on a day
     (or a day preceding a day) when the landlord in not available
     to accept rent and restore service.

     (e) Requires the landlord who interrupts the electrical
     service for delinquent payment of the electrical bill or the
     rent to restore the electrical service within two hours of the
     funds being tendered to the landlord.

     (f) Provides the same remedies to tenants as the former
     subsection 92.008(e) which include recovering possession and
     recover for the landlord and amount equal to the sum of the
     tenant's actual damages incurred.

     (g) Prohibits the landlord from modifying this section in a
     lease agreement as the former subsection 92.008(f).

Creates Section 92.0081, Property Code,titled "REMOVAL OF PROPERTY
AND EXCLUSION OF RESIDENTIAL TENANT", by taking subsections (b)-(f)
of the former 92.008 and restating them as subsections (a)-(e) of
the new section.

SECTION 2.  Establishes the effective Date as September 1, 1995.

SECTION 3. Emergency Clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The Committee Substitute for House Bill 2803 differs from the
original in that the substitute under SECTION 1, Section 92.008
allows a landlord to interrupt electrical service where:  the
tenant is seven days delinquent in paying the rent; the landlord
has given a five day notice to the tenant stating the earliest date
of the proposed interruption, the amount of rent owed, and to whom
the rent may be paid; and the interruption does not begin outside
of normal business hours and not on a day (or a day preceding a
day) when the landlord in not available to accept rent and restore
service.  A landlord who interrupts electrical service for
delinquent payment of an electrical bill or for rent, must restore
electrical service within two hours of the funds being tendered to
the landlord. If the landlord or landlord's agent is in violation
of these procedures, may recover possession or terminate the lease
and recover from the landlord an amount equal to the actual damages
incurred by the tenant. Also voids a provision of a lease that
waives the right or exempts a party from liability or duty.   

The substitute creates a new Section 92.0081 and entitles it:
"Removal of Property and Exclusion of Residential Tenant". This
section removes subsections (b)-(f) of the former Section 92.008
and reletters them as subsections (a)-(e) to incorporate them into
the new section. 

SUMMARY OF COMMITTEE ACTION

The Committee on Business and Industry considered H.B. 2803 in a
public hearing on April 25, 1995.  Testifying in support of H.B.
2803 was Larry Niemann, representing Texas Apartment Association. 
The committee considered a complete committee substitute for the
bill.  The committee substitute was adopted without objection. 
H.B. 2803 was reported favorably as substituted with the
recommendation that it do pass and be printed and be sent to the
Committee on Local and Consent Calendars, by a record vote of 6
(six) ayes, 0 (zero) nays, 0 (zero) present-not-voting, 3 (three)
absent.