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.