BILL ANALYSIS C.S.H.B. 3027 By: Ehrhardt 5-2-95 Committee Report (Substituted) BACKGROUND Texas law and lease agreements provide tenants with rights and privileges; however, the law does not generally protect tenants against retaliating landlords. For example, Texas law protects tenants from retaliation for requesting repairs from landlords, however, there is no protection given to tenants who complain to code enforcement officers about conditions of their home. As a result, many tenants are discouraged from reporting health and safety hazards, or exercising other rights provided by Texas law or the lease agreement, for fear of retaliation. PURPOSE This bill would provide protection for tenants who, in good faith, exercise rights granted to the tenant by the lease, by federal or state statute or by municipal ordinance. This extends to complaints that are made to code enforcement agencies or civic or nonprofit organizations. This bill would also strengthen existing law which protects tenants from retaliatory evictions which arise out of requests for repairs. It also protects landlords from actions under the statute which are intended to harass the landlord or are filed or prosecuted in bad faith. 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 Chapter 92, Property Code, and creates a new Subchapter H, entitled "RETALIATION." Sec. 92.280 RETALIATION BY LANDLORD. (a) Details the scope under which a landlord is prohibited from retaliating when a tenant: (1) exercises, in good faith, rights which arise out of statute or a lease (2) gives the landlord a notice to repair, or (3) complains to certain third parties, and (A) the claim is for code violations or utility problems, and (B) the tenant believes in good faith that the claim is valid. (b) Specifies the term under which a landlord is prohibited from retaliation and defines retaliatory actions as those taken when a landlord: (1) files an eviction not permitted under this subsection (2) Deprives the tenant of the use of the premises (3) Decreases services (4) Increases the tenant's rent or terminates the tenant's lease (5) Engages, in bad faith, in conduct which interferes with the tenant's rights under the lease Sec. 92.281 NONRETALIATION. (a) Creates a defense for the landlord against a tenant's claim of retaliation when the landlord can prove that an action was not taken for the purpose of retaliation, or: (1) rent was increased under a certain escalation clause, or (2) rent increases or reduced services applied to an entire rental project. (b) Specifies that certain situations under which a lease termination or eviction would not constitute retaliation, if: (1) the tenant is delinquent in paying rent, or (2) the tenant or tenant's family or guests intentionally damage the property or threatens the personal safety of the landlord, the landlord's employees or other tenants (3) violates written lease provisions prohibiting serious misconduct or criminal acts. (4) the tenant holds over after giving notice of termination or intent to vacate. (5) the tenant holds over and the landlord gives notice of termination before the tenant takes the above protected action. (6) notice to terminate is given in good faith by a landlord in order to prevent; (A) disruption of quiet enjoyment by other tenants or neighbors. (B) material jeopardy of the health or safety of the tenants, landlord or neighbors, or (C) damage the property of the foregoing. Sec. 92.282. TENANT REMEDIES. Provides remedies under suit for retaliation and permits recovery of a civil penalty of one months rent plus $500, and further sets recoverable rent on subsidized housing at the fair market rent for that dwelling. The tenant may also recover actual damages, court costs, reasonable attorney's fees and declaratory or injunctive relief. Sec. 92.283. SUITS ON INVALID COMPLAINTS. (a) Establishes remedies for the landlord who, in defense against a retaliation suit, is able to prove that is was brought in bad faith. A rebuttable presumption of bad faith may be documented by a government building or housing inspector or utility company representative, who by on-site inspection determines that the violation does not exist. (b) Permits the landlord to recover possession of the dwelling in question and a civil penalty of one month's rent (or fair market rent on subsidized housing) plus $500, court costs and reasonable attorney's fees. Sec. 92.284. EVICTION SUITS. Establishes retaliation by a landlord under this chapter as a defense against an eviction suit. SECTION 2. Provides an effective date for the Act of September 1, 1995. SECTION 3. Emergency Clause COMPARISON OF ORIGINAL TO SUBSTITUTE SECTION 1. The substitute amends Chapter 92 (the original amends Chapter 91) of the Property Code by creating a new Subchapter H, entitled "RETALIATION." Sec. 92.280 RETALIATION BY LANDLORD. (a) Broadens the existing law prohibiting retaliation as specified in the original bill, except that it does not protect against retaliation for joining or organizing a tenant organization, and that: (1) the words "statute" and "ordinance" replace references to "federal, state, or local law"; (3) expands protected complaints to include those made to public utilities and civic or nonprofit agencies, and; (A) removes the requirement that the complaint regard a violation that materially affects health and safety, but requires that the complaint be for a building or housing code violation. (B) requires a good faith belief by the tenant that the complaint is valid. (b) Removes the standard for a rebuttable presumption of retaliation, and decreases the term of prohibition against retaliation from one year to six months. Changes the prohibited actions of a landlord by: (1) changing the grounds for allowable evictions as detailed in Sec. 92.281 (b) (5) adding a prohibition against engaging, in bad faith, in material interference with the tenants' rights under the lease (the original bill prohibited a pattern of harassment which interfered with the peaceful enjoyment of the premises). Sec. 92.281 NONRETALIATION. (a) The substitute extends a defense against a charge of retaliation to a landlord if he can prove that the action in question was not made for the purpose of retaliation and, unless the action violates a prior court order, exemptions are included for; (1) increasing rent under an escalation clause in a written lease for utilities, taxes, or insurance; or (2) increasing rent or reducing services as part of a pattern for an entire multi-dwelling project. (b) Broadens the exclusions for evictions and lease terminations from retaliatory definition, when; (2) the tenant, a family member or a guest of the tenant intentionally damage the property or threaten the personal safety of the landlord, the landlord's employees, or another tenant. (3) violates written lease provisions prohibiting serious misconduct or criminal acts. (4) the tenant holds over after giving notice of termination or intent to vacate. (5) the tenant holds over and the landlord gives notice of termination before the tenant takes the above protected action. (6) notice to terminate is given in good faith by a landlord in order to prevent; (A) disruption of quiet enjoyment by other tenants or neighbors. (B) material jeopardy of the health or safety of the tenants, landlord or neighbors, or (C) damage the property of the foregoing. Sec. 92.282. TENANT REMEDIES. (a) The substitute changes the permissible recovery under suit for retaliation from three times monthly rent to one months rent plus $500, and further sets recoverable rent on subsidized housing at the fair market rent for that dwelling. The substitute adds civil penalties as a remedy. All other remedies are substantially similar to the original bill. Sec. 92.283. SUITS ON INVALID COMPLAINTS. (a) The substitute creates reciprocal remedies for the landlord who, in defense against a retaliation suit, is able to prove that is was brought in bad faith. A rebuttable presumption of bad faith may be documented by a government building or housing inspector or utility company representative, who by on-site inspection determines that the violation does not exist. (b) The substitute includes a right to recover possession of the dwelling in question and a civil penalty of one month's rent (or fair market rent on subsidized housing) plus $500, court costs and reasonable attorney's fees. Sec. 92.284. EVICTION SUITS. This is clean up language that maintains the original bill's provision that retaliation is a defense against an eviction action. SUMMARY OF COMMITTEE ACTION The Business and Industry Committee considered H.B. 3027 in a public hearing on May 2, 1995. The committee considered a complete committee substitute. No public testimony was taken on H.B. 3027. Without objection, the committee substitute was withdrawn. H.B. 3027 was left pending before the committee. The committee reconsidered H.B. 3027 on May 2, 1995. The committee considered a complete committee substitute. The committee substitute was adopted without objection. H.B. 3027, as substituted, was reported favorably with the recommendation that it do pass and be printed by a record vote of 6 (six) ayes, 0 (zero) absent, 0 (zero) present-not-voting, 3 (three) absent.