GEC H.B. 2291 75(R)    BILL ANALYSIS


BUSINESS & INDUSTRY
H.B. 2291
By: Naishtat
4-18-97
Committee Report (Unamended)



BACKGROUND 

Prior to a recent Texas Supreme Court decision, a landlord did not have
any duty to mitigate (minimize) damages arising from a tenant's failure to
complete the full term of a lease agreement. Tenants often face
situations, such as job transfers, that force them to vacate their homes
before the lease is up.  Landlords were able to collect their rents
without any obligation to attempt to locate another tenant to pay rent in
their stead.  In Austin Hill Country Realty v. Palisades Plaza, 40 Tex.
Sup. Ct. J. 228 (Jan. 10, 1997), the Texas Supreme Court recognized the
unfair results of such scheme and issued a written opinion requiring
landlords to attempt to mitigate damages. This application is not a
stretch of existing law because a duty to mitigate already exists for
other contractual relationships.  This bill would merely codify the Texas
Supreme Court's ruling. 

PURPOSE

The bill requires a landlord to attempt to lessen its damages if the
tenant abandons the leased premises in violation of the lease, and would
not allow a landlord to limit this duty in the lease agreement. 

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.  Adds Section 91.006 to Property Code:

(a) Requires a landlord to mitigate damages if a tenant abandons the lease
premises in violation of the lease. 

(b) Eliminates a landlord's ability to waive this duty in the lease
agreement. 

Section 2.  The Act applies only to leases entered into on or after the
effective date of the Act. 

Section 3.  Effective date.

Section 4.  Emergency clause.