By Uresti, Reyna of Bexar H.B. No. 2803
77R8173 AJA-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to refund or retention by a landlord of a security deposit
1-3 under a commercial lease.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 93, Property Code, is amended by adding
1-6 Sections 93.004-93.011 to read as follows:
1-7 Sec. 93.004. SECURITY DEPOSIT. A security deposit is any
1-8 advance of money, other than a rental application deposit or an
1-9 advance payment of rent, that is intended primarily to secure
1-10 performance under a lease of commercial rental property.
1-11 Sec. 93.005. OBLIGATION TO REFUND SECURITY DEPOSIT. (a)
1-12 Except as provided by Section 93.009, the landlord shall refund a
1-13 security deposit to the tenant on or before the 30th day after the
1-14 date the tenant surrenders the premises.
1-15 (b) A requirement that a tenant give advance notice of
1-16 surrender as a condition for refunding the security deposit is
1-17 effective only if the requirement is underlined or is printed in
1-18 conspicuous bold print in the lease.
1-19 (c) The tenant's claim to the security deposit takes
1-20 priority over the claim of any creditor of the landlord, including
1-21 a trustee in bankruptcy.
1-22 Sec. 93.006. RETENTION OF SECURITY DEPOSIT; ACCOUNTING. (a)
1-23 Before returning a security deposit, the landlord may deduct from
1-24 the deposit damages and charges for which the tenant is legally
2-1 liable under the lease or damages and charges that result from a
2-2 breach of the lease.
2-3 (b) The landlord may not retain any portion of a security
2-4 deposit to cover normal wear and tear. In this subsection, "normal
2-5 wear and tear" means deterioration that results from the intended
2-6 use of the commercial premises, including breakage or malfunction
2-7 due to age or deteriorated condition, but the term does not include
2-8 deterioration that results from negligence, carelessness, accident,
2-9 or abuse of the premises, equipment, or chattels by the tenant or
2-10 by a guest or invitee of the tenant.
2-11 (c) If the landlord retains all or part of a security
2-12 deposit under this section, the landlord shall give to the tenant
2-13 the balance of the security deposit, if any, together with a
2-14 written description and itemized list of all deductions. The
2-15 landlord is not required to give the tenant a description and
2-16 itemized list of deductions if:
2-17 (1) the tenant owes rent when the tenant surrenders
2-18 possession of the premises; and
2-19 (2) no controversy exists concerning the amount of
2-20 rent owed.
2-21 Sec. 93.007. CESSATION OF OWNER'S INTEREST. (a) If the
2-22 owner's interest in the premises is terminated by sale, assignment,
2-23 death, appointment of a receiver, bankruptcy, or otherwise, the new
2-24 owner is liable for the return of the security deposit according to
2-25 this chapter from the date title to the premises is acquired,
2-26 regardless of whether an acknowledgement is given to the tenant
2-27 under Subsection (b).
3-1 (b) The person who no longer owns an interest in the rental
3-2 premises remains liable for a security deposit received while the
3-3 person was the owner until the new owner delivers to the tenant a
3-4 signed statement acknowledging that the new owner has received and
3-5 is responsible for the tenant's security deposit and specifying the
3-6 exact dollar amount of the deposit. The amount of the security
3-7 deposit is the greater of:
3-8 (1) the amount provided in the tenant's lease; or
3-9 (2) the amount provided in an estoppel certificate
3-10 prepared by the owner at the time the lease was executed or
3-11 prepared by the new owner at the time the commercial property is
3-12 transferred.
3-13 (c) Subsection (a) does not apply to a real estate mortgage
3-14 lienholder who acquires title by foreclosure.
3-15 Sec. 93.008. RECORDS. The landlord shall keep accurate
3-16 records of all security deposits.
3-17 Sec. 93.009. TENANT'S FORWARDING ADDRESS. (a) The landlord
3-18 is not obligated to return a tenant's security deposit or give the
3-19 tenant a written description of damages and charges until the
3-20 tenant gives the landlord a written statement of the tenant's
3-21 forwarding address for the purpose of refunding the security
3-22 deposit.
3-23 (b) The tenant does not forfeit the right to a refund of the
3-24 security deposit or the right to receive a description of damages
3-25 and charges for failing to give a forwarding address to the
3-26 landlord.
3-27 Sec. 93.010. LIABILITY FOR WITHHOLDING LAST MONTH'S RENT.
4-1 (a) The tenant may not withhold payment of any portion of the last
4-2 month's rent on grounds that the security deposit is security for
4-3 unpaid rent.
4-4 (b) A tenant who violates this section is presumed to have
4-5 acted in bad faith. A tenant who in bad faith violates this
4-6 section is liable to the landlord for an amount equal to three
4-7 times the rent wrongfully withheld and the landlord's reasonable
4-8 attorney's fees in a suit to recover the rent.
4-9 Sec. 93.011. LIABILITY OF LANDLORD. (a) A landlord who in
4-10 bad faith retains a security deposit in violation of this chapter
4-11 is liable for an amount equal to the sum of $100, three times the
4-12 portion of the deposit wrongfully withheld, and the tenant's
4-13 reasonable attorney's fees incurred in a suit to recover the
4-14 deposit after the period prescribed for returning the deposit
4-15 expires.
4-16 (b) A landlord who in bad faith does not provide a written
4-17 description and itemized list of damages and charges in violation
4-18 of this chapter:
4-19 (1) forfeits the right to withhold any portion of the
4-20 security deposit or to bring suit against the tenant for damages to
4-21 the premises; and
4-22 (2) is liable for the tenant's reasonable attorney's
4-23 fees in a suit to recover the deposit.
4-24 (c) In a suit brought by a tenant under this chapter, the
4-25 landlord has the burden of proving that the retention of any
4-26 portion of the security deposit was reasonable.
4-27 (d) A landlord who fails to return a security deposit or to
5-1 provide a written description and itemized list of deductions on or
5-2 before the 30th day after the date the tenant surrenders possession
5-3 is presumed to have acted in bad faith.
5-4 SECTION 2. This Act applies only to a lease of commercial
5-5 rental property entered into or renewed on or after the effective
5-6 date of this Act.
5-7 SECTION 3. This Act takes effect September 1, 2001.
5-8 COMMITTEE AMENDMENT NO. 1
5-9 Amend H.B. 2803 as follows:
5-10 1. Strike Subsection 39.005(a) and substitute the following:
5-11 "The landlord shall refund the security deposit to the
5-12 tenant not later than the 60th day after the tenant surrenders the
5-13 premises and provides notice of tenant's forwarding address under
5-14 Section 93.009."
5-15 2. Strike Subsection 93.005(b) and renumber subsequent
5-16 subsections accordingly.
5-17 Brimer