Bill Text: TX HB3541 | 2021-2022 | 87th Legislature | Comm Sub
Bill Title: Relating to a fee collected by a landlord in lieu of a security deposit.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2021-05-14 - Returned to Local & Consent Calendars Comm. [HB3541 Detail]
Download: Texas-2021-HB3541-Comm_Sub.html
87R19842 NC-D | |||
By: Turner of Tarrant | H.B. No. 3541 | ||
Substitute the following for H.B. No. 3541: | |||
By: Turner of Tarrant | C.S.H.B. No. 3541 |
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relating to a fee collected by a landlord in lieu of a security | ||
deposit. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subchapter C, Chapter 92, Property Code, is | ||
amended by adding Section 92.111 to read as follows: | ||
Sec. 92.111. FEE IN LIEU OF SECURITY DEPOSIT. (a) If a | ||
security deposit is required by a residential lease, the landlord | ||
may choose to offer the tenant an option to pay a fee in lieu of a | ||
security deposit. If a landlord offers a tenant the option of | ||
paying a fee in lieu of a security deposit, the landlord: | ||
(1) shall offer the tenant the option to instead pay a | ||
security deposit; and | ||
(2) may not use a prospective tenant's choice to pay a | ||
fee in lieu of a security deposit or a security deposit as a | ||
criterion in the determination of whether to approve an application | ||
for occupancy. | ||
(b) At the time a landlord offers to a tenant the option of | ||
paying a fee in lieu of a security deposit, the landlord shall | ||
notify the tenant in writing: | ||
(1) that the tenant has the option to instead pay a | ||
security deposit; | ||
(2) that the tenant has the option to terminate the | ||
agreement to pay the fee in lieu of a security deposit at any time | ||
and stop paying the fee, and instead, to pay a security deposit in | ||
the amount that is otherwise offered to new tenants for | ||
substantially similar housing on the date the tenant chooses to pay | ||
the security deposit; and | ||
(3) of the charges for each option described by | ||
Subdivision (1) or (2). | ||
(c) If the tenant decides to pay a fee in lieu of a security | ||
deposit, an agreement to collect the fee must be in writing and | ||
signed by: | ||
(1) the landlord or the landlord's legal | ||
representative; and | ||
(2) the tenant. | ||
(d) A fee in lieu of a security deposit must be: | ||
(1) a recurring fee of equivalent amount; and | ||
(2) payable at the time each rent payment is due during | ||
the lease. | ||
(e) A fee collected under this section may be used to | ||
purchase insurance coverage for damages and charges for which the | ||
tenant is legally liable under the lease or as a result of breaching | ||
the lease. A landlord may not charge the tenant a fee that is more | ||
than the reasonable cost of obtaining and administering the | ||
insurance purchased under this subsection. | ||
(f) If the tenant decides to pay a fee in lieu of a security | ||
deposit and the landlord purchases insurance coverage as described | ||
by Subsection (e), an agreement required under Subsection (c) must | ||
clearly specify the following terms: | ||
(1) the fee is being paid only to secure occupancy | ||
without a requirement of paying a security deposit; | ||
(2) the fee, unless otherwise specified, is not | ||
refundable; | ||
(3) payment of the fee, unless otherwise specified, | ||
does not eliminate, release, or otherwise limit the requirements of | ||
the lease, including that the tenant must pay for: | ||
(A) rent as the rent becomes due; and | ||
(B) damages for which the tenant is legally | ||
liable under the lease, other than normal wear and tear; and | ||
(4) the fee, unless otherwise specified, is not paying | ||
for insurance that covers the tenant or otherwise changes the | ||
tenant's obligation to pay rent and damages beyond normal wear and | ||
tear. | ||
(g) Except as provided by Subsection (h), a fee collected | ||
under this section is a security deposit for purposes of this | ||
chapter. | ||
(h) A fee collected under this section is not a security | ||
deposit for purposes of this chapter if: | ||
(1) an agreement was signed under Subsection (c); and | ||
(2) the fee is used to purchase insurance coverage for | ||
damages and unpaid rent for which the tenant is legally liable under | ||
the lease or as a result of breaching the lease. | ||
(i) A landlord may not charge a tenant for normal wear and | ||
tear of a dwelling. | ||
(j) A landlord may not submit a claim for damages or unpaid | ||
rent to an insurer for insurance described by Subsection (e) unless | ||
the landlord notifies the tenant of the damages or unpaid rent | ||
indebtedness not later than the 30th day after the date the tenant | ||
surrendered possession of the dwelling. The notice must include a | ||
written description and itemized list of all damages, if any, and of | ||
unpaid rent, if any, including the dates the rent payments were due. | ||
(k) If the tenant challenges the claim for damages or unpaid | ||
rent and that challenge results in a determination by the landlord | ||
or by a court that the notice of indebtedness is incorrect, the | ||
indebtedness is void and the landlord may not file an insurance | ||
claim for insurance purchased under Subsection (e) in the amount of | ||
the voided indebtedness. If the landlord has already submitted to | ||
the insurer a claim for the voided indebtedness, the claim must be | ||
withdrawn. If the insurance company has already paid the landlord | ||
for the invalidated claim, the landlord shall return the payment. | ||
(l) If an insurer compensates a landlord for a tenant's | ||
damages or unpaid rent under a valid claim: | ||
(1) the landlord may not seek or collect reimbursement | ||
from the tenant of the amounts that the insurer paid to the | ||
landlord; | ||
(2) the insurer that has paid a landlord after receipt | ||
of a claim filed by a landlord, if allowed by a subrogation clause | ||
in the insurance described by Subsection (e) and before the first | ||
anniversary of the termination of the tenant's occupancy, may seek | ||
reimbursement from the tenant of only the amounts paid to the | ||
landlord; and | ||
(3) the tenant is entitled to any defenses to payment | ||
against the insurer as against the landlord. | ||
(m) If an insurer seeks reimbursement under Subsection | ||
(l)(2), the insurer must include in the reimbursement demand: | ||
(1) evidence of damages or unpaid rent that the | ||
landlord submitted to the insurer; | ||
(2) evidence of damage repair costs that the landlord | ||
submitted to the insurer; and | ||
(3) a copy of the settled claim that documents | ||
payments made by the insurer to the landlord. | ||
SECTION 2. Section 92.111, Property Code, as added by this | ||
Act, applies only to a lease entered into or renewed on or after the | ||
effective date of this Act. A lease entered into or renewed before | ||
the effective date of this Act is governed by the law as it existed | ||
immediately before the effective date of this Act, and that law is | ||
continued in effect for that purpose. | ||
SECTION 3. This Act takes effect September 1, 2021. |