A tenant requested that he be allowed to have an assistance animal in the rental property as a reasonable accommodation because he has a disability. The property owner normally requires a pet deposit. Can the property owner require that the tenant pay a pet deposit as a condition for allowing the assistance animal in the rental property?

No. A property owner cannot require a tenant to pay a pet deposit or any other additional deposit as a condition for allowing an assistance animal in a rental property. A reasonable accommodation request for an assistance animal cannot be conditioned on the payment of such a fee, However, a tenant with an assistance animal will still be considered legally responsible for any damage caused by that animal.

I represented a tenant and I would like a copy of the lease agreement the tenant signed. The landlord’s agent refused to give me a copy. As the tenant’s agent, am I entitled to receive a copy of the lease agreement?

Nothing prohibits you from receiving a copy of the lease agreement. The lease does not contain personal identifying information that would prohibit the landlord’s agent from providing a copy, so the landlord’s agent may not use this as a justification. However, nothing requires the landlord or the landlord’s agent to give you one. You were right to ask the landlord’s agent first for a copy of the lease agreement. Because he refused, you could ask the tenant directly, because the tenant is required to receive a copy. (Chapter 1101.652 (b)(28) of The Real Estate License Act allows TREC to take disciplinary action against a broker or salesperson who refuses to provide a copy of a document related to a transaction to a person who signed the document.)

A prospective tenant wants to lease a property that I manage. The prospect owns a pit bull. May I refuse to lease to the tenant, who is otherwise qualified? If I do lease the property to him, what type of precautions should I take?

A landlord may refuse to lease properties to persons who own animals or who own certain types of animals (for example, pit bulls). The landlord must be careful to consistently enforce such a policy. The issue of a dangerous pet or animal on a property can impose liability issues both for the tenant and the landlord. There have been a few reported cases in which dogs, which allegedly had viscous propensities, bit neighbors, including children. The liability in such cases typically turns on the issue of control. Which party—landlord, tenant, or both—exercised control over the property and pet? Clearly, the tenant may be liable, as he exercises control over the pet and the property. Many times, however, landlords retain certain rights to enter the property and exercise some degree of control, although minimal. Briefly, the liability issue for the landlord may depend on what the landlord knew related to the pet's history and propensities, any requirements the landlord imposed on the tenant related to the pet, and what the landlord knew of the tenant's care of the pet. In situations where the landlord is contemplating leasing to a tenant who has a dangerous pet, the landlord is well-advised to seek the advice of counsel to draft a specific addendum to the lease to address issues such as containment requirements, signage, locks, and insurance.

A prospective tenant for a property I manage uses a wheelchair. He wants to build a ramp to the front door, widen two bathroom doors, and install grab bars in the bathroom. If he becomes a tenant, what modifications does the owner have to allow?

The landlord must permit reasonable modifications necessary to afford the disabled tenant full enjoyment of the property, such as the modifications described. 

To protect both parties, the lease they sign should address who will arrange for the modifications, who will make decisions regarding workmen and materials, and who will pay for the modifications. For example, the lease may provide that the tenant will pay the cost either directly to any contractor or by reimbursement to the landlord, or the lease may provide that the landlord will make the modifications in exchange for a concession, such as an increase in the rent based on the cost of the modifications. 

The lease should also cover whether the property will be restored when the tenant moves out and, if it will, who will pay for the cost of such restoration.  

I'm a property manager. A tenant called me complaining that his roof was leaking. I checked with the owner and the owner gave the go-ahead for me to hire someone to fix the roof. The contractor fixed the roof and gave me a bill. The terms of the bill stated that if I pay the bill in full within two weeks, I would get a discount. If I pay the bill within two weeks, but the owner can't pay me until after two weeks, can I get a discount for paying early, but then charge the owner the regular price, keeping the difference for myself?

You may do this only with the informed consent of your client. TRELA Section 1101.652(b)(13) provides that a licensee's license may be suspended or revoked if the licensee accepts, receives, or charges an undisclosed commission, rebate, or direct profit on expenditures made for a principal. Also, Article 6 of the Code of Ethics prohibits REALTORS® from accepting any commission, rebate, or profit on expenditures made for their principal without the principal's knowledge and consent.

A tenant in one of my properties says he has been assaulted by another occupant and wants to vacate the property. Can he do that?

Yes. Section 92.016 of the Texas Property Code gives tenants the right to vacate a property and avoid liability in instances of family violence. That includes violence between lease occupants, even if they’re not related. To terminate the lease early under Section 92.016, the tenant must obtain a court order as described in the Property Code, deliver it to the landlord, and vacate the property. The Texas REALTORS® Residential Lease (TXR 2001) includes a statutory notice to tenants regarding family violence, which helps landlords avoid other penalties and losses.

How much notice does a landlord have to provide a tenant prior to filing an eviction?

It depends on the terms in the lease. The Texas Property Code requires that a tenant under a written lease or oral rental agreement receive a written notice to vacate the premises at least three days before the landlord files the eviction suit—unless the parties agree in a written lease to a different time period. This would be the case if you used the TAR Residential Lease, which requires only one day written notice to vacate prior to the landlord filing the eviction.

Can landlords ban concealed carry and open carry from their property?

Yes. Landlords can give verbal or written notice that handguns are prohibited and can ban open carry, concealed carry, or both.

Written notice to prohibit both open and concealed carry can be provided in a document such as a lease or through a posted sign.

To provide written notice to tenants in a lease, you must use the language found in Section 30.06(c)(3)(A) of the Texas Penal Code to prohibit concealed carry, and the language found in Section 30.07(c)(3)(A) of the Texas Penal Code to prohibit open carry. Both notices must be included in the lease to prohibit both open and concealed carry. An appropriate place to write these notices in the lease is in Special Provisions.

Another way to provide notice to tenants and other people entering the property is through a sign. You must conspicuously post two signs at each entrance of the property—one with the language from the Texas Penal Code Section 30.06(c)(3)(A) to forbid concealed carry, and the other with language from the Texas Penal Code Section 30.07(c)(3)(A) to forbid open carry. The language from the Texas Penal Code must be in both English and Spanish and must be printed in contrasting colors with block letters at least one inch in height.

Landlords should review their rules and regulations and update them to reflect their policy for handguns on their property. Tenants should also be notified of the landlord’s handgun policies.

I’m the property manager for a manufactured-home community in which tenants rent the lots and place their own manufactured homes on them. One tenant is two months behind on his rent. How do I start the process to evict him for nonpayment of rent?

The eviction process for nonpayment of rent in a manufactured-home community in which the tenant owns the home and rents the lot is slightly different than the eviction process in which the tenant is renting the home.

Section 94.206 of the Texas Property Code requires you to give the tenant written notice that the tenant is behind on rent. If the tenant doesn’t pay the delinquent payment in full before the 10th day after the date he receives the notice, you may terminate his lease and evict the tenant.

A tenant moved in and now says that the house is haunted. She wants to vacate. What is the best way to address the issue?

Inform her that she may be in breach of the lease if she vacates. Tell her that the landlord may exercise his default remedies under the lease. (The landlord must employ reasonable measures to mitigate any loss.) You might try to determine why she believes the house is haunted and see if there is a reasonable explanation for any mysterious circumstances. Also, ask the tenant to provide written explanations and requests for your records

I’m the listing agent for an owner leasing his single-family home. We both signed the Residential Real Estate Listing Agreement, Exclusive Right to Lease (TXR 1102). A prospective tenant called me to ask questions about the property and request a rental application. If I provide the rental application to the prospect, will this trigger an intermediary relationship?

No. Merely discussing the listing and providing the rental application will not trigger an intermediary relationship. However, if the prospective tenant requests that you represent her in the lease negotiation process, you will need to obtain her written consent for your broker to act as an intermediary. You can use the Residential Buyer/Tenant Representation Agreement (TXR 1501) for this purpose. Then you’ll need to comply with the steps required for an intermediary relationship, which apply to both sales and leasing transactions.

The same prospective tenant was approved and is now three months into his lease. He just contacted me because he's interested in purchasing the property. The tenant requested that I represent him in the purchase of the property. How do I represent the tenant if I already represent the owner? Can my broker be appointed to represent the tenant?

These facts will trigger an intermediary relationship. Since you represent the seller, you need to verify that the listing agreement permits your broker to act as an intermediary. If so, the tenant will also need to give written consent for an intermediary relationship. The Residential Buyer/Tenant Representation Agreement (TAR 1501) is sufficient for obtaining written consent. Next, you will need to determine whether it's the policy of the brokerage firm to appoint licensees to each side. If so, the broker is prohibited from appointing himself to represent the tenant. The broker will need to appoint another agent within the brokerage firm to represent the tenant. If appointments are made, the owner and the tenant will need to be provided with written notice of the appointment. The Intermediary Relationship Notice (TAR 1409) serves this purpose. Appointments are not mandatory, but they allow licensees to provide advice and opinions to the parties.

A tenant and landlord executed a TAR Residential Lease (TAR 2001). In Paragraph 4A, Box 2 was checked requiring either party to give 60 days' notice to terminate the lease. In Paragraph 4B, Box 2 was checked requiring at least 30 days’ notice if the lease renewed on a month-to-month basis. The lease automatically renewed on a month-to-month basis because neither party provided 60 days’ notice of termination as required by Paragraph 4A. The tenant now wants to terminate the lease, but the landlord is requiring the tenant to give 60 days' notice to terminate. Can the landlord require the tenant to give 60 days' notice now that the lease is on a month-to-month basis?

No. Under Paragraph 4B(2), the tenant is only required to provide 30 days’ notice.

What’s the difference between Paragraphs 4A and 4B in the Texas REALTORS® Residential Lease (TAR 2001)?

Paragraph 4A applies to the initial term of the lease. Paragraph 4B applies if the lease is on a month-to-month basis.

For example, a tenant has a one-year lease in which the expiration date of the initial term is Jan. 31. Paragraph 4A(2) is checked, which requires a 60-day notice of termination before the expiration date. If the landlord or tenant doesn’t provide the necessary written notice of termination on or before Dec. 3, a time period of 60 days, the lease will automatically renew on a month-to-month basis.

Paragraph 4B will now apply for notice of termination. The period for giving notice now will depend on whether 4B(1) or 4B(2) is checked.

Both paragraphs require written notice of termination, not verbal notice. If the landlord does not intend to renew, he should provide the Notice of Landlord’s Intent Not to Renew(TAR 2217) within the necessary time frame required under the lease.

An agent in my office wants to begin a full-service property-management practice. Can she have her own trust account to collect and disburse security deposits, rents, and other funds?

No. TREC rules make it clear that salespeople cannot have their own trust account. A broker may only authorize another license holder to withdraw or transfer funds from a trust account, but the broker herself remains responsible for all deposits to and disbursements from the broker’s trust account. Remember, a broker is responsible for all authorized acts of sponsored salespeople. You and your agent should review TREC Rule Section 535.146 before she begins her practice.

A friend of mine gets paid to manage other friends' properties. He says he doesn't need to have a real estate license to do this. Is this true?

It depends on what services your friend is providing in his property management. Under the Real Estate License Act, a license is required when a person handles the leasing of someone else’s property. Additionally, someone who controls the acceptance or deposit of rent for a single-family residential property on behalf of another person must be licensed.

A person controls the acceptance or deposit of rent if:

(1) The person has the authority to use the rent to pay for services related to management of the property; or

(2) The person has the authority to deposit the rent into a trust or bank account and sign checks or withdraw money from the account.

I received a rental application for a property I manage and presented it to the owner. He wants to wait before deciding on this applicant to see if a better match to the tenant-selection criteria comes along. How long does the landlord have to make a decision on this prospective tenant’s application?

In general, there is not a specific timeline in which a property owner must make a decision to accept or reject an applicant. In this situation, however, the landlord has seven days to make a decision on a rental application; otherwise, the applicant is deemed rejected per the Texas Property Code and any application deposit should be refunded, although the application fee is generally nonrefundable.

According to the Texas Property Code, if the landlord provided an application form, the seven-day period begins on the date the applicant submits the completed form. If the landlord did not provide an application form, the seven-day period begins on the date the property owner accepts an application deposit from the applicant.

Remember, when an applicant is provided with a rental application, the landlord is required to make printed notice of the landlord’s tenant-selection criteria available to the applicant. If the applicant was rejected and the landlord failed to make the criteria available, the application fee and any application deposit must be returned.

The Texas REALTORS® has developed a model tenant-selection criteria form and the Residential Lease Application (TXR 2003) for members’ use.


The tenant of a property I manage told me someone shattered a window while trying to break into his unit. He then sent me written notice of the broken window and is arguing that the landlord is obligated to pay for the repair because the damage was the result of a criminal act by a third party. I say the tenant has to pay for the repair. Which of us is right?

The answer depends on your lease. If you used Texas REALTORS® Residential Lease, then you are correct that the tenant must pay for the repair. Under Paragraph 18D(2) of the Texas REALTORS® Residential Lease, a landlord does not have to pay to repair damage to windows and screens unless the damage is caused by the landlord’s negligence. Therefore, the tenant is responsible for the cost of repairing the window, regardless of how the damage was caused (e.g., a break-in, an accident, or a tenant who deliberately broke the window because he or she was locked out). 

However, if you didn’t use the Texas REALTORS® lease or if your written lease doesn’t address this situation in the manner required by the Property Code, the broken window could be deemed a condition that materially affects the physical health and safety of an ordinary tenant and the landlord could be required to make a diligent effort to repair the window and ultimately be responsible for payment. 

I manage rental properties for a client who doesn’t want people smoking on his property. If we deny potential tenants’ applications because they smoke, will this violate any federal fair-housing laws?

No. Federal fair-housing laws make it illegal for the landlord to choose tenants based on their race, color, sex, national origin, religion, handicap, and familial status. However, people who smoke are not a protected class. A landlord can refuse to lease to potential tenants who smoke as long as the landlord consistently enforces such prohibition.

I visited one of the properties I manage because the tenants are behind in their rent. They had moved out and took their possessions but left a considerable amount of damage, plus a lot of trash. They also left a note with their new address for the owner to return their deposit. Can the property owner keep their security deposit to cover the cost of repairs and clean up?

No, he cannot automatically keep the security deposit. However, he may be entitled to some or all of it, since it’s a fund to offset damages that an owner may incur because of a tenant’s default under a lease.

The Texas REALTORS® Residential Lease (TAR 2001) lists the deductions that the owner can make from the security deposit because of a tenant's breach of contract of the lease. In your case, it's likely the delinquent rent and other damages you describe will exceed the amount of the security deposit and the owner will be allowed to retain all of it.

Since the tenants left a written statement of their forwarding address, you or the owner are required to give the tenants a written description and itemized list of the deductions from the security deposit within 30 days after the tenants surrendered possession of the property.

The tenants in a property I manage are a couple whose names are both on the lease. This week, they each told me that they are divorcing and gave me the required written notice to terminate their lease when it expires next month. They also both asked for the security deposit to be refunded directly to them. Who should I make the check out to if both of their names are on the lease?

Paragraph 10C of the TAR Residential Lease (TAR 2001) provides that any refund of the security deposit will be made payable to all tenants named in the lease. Since both tenants are named as parties to the lease, make the check payable to both of them.

A tenant for a property I manage entered into a lease with the landlord and paid a security deposit and first month’s rent. The day before the date the lease period began, the tenant notified me that he had changed his mind and no longer wanted to rent the property. The tenant asked me to send the security deposit and first month’s rent to his new address, but the landlord wants to keep the funds. Can the landlord do this?

Maybe. The landlord has an obligation to secure a satisfactory replacement tenant. A tenant may also attempt to locate a replacement tenant. If a satisfactory replacement tenant who can move in by the lease’s commencement date is not found, the landlord may hold the tenant in default and exercise the remedies in Paragraph 27 of the Residential Lease. This may allow the landlord to keep the security deposit and first month’s rent.

On the other hand, if the landlord does find a satisfactory replacement tenant who can move in by the commencement date, the landlord may only deduct from the security deposit and the first month’s rent either a sum agreed to in the lease as a cancellation fee or actual expenses incurred by the landlord in securing the replacement tenant.

After the sale of a home occupied by a renter, it was discovered that the security deposit was not transferred from the seller to the buyer as part of the closing. Now the parties can't agree on who is responsible for the security deposit when the rental ends. Who is responsible for the security deposit?

Both buyer and seller could be responsible. Under the provisions of Section 92.105 of the Texas Property Code, the seller and the buyer may be liable for the security deposit and any refund of the deposit to the tenant upon termination of the rental. The new owner is liable for the return of the security deposit from the date he acquires the property. However, the seller also remains liable for the security deposit he received from the tenant until the buyer delivers to the tenant a signed statement acknowledging that the buyer is the new owner and has received and is now responsible for the tenant's security deposit. The transfer of the security deposit upon closing is now specifically addressed in the TREC One to Four Family Residential Contract. Paragraph 9(B)(5) now expressly states: “If the Property is subject to a lease, Seller shall (i) deliver to Buyer the lease(s) and the move-in condition form signed by the tenant, if any, and (ii) transfer security deposits (as defined under §92.102, Property Code), if any, to Buyer. In such an event, Buyer shall deliver to the tenant a signed statement acknowledging that the Buyer has received the security deposit and is responsible for the return of the security deposit, and specifying the exact dollar amount of the security deposit.” Texas REALTORS® form 2210, Notice to Tenant of Change in Management and Accountability for Security Deposit, could also be used for this purpose with a few obvious changes. Note: Section 92.105 of the Texas Property Code does not apply to a real estate mortgage lienholder who acquires title by foreclosure.

I am the property manager for a property with three tenants. At the end of the lease term, one of the tenants decided to live alone and moved out. The two other tenants decided to sign a new lease and remain at the current rental property. The tenant that moved now wants her portion of the security deposit back. Because the lease requires that any refund of the security deposit be made payable to all tenants named in the lease, I am unsure how to handle the return or accounting of the security deposit for this tenant when two of the tenants are not leaving.

None of the tenants’ security deposit is due for refund or an accounting until 30 days after the remaining two tenants surrender the property. Generally, a landlord has a duty to refund and/or provide a written description and itemized list of all deductions on or before the 30th day after the day the tenant surrenders the rental property. “Surrender” is defined in paragraph 16 of the Residential Lease (TXR 2001) as “when all occupants have vacated the Property, in Landlord’s reasonable judgment, and one of the following events occurs: (a) the date Tenant specifies as the move-out or termination date in a written notice to Landlord has passed; or (b) Tenant returns keys and access devices that Landlord provided to Tenant under this lease.”

In a situation where there are multiple tenants in a rental property, “surrender” does not occur until the last occupant moves out. Even if one tenant has moved out of the property, returned the keys, given proper notice of termination, provided a written forwarding address and is not delinquent in rent, if the remaining tenants extend or sign a new lease with the landlord, the tenant would not yet be entitled to the security deposit because not all tenants have surrendered.

The remaining tenants may settle the splitting of the security deposit amongst themselves with the tenant who is vacating. This way the vacating tenant does not have to wait to see any refund or accounting of the security deposit and the property manager or landlord does not have to attempt to return a portion of the security deposit to the vacating tenant, especially when the landlord or property manager may not know what deductions may need to be taken out of the security deposit yet and because, under the lease, the tenants are jointly and severally liable for all provisions in the lease.

I manage a property for a husband and wife who both signed a Residential Leasing and Property Management Agreement (TAR 2201). After the tenant vacated, the wife called to inform me of her split from her husband and asked me to forward the tenant’s security deposit to her, so she could make improvements to the property. She planned to live there until matters were settled with her husband. The husband also called. He asked that I return the security deposit to the tenant, less any deductions for damages beyond normal wear and tear. I took deductions from the security deposit and the sent the balance, along with a written description and itemized list of deductions, to the tenant. Will I be liable to the wife since I’ve already refunded the remainder of the security deposit to the tenant? Will I be liable to the tenant if the tenant disputes the deductions I’ve taken?

No. The wife is not automatically entitled to the security deposit. If the tenant has caused damage to the property beyond normal wear and tear, both the wife and the husband are entitled to the funds, not just the wife. Furthermore, the Residential Leasing and Property Management Agreement (TAR 2201) authorizes you, as the property manager, to account for the security deposits you hold in a trust account and take any deductions from the deposits in accordance with the lease and the Property Code. Hence, you will not be liable unless you’ve failed to account for the security deposit. Also, you will not be liable to the tenant if the tenant disputes the deductions you’ve taken, because the agreement indemnifies you from any claim or loss from a tenant for the return of the security deposit.

I was managing a property, and the owner terminated the management agreement effective today. A tenant in the property previously notified us that he will not renew the lease. The lease ends 30 days from today. I have the security deposit in my trust account. What do I do with the security deposit?

The security deposit is a deposit given by the tenant to the landlord as security for the tenant's performance under the lease. The landlord must account to the tenant for the deposit at the end of the lease. Under most property-management agreements, the property manager holds the security deposit during the lease term on behalf of the landlord and accounts to the tenant for the landlord at the end of the lease term. Since you are no longer the landlord's agent, you should forward the security deposit to the landlord and remind him he has a duty to account for the deposit when the tenant vacates the property. You should send written notice to the tenant advising him that you are no longer the agent for the landlord, that you tendered the security deposit to the landlord, and that the landlord is responsible to account to the tenant for the security deposit. Alternatively, you and the landlord may agree that you will continue to hold the money and account for the security deposit, but such an arrangement should be stated in writing and be specific as to the parties' responsibilities, such as who will inspect the property for damage upon move-out and who will make determinations about any deductions.

What if some, but not all of the tenants renting a particular property move out? Am I still required to rekey?

No. Remember, “tenant turnover date" is defined as the date a tenant moves into a dwelling under a lease after all previous occupants have moved out. In this scenario, not all previous occupants have moved out of the property.

Do I have to wait to rekey the security devices operated by key, card, or combination until after the tenant has moved in?

No. The Texas Property Code § 92.156 requires that the security devices operated by a key, card, or combination be rekeyed by the landlord at the landlord’s expense not later than the 7th day after each tenant turnover date. “Tenant turnover date” is defined as "the date a tenant moves into a dwelling under a lease after all previous occupants have moved out.” Because the language of the statute requires the rekey to happen not later than the 7th day after the tenant turnover date, you could rekey before or after the new tenant move-in. Whether you rekey before or after tenant move-in is up to you, you just have to make sure the rekey happens no later than 7 days after the tenant turnover date.

I listed a house for lease where the owner just vacated that house and moved to a new home. The owner thinks he doesn't have to rekey the locks because he's been the only occupant of that house since it was built. Is the landlord required to rekey the locks when he leases the property?

Yes. The Texas Property Code § 92.156 requires that a landlord rekey the locks no later than the seventh day after each tenant turnover date. “Tenant turnover date" is defined as the date a tenant moves into a dwelling under a lease after all previous occupants have moved out. The definition applies even if the previous occupants were the original owners of the dwelling. This means that your client, as the last occupant of the property, would have to rekey the locks no later than the seventh day after a new tenant moves into the home.

May a landlord’s duty to install smoke alarms be waived?

No. House Bill 1168, which became effective on September 1, 2011, requires a landlord to install smoke alarms: (1) in each bedroom; (2) in each hallway that services multiple bedrooms; AND (3) on each level of the dwelling unit. A landlord of a property first occupied before September 1, 2011, has until January 1, 2013, to comply these new requirements. Per the Property Code, the duty to install smoke alarms may not be waived. Two ways that a landlord may alternatively comply with requirements relating to smoke alarms are to have a fire detection device that includes a fire alarm device as defined by Section 6002.002 of the Insurance Code or to install smoke detectors in compliance with Chapter 766 of the Health and Safety Code. If a landlord is not in compliance with the law on smoke alarms, a tenant may seek remedies such as a judgment for damages related to the violation and court costs.

My client accepted an offer on his property from buyers who asked to move in 30 days before closing. My client agreed, and they used the Buyer’s Temporary Residential Lease as part of the contract. Will my client have to re-key the exterior doors before the buyers move in since he will be acting as their landlord for that period?

No. Paragraph 22 of the Buyer’s Temporary Residential Lease explains that the requirements of Section 92.152 of the Texas Property Code relating to security devices, including re-keying of exterior doors, do not apply to a residential lease for a term of 90 days or less.

Who does the IRS consider to be a “foreign person”?

A “foreign person” includes nonresident alien individuals and foreign entities. U.S. citizens, persons with green cards, or persons who meet the substantial presence test for the calendar year are not foreign persons. To meet the substantial presence test, a person must be physically present in the United States on at least: (1) 31 days during the calendar year, and … (2) 183 days during the current year and preceding 2 years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year.

Can I serve as a property manager for rental property owned by a non-U.S. citizen?

Yes. A Texas licensee can manage properties in Texas whether the owner is a U.S. citizen or not. Property managers, however, should be aware of IRS requirements concerning the rental income of foreign persons. Unless a foreign person has identified the rental income on IRS Form W-8ECI (which requires a valid U.S. tax identification number for the foreign landlord) and provided a copy of the form to the property manager, the property manager should withhold thirty percent (30%) of collected rental payments. Withholdings, if any, must then be timely remitted to the IRS. A property manager that fails to do this may face personally liability for the tax amounts that should have been paid, plus interest, penalties, and where applicable, criminal sanctions. Property managers also have an obligation each year to report annual rents collected on behalf of foreign persons on IRS Forms 1042 and 1042-S.

Can a non-U.S. citizen own rental property in Texas?

Yes. There is no requirement that a person be a U.S. citizen to own rental property in Texas.

When must withholdings be deposited with the government?

If total withholdings are $2,000 or more on the 7th, 15th, 22nd, or last day of the month, then you must deposit the taxes within 3 business days. If total withholdings are $200 or more, but less than $2,000, at the end of any month, then you must deposit the taxes within 15 days. If total withholdings are less than $200 at the end of a calendar year, then you must either: (1) pay the taxes with your Form 1042, or … (2) deposit the entire amount by March 15 of the following calendar year. Be aware that all withheld taxes must be deposited by electronic funds transfers. Typically, the transfers are made using the Electronic Federal Tax Payment System (EFTPS). https://www.eftps.gov/eftps/

Are property management companies subject to the EPA's lead renovation, repair, and painting rule?

Yes. The Environmental Protection Agency’s 2008 Lead-Based Paint Renovation, Repair, and Painting (RRP) Rule requires specific training and certification when performing certain work with pre-1978 housing or child-occupied facilities. The rule originally exempted property management companies who were not performing the renovation, repair, or painting work. However, that changed in March 2022.

According to the EPA, property management companies that perform, offer, or claim to perform regulated renovations in pre-1978 housing or child-occupied facilities are required to obtain certification from the EPA and ensure that renovations in the homes they manage are performed by certified firms and employees trained to use lead-safe work practices. The EPA will now hold both the property management company and the contractors they hire liable for compliance if the circumstances indicate that both entities performed or offered to perform renovations under the RRP rule.

Penalties for a failure to maintain required documents can reach $40,576 per violation, per day and “knowing violations” can result in criminal penalties of up to $50,000 per violation per day, or imprisonment for not more than one year, or both, in addition to or in lieu of civil penalties.

The EPA has broadened its interpretation of “offering to perform” and “claiming to perform” to include actions such as:

  • Soliciting and evaluating contractor bids
  • Applying for permits, as appropriate
  • Granting contractors access to the property
  • Overseeing contractor work on the property
  • Informing tenants of renovation activity
  • Verifying completion of renovation activity
  • Remitting payment to the contractors.

Visit the EPA's website for information on how to get certified.

When must the Addendum Regarding Rental Flood Disclosure be provided?

The Addendum Regarding Rental Flood Disclosure applies to landlords, who are required to provide the addendum to a tenant at or before the execution of the lease.

Can I fill out and sign the Addendum Regarding Rental Flood Disclosure on behalf of the landlord?

Agents and brokers should not help landlords fill out the addendum because doing so can increase their liability. Also, brokers and agents have a duty to disclose material facts they know about the property but are not required to do additional research for the purpose of making disclosures on properties they represent.

Is the Addendum Regarding Rental Flood Disclosure required if the property is not in a 100-year floodplain and has never flooded?

Yes. Landlords can indicate in the addendum that they are not aware that a dwelling is located in a 100-year floodplain or that they are not aware that the dwelling has flooded at least once within the last five years. However, a landlord is not required to disclose on the addendum that the landlord is aware that a dwelling is located in a 100-year floodplain if the elevation of the dwelling is raised above the 100-year floodplain flood levels in accordance with federal regulations.

Do I have to provide the Addendum Regarding Rental Flood Disclosure when extending a lease or when a lease automatically renews to a month-to-month?

No. The addendum is required to be given on or before the execution of the lease. The lease extension form is an amendment to the lease, and the renewal is automatic, meaning there are no later executions of a lease in either instance. However, if there is an existing lease that renews or is extended after the effective date of the notice requirement (January 01, 2022), the landlord should provide the Addendum Regarding Rental Flood Disclosure at that time, since that would be the first time it would be given.

If a new lease is signed between the same landlord and tenants and the Addendum Regarding Rental Flood Disclosure was provided with a previous lease, does the landlord need to provide another addendum if nothing has changed?

Yes. Because a new lease is being executed, the addendum should be provided irrespective of whether the previous information has changed.

What does “100-year floodplain” in Section A of the Addendum Regarding Rental Flood Disclosure mean?

The term “100-year floodplain” is defined as any area of land designated as a flood hazard area with a 1% or greater chance of flooding each year by the Federal Emergency Management Agency (FEMA) under the National Flood Insurance Act of 1968. FEMA maintains a flood map on its website that is searchable by address, where a landlord can determine if a dwelling is located in a flood hazard area.

What does “flooding” in Section B of the Addendum Regarding Rental Flood Disclosure mean?

Flooding is defined as general or temporary condition of partial or complete inundation of a dwelling caused by any of the following:

  • The overflow of inland or tidal waters
  • The unusual and rapid accumulation of runoff or surface waters from any established water source such as a river, stream, or drainage ditch
  • Excessive rainfall.

What happens if the landlord fails to provide the Addendum Regarding Rental Flood Disclosure and the dwelling floods?

Section 92.0135 of the Texas Property Code states that if the landlord fails to provide the required notice and a tenant suffers a substantial loss or damage to their personal property, then the tenant may terminate the lease by giving a written notice of termination to the landlord no later than 30 days after the date the loss or damage occurred. Substantial loss means that the cost of repairing or replacing the personal property equals 50% or more of the personal property’s market value when the flooding occurred. However, the termination would not affect a tenant’s liability for delinquent, unpaid rent or other sums owed to the landlord before the date the lease was terminated by the tenant.

Is a tenant required to renew any documentation that was provided with a reasonable accommodation request for an assistance animal?

There is no obligation on the tenant to renew the reasonable accommodation documentation. If the tenant’s disability is not readily observable or the documentation does not include information about a chronic disability-related need for the assistance animal, a landlord may contact the healthcare provider that provided the documentation after 12 months to assess whether the healthcare provider still advises the need for the assistance animal. However, if a landlord were to implement a practice of re-assessing reasonable accommodation requests, the landlord should include information about the re-assessment in the landlord’s written criteria or policies to apply to future requests. A landlord should not re-assess any accommodations the landlord has already granted prior to implementing such a policy.

The tenant for a property I manage has asked the landlord to replace the carpet in one room because she says it looks worn and needs repair. Does the landlord have to fulfill this request?

No. Neither the Texas Property Code nor the Texas REALTORS® Residential Lease would require a landlord to replace or repair something like this.

While Paragraph 18D(1) of the TAR Residential Lease states that the “landlord will pay to repair or remedy conditions in the property in need of repair if the tenant complies with the procedures for requesting repairs,” this does not mean that the landlord has the obligation to make every requested repair. Paragraph 18D(2) of the TAR Residential Lease states that a landlord will not pay to repair “items that are cosmetic in nature with no impact on the functionality or use of the item,” and a landlord could argue that worn carpet falls under this category. Additionally, Paragraph 18C(1) the TAR Residential Lease states that all decisions regarding repair will be at the landlord’s sole discretion.

A tenant notified me yesterday that his water heater stopped working. A repairman came to the property today, but the water heater requires a part that won’t arrive until tomorrow. The tenant is upset and wants the landlord to pay for a hotel room for tonight. Is the landlord obligated to do this?

No. Nothing in the Texas Property Code or TAR Residential Lease (TAR 2001) requires the landlord to put the tenant in a hotel while repairs are being made. A landlord isn’t obligated to provide alternative housing for a tenant based on a needed repair, even if that repair relates to a condition that could be construed as materially affecting the physical health and safety of the ordinary tenant.

If the landlord fails to make a diligent effort to remedy a condition that materially affects the physical health and safety of an ordinary tenant, the tenant’s remedies are found in Section 92.056 of the Texas Property Code.