Texas Lease Agreements Explained
Before trying to break a lease, it is important to understand the lease agreement itself, and what it means for you. A Texas lease agreement, or residential real property lease, is governed by local statutory and common law principles. These agreements spell out the conditions of the lease, including the parties to the lease, the location and terms of the lease, obligations regarding utilities, rent payment, maintenance obligations, and the handling and payment of damages. Tenants must adhere to all terms and conditions of these agreements. Otherwise, they could be in breach of the lease and be subject to eviction.
In Texas, landlords may be required to mitigate the damage resulting from an alleged breach of a lease . The landlord may not simply hold a tenant to the lease for the entire duration of the lease term and continue to collect rent without making reasonable efforts to find a new tenant. To place the burden upon the tenant, a landlord may want a tenant to sign a lease where the tenant agrees to waive mitigation in return for either (1) reduction of the lease period; or (2) other consideration such as an abatement of rent or reduction of deposits. The validity of these clauses is in dispute under Texas law and has not been adjudicated by the Texas Supreme Court. Certain exceptions to the mitigation of damages rule appear to exist by virtue of statutes. Because mitigation of damages was not recognized at common law, the absence of a statute concerning mitigation would not negate the common-law duty of a party to minimize its losses.
Legal Reasons for Breaking a Lease
Although Texas law requires both landlord and tenant to uphold their end of the lease agreement, there are a number of legally accepted reasons for breaking a lease early. For example, leases that include active military duty, uninhabitable living conditions, or landlord harassment can be broken by tenants without incurring any legal penalties.
The Servicemembers Civil Relief Act allows military personnel to break leases without penalty in Texas. Tenants need break the lease either: 1. while on military duty; 2. within 90 days of entering military duty; or 3. while under permanent change of station (PCS) orders in a new location. Active military duty includes service in the U.S. Air Force, Army, Navy, Coast Guard, Marine Corps, or even the commissioned corps of the Public Health Service and the National Oceanic and Atmospheric Administration.
Tenants can also legally break a lease if the living conditions are uninhabitable. If any of the specific issues listed below are present, a landlord could be found to be in violation of the "implied warranty of habitability":
• No running water
• No working toilet
• Water heater does not provide hot water
• No electricity or malfunctioning electrical equipment
• No heat
• Broken windows
• Broken locks
• Broken smoke detectors
• Infestation, such as rats, mice, or insects
• Dangerous mold
• Broken stair steps or handrails
• No garbage removal
• No locks on entrance to dwelling
• Building is unsafe, in disrepair, or unsanitary
• Landlord denies important services, such as stairwell lights
• Landlord fails or refuses to obey building, housing or health codes
Texas law prohibits landlords from harassing tenants and interfering with their right to live in an apartment as laid out in the lease agreement. If a tenant can show that a landlord has engaged in either of these prohibited behaviors, then that tenant might have a valid reason to break the lease early without penalty.
Early Termination Clause
The Early Termination Clause is an optional clause that every Texas lease should contain. It provides flexibility for all parties if a situation arises that may require an early termination of the lease, such as the service member moving because of a Permanent Change of Station (PCS) or Super Bowl tickets suddenly becoming available to that primo game accused of being rigged.
Texas landlords are required to provide each tenant a copy of the Texas Property Code pertaining to residential leases. One of the many provisions is in Section 92.016, and titled "Early Termination of Certain Lease Agreements." Specifically, this section applies only to leased premises for less than 90 days, including temporary rentals of certain furnished apartments, motels, hotels, and guest houses. Therefore, Section 92.016 does not apply to a residential lease where the leased premises will be available to the tenant for longer than 90 days.
There are six requirements of this "early termination clause." Through these requirements, the "early termination clause" allows a tenant to terminate the lease early by giving the landlord a 30-day notice in writing and the payment of an early termination fee no greater than the lesser of:
(1) $300; or
(2) an amount equal to one month’s rent under the lease.
Giving Proper Notice
If you have decided to break the lease early and move out of your rental property, it is advisable to provide proper notice to do so. Notice is a common requirement and allows your landlord to plan ahead for the return of the property into his or her hands.
If you signed a written lease, it likely has a provision addressing how and when proper notice must be given. An express term in a written contract usually controls over any provisions not in the written contract.
If you did not sign a written lease but rather signed a lease application or renewal that contains terms on the subject of notice, it is likely those terms will apply.
Concerning a periodic tenancy (also known as a tenancy at will), the Texas Property Code requires tenants give landlords either:
Think of the 30-day notice requirement as a grace period for landlords and do everything in your power to provide the notice. It will be much easier when you get that request for a repair and you are already out of the property, provided 30 days have passed from the time you gave proper notice. There is also no telling what other life-issues will come up in a month to complicate your move in a way that would require notice.
Negotiating with the Landlord
In some circumstances, a tenant may be able to work with his or her landlord directly to negotiate an agreement that allows the tenant to break a lease legally. In these cases, the respective parties should enter into a written lease termination agreement that releases the tenant from his or her leasehold obligations. The agreement should specifically and unambiguously state that the agreement is a mutual termination of the lease and should not refer to a surrender or abandonment. Neither a conditional nor an unconditional surrender in a lease, even if accepted by the landlord, will be treated as a termination of the lease by law. If the lease is not terminated by the lease termination agreement, the agreement itself as a matter of law will not effectuate a termination of the lease as required by the Texas Property Code. Texas Property Code likely will prohibit a court from granting specific performance of an agreement to terminate a lease without a consideration of the burdens of the lease . A negotiating tenant should bear this in mind when executing a lease termination agreement, as a court may not be able to force the landlord to permit a tenant to break the lease and incur liability for the remaining rents. It is, therefore, always preferable to have a fully executed lease termination agreement so that the tenant’s estate is properly terminated. Additionally, if the parties do not formally terminate the lease, the landlord will hold certain rights with respect to the term of the estate that may allow the landlord to postpone termination for an extended period of time. From an economic perspective, it is important that tenants consider this possibility when negotiating a termination of a lease. For example, a landlord may sue for rent and actual damages to cover repair and restoration costs that may not exceed the amount of the unpaid rent at the end of the term of the lease. In order to avoid any potential liability in excess of the rent due under the lease, a terminated tenant should negotiate the payment of unpaid rent due under the lease, so long as the rent is supported by consideration (e.g., consideration exists when the tenant actually occupies the estate).
Possible Financial Ramifications
Beyond the likelihood of losing a security deposit, there are various financial risks a tenant will assume should he or she break a lease without a legally permissible just cause. A tenant breaking a lease on principal (or out of spite) by refusing to pay rent can be sued for all the rents that are owed for the remaining lease term. A tenant who moves out early legally owes the remainder of the rents for the term of the lease. The assumption is that the property owner can easily re-rent the property at the same rate and recapture the lost rent, so no harm, of course, is done to the owner if the owner is able to re-rent the property (and in most cases, is fully compensated).
However, when an owner sues a resident in justice court for all the rents under the term of the lease, there is a good chance that the issue will be transferred to the district court, where the owner has the right to sue for all damages. In district court, a property owner can not only sue for all the unpaid rent, but also for attorney’s fees, court costs, and possibly even additional statutory damages.
When a property owner sues for unpaid rent, the outcome of the case will likely become part of the tenant’s credit history. If the judgment is not satisfied by the tenant (meaning that the tenant does not pay the judgment timely), then the missed payment may be reported to credit bureaus as a delinquent payment, or worse, a debt in collections.
In criminal cases, conviction of a drug possession charge might not have any direct, collateral consequences for the convicted person. However, in a civil case, nonpayment of a judgment could lead to a criminal charge if the person then refuses to pay restitution on the judgment, because failure to satisfy a restitution obligation on a civil judgment is a class C misdemeanor (i.e., the person can be fined up to $500.00).
Thus, whether the suit is for destruction of rental property, for a breach of the lease, or simply for the payment of outstanding rents—not paying the judgment leads to negative consequences. Within the justice system, the consequences and primary focus for most cases in the justice courts, involves the civil handling of the dispute and the role of the justice system with respect to recovery of the outstanding debt.
There are other disputes in the context of these types of civil actions involving the landlord tenant relationship. But the primary focus of these cases involve collection of debts for rents. Ultimately, the amount of the judgment that is entered in a justice court case is the total amount of the outstanding financial obligation.
Consult Your Lawyer
A lawyer who is skilled and experienced in landlord and tenant relationships can provide invaluable assistance in the early stages of negotiation and throughout the process. Landlords are not always reasonable in their demands but a tenant who tries to negotiate on their own is always at a disadvantage. If the matter is volatile, your attorney will draft correspondence to your landlord and/or their agents in order to protect you and your rights throughout the process . If there is an existing lawsuit with court dates coming up shortly, early retention of counsel is even more critical. Your attorney will be able to put a counter-strike plan (which may include discovery and a request for jury trial) into action to protect your rights from the outset, while at the same time the lawyer is negotiating a settlement that works for you outside of the courtroom.