Landlord tenant law in brief

• Landlord tenant law in Texas regulates the property lease or rent arrangements between landlords and tenants, establishing the rights and responsibilities of each party.
• These laws and regulations are set forth in the Texas Property Code and include directions on such items as tenant rights, landlord disclosures, lease agreements, evictions, security deposits, and landlord responsibilities.
• These laws relate to residential, industrial, and commercial leases, which are any written or oral agreements between a landlord and tenant that establish or modify the terms, conditions, rules, or other provisions regarding the use and occupancy of a dwelling, property, or land.
• Leases can be complex with a variety of details, often resulting in disputes between landlords and tenants that require skillful negotiation or litigation if that fails.
• The best way to avoid disputes is to have a properly crafted lease agreement by a lawyer well versed in Texas real estate law.

The following information is provided by Michael Ballases, a Texas attorney and expert in real estate law, awarded best lawyer designation in 2023 and 2024.

Principles of landlord tenant law in Texas

A property lease is a written or verbal contract between the owner of a property (lessor) and an individual or company (lessee) that grants the lessee the right to use that property, such as a building, house, or land, for a designated purpose. The lessor retains all ownership of the property. The period of use is generally designated as a specific length of time in exchange for consideration of a sum of money paid at designated times.

Property leases are either residential or commercial, with each type governed by specific laws. For example, a residential lease grants the tenant privacy rights while a commercial lease does not.

A residential lease allows someone to live in real estate property of either a house or an apartment owned by someone else for consideration usually of rent payments. A commercial lease is for the use of property by a lessee for a business purpose. Either type of lease should be written to avoid misunderstandings that often occur in oral lease agreements.

What is a leasehold?

The terms “lease” and “leasehold” are sometimes used interchangeably, but they are different. A leasehold is a kind of property interest. A lease is an agreement between a landlord and a tenant creating both a contractual interest and a property interest; the property interest is called a leasehold. A leasehold interest refers to the lessor’s (landlord’s) or lessee’s (tenant’s) interest stipulated in the lease contract.

When someone rents a home, they’ve entered into a leasehold estate, which establishes the right of a tenant to occupy a property, usually for a specific period of time, or term. There are four types of lease terms:

1. The most common lease period is a lease for years, in which the end date of the lease is specified at the beginning. A lease agreement may deem a lease for years as renewable at the end date.
2. A periodic lease does not specify an end date. However, advance notice of termination is required by either the lessor or lessee.
3. A tenancy at will permits a tenant to occupy the leased property without an agreement with the landlord. Either the landlord or the tenant can terminate the agreement at any time.
4. A tenancy at sufferance exists when a tenant occupies a property without the owner’s permission. This kind of term is usually created by a tenant remaining in possession of the property at the end of a lease until the landlord asks the tenant to vacate.

In all cases, while a leasehold estate grants a tenant interest in the property, it does not transfer whole ownership to them. Following is information on commercial leases, residential leases, and legal concepts that apply to them.

Texas commercial and industrial lease laws

Commercial and industrial leases are used for property leased to an individual or company to be used for business or industrial purposes. This includes everything from land leased for agricultural use to manufacturing and fabrication facilities to single-owner coffee shops.

There are many important legal differences in commercial/industrial and residential leases. Major differences are:

• Commercial/industrial leases are not subject to consumer protection laws required for residential leases, such as rights of habitability.
• They treat “fixtures” differently. A fixture is an item of personal property that becomes attached to the property in such a way that it becomes part of the property. An example of a fixture in a commercial property is when a baker builds multiple ovens in a commercially leased space; the baker can remove these “trade fixtures” at the end of the lease, whereas a tenant who adds new kitchen cabinets to a leased residential property typically cannot. (In residential leases, the definition of a fixture depends on factors such as the method of attachment, the tenant’s intention of attachment, and whether the fixture has been specially modified to fit into the leased space.)
• Commercial leases, which are a specific type of legal contract, are generally much harder to break than residential leases.
• Commercial leases generally involve longer and more detailed negotiations because they are customized to meet specific needs of the landlord and the tenant, which can vary widely depending on the type of business.
• Due to the complexity and large sums of money at stake in many commercial leases, they are more likely to be handled by a real estate lawyer than a single residential lease.

Commercial and industrial lease agreements

For commercial and industrial leases to be legally binding, they must meet the three elements of a contract: offer, acceptance, and consideration.

A lease agreement begins with an offer with clearly defined terms by either the potential lessor or lessee. The next step is acceptance of the offer by the tenant or landlord, which generally involves extensive negotiation to reach clearly defined terms both parties agree on. Acceptance is defined as mutual consent by both parties to the agreement and its various specifics such as period of time.

Lastly, the legal definition of consideration is a promise, performance of a certain act, or forbearance of a certain act (i.e., not doing something). Consideration is an exchange in which both sides must give up something.

For commercial/industrial leases, consideration is almost always a promise of the lessee to pay the lessor. The landlord (lessor) gives up use of property in exchange for the tenant giving up rent.

Other items involved in lease negotiation agreements include:

• Utilities and tax payments.
• Maintenance and repair responsibilities.
• Renewal rights and stipulations.
• The ability to sublet.
• Restrictions on the type of business and certain activities.
• Allowed signage.
• Access to common areas.

Texas law, as well as a legal doctrine known as the statute of frauds, requires that commercial leases of one year duration or more must be in writing to be enforceable. Most attorneys advise that all commercial leases be in writing and signed by both parties. Many circumstances are involved in reaching a commercial lease agreement, with three important ones below.

Security deposits

Security deposits are not part of consideration like rent and are subject to specific laws and requirements depending on various factors. A landlord cannot deduct from a tenant’s security deposit for wear and tear on the property but can charge for damages to the property, which requires and itemized list of the cost to repair the damage. A landlord must refund a security deposit within 60 days of the tenant’s move out date.

Tenant lockout

Any delinquency on rent by the tenant results in the landlord’s right to change the locks on the commercial property to prevent further use by the tenant. The landlord must post a notice on the front door indicating where the tenant can get the new key after payment of delinquent rent or remedy of the use violation. Lockouts can also occur if the tenant has abandoned the property and also for construction, repairs, or in emergencies.

Commercial lease disputes

The many variables in commercial leases increase the chances of disputes between landlords and tenants. Reasons for disputes can come from the landlord or the tenant. As with creating the lease agreement, obtaining a real estate lawyer with expertise in Texas landlord tenant law is very important in addressing disputes. The better the lease agreement, the less chance there is for disputes to affect tenant business income and landlord revenue.

Disputes can arise for various reasons such as:

• When a tenant or landlord fails to live up to the terms of the commercial lease, including stipulated payments and acceptable use provisions.
• When the tenant’s actions harm other tenants in the leased commercial property.
• Tenant’s abandonment of the property before the term of the lease is up.
• Violation of common area use or parking stipulations.
• Landlord misrepresentation of the leased property.
• Improper functioning of utilities and building systems such as plumbing, heating, and air conditioning.

The best solution to the above is professional negotiations. This can sometimes mean redrafting the commercial lease agreement. Litigation (lawsuit) could be the next step. A commercial lease attorney can also initiate injunctions to stop offending practices by either party.

Depending on the circumstances, a lease can be legally voided. An attorney can also pursue punitive damages and reimbursement of attorney’s fees.

Texas residential lease landlord tenant laws

Texas Property Code defines a lease as, “any written or oral agreement between a landlord and tenant that establishes or modifies the terms, conditions, rules, or other provisions regarding the use and occupancy of a dwelling.” As a contract between a landlord and a tenant, both parties have rights of negotiation before completing it, as well as the right to renegotiate it before the term of the lease is up, if both parties agree. The landlord is required to give the tenant a copy of the lease.

Residential lease agreement

Typical residential lease agreements include the term, or duration, of the lease, the amount of rent payments and how they are to be paid, property description, and specifics on the security deposit and how it can be used. Other inclusions can address landlord responsibilities and any renter’s insurance required of the tenant.

A strong residential lease will address situations of default by the landlord for failure to comply with the lease. Lack of adequate repairs that render the property unsafe for the tenant can trigger this. Similarly, the tenant can be in default by failing to live up to the terms, including rent payments and use provisions such as non-allowance of pets. Additional factors can be included such as tenant screening for credit and criminal background.

Tenant rights Texas

The Texas attorney general’s office notes that tenants have rights to peace and quiet, health and safety, and security devices like locks and window latches. Tenants have the right to have a dwelling that is safe for human habitation, which is an obligation of all landlords in Texas (and all states). This is known as implied warrant of habitability. Such conditions require remedy by the landlord under certain criteria.

Tenants have the right to withhold rent by deducting valid repair costs they bear from rent, or to terminate the lease, or to sue the landlord if such repairs are not made in a reasonable time after notification to the landlord. Tenants also have the right to be protected against landlord retaliation when tenants stand up for their rights.

Landlord disclosure requirements

Texas law requires that landlords disclose certain information to tenants in a lease or rental agreement. Some of these deal with return of security deposits, installation of safety devices in the residence, and tenants’ rights when a landlord fails to make repairs to problems affecting the safety and health of the tenant. Other landlord disclosure requirements include, screening criteria used, electrical service disruption notice, a domestic violence victim’s rights to break a lease, floodplain notification, the identity of the owner or agent, and emergency contact information.

Texas Fair Housing Act

Texas’ Fair Housing Act is similar to the federal Fair Housing Act. Both require landlords to follow prescribed antidiscrimination laws in screening potential tenants. Landlords cannot discriminate against tenants on the basis of religion, national origin, race, family status, age, disability, and sex, sexual orientation, or gender identity.

Tenants can access more on fair housing at the Texas Department of Housing and Community Affairs website.

Eviction laws

Texas landlords can evict a tenant only by following a specific process. First the lease can be terminated for the tenant’s failure to pay rent on time or live up to the lease provisions. Leases can also be terminated without cause, though this is mostly done at the end of month-to-month lease terms.

A lessor is not required to grant a lessee the option of paying back rent or remedying the use infraction, but a landlord can offer this option so that the tenant may remain in the property. After lease termination, the tenant has three days to vacate the property.

After three days, the landlord can file an eviction lawsuit and serve the tenant with a summons to the court proceedings. Should the tenant lose the lawsuit, the landlord then presents the court’s judgment to local law enforcement officials. They will give the tenant notice that officers will return to remove the tenant at a certain date if the tenant has not left the property voluntarily.

About T. Michael Ballases, Texas trial attorney

Anyone entering a construction contract can benefit understanding the difference between direct liability and vicarious liability. Let a legal expert help. With more than two decades of legal experience, T. Michael Ballases has a 90% courtroom win rate and a practical, common sense approach. His philosophy is simple: Determine what the client seeks and focus on attaining it by utilizing a big-picture methodology and avoiding meaningless clutter.

Learn more about Michael Ballases.

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