Friday, April 29, 2011


Do you have questions or concerns about your apartment's utilities? The Austin Tenants' Council provides good information regarding utilities.

A landlord may shut off any utility (electricity, water, wastewater, and gas) to carry out repairs or construction or in an emergency. A landlord may never shut off electricity, water, wastewater, or gas because the tenant is delinquent with a rent or utility payment. Any provision of a lease that purports to waive any of the tenant’s rights, liabilities, or duties under the utility shut-off law is void.
Note: The Texas Commission on Environmental Quality (TCEQ) believes that the Texas Property Code does not prohibit a landlord from shutting off water utilities if the landlord follows TCEQ rules. The Austin Tenants’ Council disagrees.
Tenant Remedies for Illegal Shut Off
If a landlord or a landlord’s agent violates any of the rules for shutting off electrical service, the tenant may:
  • Either recover possession of the premises or terminate the lease; and
  • Recover from the landlord actual damages; the greater of one month’s rent or $500; reasonable attorney’s fees; and court costs, less any delinquent rent or other sums for which the tenant is liable to the landlord.
Tenant’s Right of Restoration After Unlawful Utility Disconnect
If a landlord has interrupted utility service in violation of Section 92.008 of the Texas Property Code, the tenant may obtain relief after filing a sworn complaint specifying the facts of the landlord’s disconnection with the justice court in the precinct in which the rental premises are located. The tenant must also state orally under oath the facts of the unlawful utility disconnection during an appearance in court.
If the court believes that an unlawful utility disconnection has likely occurred, the court may issue an order that entitles the tenant to immediate and temporary restoration of utility service pending a final hearing.
If the Landlord Fails to Pay the Utility Company in an All Bills Paid Rental Unit
If a landlord fails to pay the utility company for utility services in an “all bills paid” unit, Section 92.301 of the Texas Property Code addresses a tenant’s remedies if the utilities are disconnected or notice is received from the utility company stating the utility service is about to be disconnected. The tenant’s remedies are as follows:
  1. Pay the utility company the amount owed to reconnect or avert the shutoff;
  2. Terminate the lease with a written notice within 30 days from the date the tenant has notice from the utility company of a future shutoff, or notice of an actual shutoff, whichever is sooner;
  3. Deduct the amount paid to the utility company to reconnect or avert the shutoff from the rent, without the necessity of judicial action;
  4. If the tenant terminates the lease, the tenant can deduct the security deposit from the rent, without judicial action, or obtain a refund of the deposit;
  5. If the tenant terminates the lease, the tenant can recover a pro-rated refund of any advance rental payments;
  6. Recover actual damages including, but not limited to, moving costs, utility connection fees, storage fees, and lost wages; and
  7. Recover court costs and attorney fees.
If the tenant deducts money from the rent after paying the utility bill, the tenant must provide a copy of a receipt from the utility company showing the amount paid to reconnect or avert the utility shutoff.
NOTE: The tenant loses the above-mentioned remedies if, before the tenant terminates the lease or files suit, the landlord provides the tenant with written evidence from the utility company that all delinquent sums have been paid.
Rules for Allocating Non-Submetered, Master-Metered Utility Bills
There has been a trend among landlords over the last couple of years of switching from “all bills paid” to master-metered bills, especially in large apartment complexes. This means that the landlord no longer pays for the utilities, but now makes the tenant pay the bill. The problem is that most apartments are not individually metered and the landlord does not usually want to spend the money to install meters for each rental unit. Because there are not individual meters to measure the tenant’s actual usage, the tenant may end up paying more than his share because of how the bill is allocated, or divided.
The Texas Public Utility Commission regulates how a landlord may allocate an electric bill; the Texas Commission on Environmental Quality (TCEQ) regulates how a landlord may allocate a water and wastewater bill; and the Texas Railroad Commission regulates how a landlord may allocate a gas bill. Gas allocation is very rare so it will not be discussed in this brochure.
Electricity — Applies to Rental Properties With Two or More Units
If a tenant lives in a rental unit where the electricity is master-metered, there are several rules the landlord needs to follow. First, the rental agreement must contain a clear written description of the method the landlord will use to allocate the bill and a statement of the average monthly bill for the previous calendar year for that rental unit. Second, a landlord may not charge the tenants more than the actual amount charged to the landlord. Third, the landlord must maintain adequate records that are available to the tenant for inspection during normal business hours. Finally, the electric bill must be separate from any other amounts due and the tenant shall have at least seven days in which to pay the bill.
Currently, the only approved method for allocating a master-metered electric bill, is to base it on the total square footage of the living area of the rental unit.
For example, if a tenant lives in an apartment complex that contains five 800-square-foot apartments and five 1,000-square-foot apartments, the final bill would be a percentage based on the total square footage of living space in the apartment complex. In this example, the total square footage is (5 x 800) + (5 x 1,000) = 9,000 square feet. A tenant who lives in an 800-square-foot apartment would pay 800/9000 or 8.88 percent of the total bill.
Water and Wastewater — Applies to Rental Properties With Five or More Units
If a tenant lives in an apartment complex with five or more units and the tenant is billed for the water or wastewater using an allocation method, the landlord must comply with the following rules. First and foremost, the landlord must disclose in the lease agreement:
  1. That the tenant will be billed for water on an allocated basis;
  2. That the tenant has a right to information from the landlord to verify the bill;
  3. The average monthly bill amount and the highest and lowest bill amount for all units in the past calendar year;
  4. The date bills are usually issued and the date bills are usually due; and
  5. A clear description of the allocation method used to calculate the bill.
A landlord has four options when it comes to allocating a water bill. Some of them are complicated so tenants are encouraged to contact either TCEQ or the Austin Tenants’ Council for additional clarification. A landlord must use one of the following methods for allocating a water bill:
1. Use the number of occupants in the tenant’s dwelling as a percentage of the total number of occupants in all apartments.
For example, in a complex of 50 tenants, an apartment with two occupants would pay 2/50 or 4 percent of the total bill.
2. Recognizing that apartments with two or more occupants do not typically use two or more times as much water as a single occupant, this method assigns a fractional portion for each occupant in excess of one. It must use a fractional portion of no less than that on the following scale:
  • Unit with one occupant = 1
  • Unit with two occupants = 1.6
  • Unit with three occupants = 2.2
  • Unit with more than three occupants = 2.2 + 0.4 for each additional occupant over three.
For example, in a complex of 50 tenants, an apartment with two occupants would pay 1.6/50 or 3.2 percent of the total bill.
3. So that landlords do not have to calculate the total number of tenants every month as in methods 1 and 2, the rules allow the landlord to use a fixed formula that estimates the number of occupants based on the number of bedrooms in each unit. The total number of occupants in the entire apartment complex is estimated using the same formula. The percentage a tenant pays is then determined by dividing the estimated (not actual) number of occupants in the tenant’s apartment by the estimated number of occupants in the entire complex:
  • Unit with an efficiency = 1
  • Unit with one bedroom = 1.6
  • Unit with two bedrooms = 2.8
  • Unit with three bedrooms = 4 + 1.2 for each additional bedroom over three.
For example, in a complex with five one-bedroom units and five two-bedroom units, the landlord would first estimate the total number of occupants as (5 x 1.6) + (5 x 2.8) = 22 occupants. A tenant living in a two-bedroom unit would then pay 2.8/22 or 12.7 percent of the total bill.
4. A landlord may also use a method combining the square footage and total occupancy in which no more than 50 percent is based on square footage. The square footage portion is based on the total square footage living area of the tenant’s unit as a percentage of the total square footage living area of all units of the apartment complex.
For example, suppose the square footage of a tenant’s apartment is 8.88 percent of the total and the total number of tenants living in the apartment is 3.2 percent of the total. The landlord could decide that 40 percent of the bill will be based on square footage and the other 60 percent is based on the number of occupants. The tenant would then pay (0.40 x 0.0888) + (0.60 x 0.032) = 5.47 percent of the total bill.
The information in this brochure is a summary of the subject and other pertinent matters. It should not be considered conclusive or a substitute for legal advice. Unique facts can render broad statements inapplicable. Anyone needing legal assistance should contact an attorney.

Thursday, April 21, 2011

Renting with a Broken Lease

View this article on the Austin Apartment Specialists Slideshare account

How apartments work with a broken lease is a source of confusion for a lot of renters in this position.  I want to start by stating that a broken lease IS NOT an eviction.  A broken lease could be anything from owing money to a property for damages, utility bills, or rent due from not fulfilling the lease.  Evictions and broken leases are considered separately during the renter’s qualification process apartments go through.

Every management company assess your broken lease differently.  The tend to categorize them into money owed and no money owed.  The majority of Austin rental properties will not take an applicant that still owes money to another rental property.  On the other hand, if you have a broken lease with no money owed to the property, it is much less likely to affect your application.  Even if the original broken lease resulted in you legally owing the money property, but you have since paid the balance to $0, it is less likely to affect your application.

If you have a broken lease with money owed, some rental properties that have a less thorough computerized qualification process discover your debt to another rental property because it shows up on your credit report.  In these cases if does not appear there, then they may not to discover it.  Others that do a more thorough manual qualification process are likely to call your previous rental properties, and will discover the debt then.

Occasionally an apartment will take circumstances into account when considering an applicant that has a broken lease and may allow you to pay an extra deposit if the money owed to the other property is less than a certain breaking point, for example $1500.  Other apartments may allow you to arrange a payment plan with the owed property based on a minimum amount each month in order to consider the broken lease ‘no money owed’.

If you have a broken lease, whether you owe money on it or not, you would benefit greatly from an apartment locator or apartment finder.  Our expertise and personal relationship with most property management will help you navigate the rental waters and our service is free to you.

Thursday, April 14, 2011

Renting vs. Home Ownership

Read this article on Austin Apartment Specialists' SlideShare Account

Many people are unsure if they want to continue renting or if they should buy a home. There are many things to consider. A great resource is this article is on the Texas Apartment Association website.

  • What will it cost you?
  • Buying a home usually requires a substantial investment of cash for a down payment, closing costs, and points paid to lenders. You may also need to buy appliances, additional furniture, window coverings, and other items.
  • What will you get for your money?With a home, you may possibly have a yard, a community pool or other amenities, and more space. Of course you'll also be responsible for maintaining the yard, heating, and cooling a larger space, and perhaps paying homeowner association dues to maintain the pool and other amenities.
  • Will you be free to quickly relocate?If your company relocates employees frequently, or you're not interested in staying somewhere for more than a year or two, you may want to think twice about buying. What happens if the neighborhood changes, crime increases, or you don't get along with your neighbors? The costs you incur to sell a home (realtor's fees, closing costs, costs to market the property) may outpace any gains in the property's value or selling price.
  • How likely is it that your life and your needs will change?Is your family growing, or do you have children who are getting ready to leave home or go to college? Is divorce or separation a possibility in your near future? Will there be other demands on your income or savings?
  • What return will you get on your investment?
    Most people believe property always appreciates or gains value, but that's not always the case. A change in the neighborhood or the economy can affect the value of your property. Sometimes you'll make money as a result, but you may lose money on your investment if you haven't owned the property for long. You'll also need to consider any additional money that you put into the property for improvements or upkeep while you live there.
  • How much maintenance do you want to do?When you own your home, you are responsible for making the repairs or hiring others to make them, being available when repairs need to be made, paying for the repairs, etc.
  • Where do you want to live, and is what you want available there?If you want to live close to your work or school, are homes available in that area and can you afford them? Can you find rental housing where you would like to live, or is a home you buy the only option?
  • Are there any tax advantages?
    If you itemize your income tax, you can deduct interest you pay on a mortgage, and property taxes that you pay. You can also deduct points paid to lenders in the year that you incur that cost. If you don't itemize, you won't get these deductions.
  • What will make you happy?
    Ultimately, you need to decide if you'll be more satisfied and comfortable in a home you own, or in a home you rent.