It's the Law

State Now Requires Flood Disclosure Notice

What is required, what is considered flooding and your legal rights and responsibilities.

By HOWARD BOOKSTAFF, Hoover Slovacek LLP , HAA General Counsel

WHETHER YOU CALL yourself Katrina, Harvey, Ida or Nicholas or whether you are a tropical depression, tropical storm or hurricane, you could have had, and probably have had, a substantial impact in the Gulf Coast area. In Houston, nobody is surprised when flooding occurs after a strong rainfall.

The Texas Legislature has not been blinded to the impact that flooding has had on life in Texas. A number of bills have been filed over the past couple of sessions suggesting that landlords should tell tenants if the property where the tenant is leasing has flooded. Most of these bills have failed, but one last session successfully passed. The bill is House Bill 531 and takes effect January 1, 2022.

The new law adds Section 92.0135 to the Texas Property Code and applies to all residential rental properties in Texas. Let’s take a look at what you will be required to do.

What is required to be disclosed?

There are two disclosures required under the new law:

1. A landlord is required to provide to a tenant a written notice substantially equivalent to the following: (Landlord) ( ) is or ( ) is not aware that the dwelling you are renting is located in a 100-year floodplain. If neither box is checked, you should assume the dwelling is in a 100year floodplain. Even if the dwelling is not in a 100-year floodplain, the dwelling may still be susceptible to flooding. The Federal Emergency Management Agency (FEMA) maintains a flood map on its Internet website that is searchable by address, at no cost, to determine if a dwelling is located in a flood hazard area. Most tenant insurance policies do not cover damages or loss incurred in a flood. You should seek insurance coverage that would cover losses caused by a flood.

Note: A landlord is not required to disclose on the notice 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. A number of bills have been filed over the past couple of sessions suggesting that landlords should tell tenants if the property where the tenant is leasing has flooded. Most of these bills have failed, but one last session successfully passed. The bill is House Bill 531 and takes effect January 1, 2022.

2. If a landlord knows that flooding has damaged any portion of a dwelling at least once during the five-year period immediately preceding the effective date of the lease, the landlord shall provide a written notice to a tenant that is substantially equivalent to the following: (Landlord) ( ) is or ( ) is not aware that the dwelling you are renting has flooded at least once within the last five years.

What is considered “flooding?”

“Flooding” is defined as a general or temporary condition of partial or complete inundation of a dwelling caused by: (A) the overflow of inland or tidal waters; (B) the unusual rapid accumulation of runoff or surface waters from any established water source such as a river, stream, or drainage ditch; or (C) excessive rainfall.

Can the notice be included as part of a lease?

No. The notice required by the new law must be included in a separate written document.

When is the notice required to be given?

The notice required by the new law must be given to the tenant at or before execution of the lease.

What is the penalty for noncompliance?

If a landlord violates the new law and a tenant suffers a substantial loss or damage to the tenant’s personal property as a result of flooding, the tenant may terminate the lease by giving a written notice of termination to the landlord not later than the 30th day after the date the loss or damage occurred. For the purposes of this requirement, a tenant suffers a substantial loss or damage to personal property if the total cost of repairs to or replacement of the personal property is 50% or more of the personal property’s market value on the date the flooding occurred. Termination of the lease is effective when the tenant surrenders possession of the dwelling.

Not later than the 30th day after the effective date of the termination of a lease, the landlord is required to refund to the tenant all rent and other amounts paid in advance under the lease for any period after the effective date of the termination of the lease.

If the tenant terminates the lease under the new law, does the tenant get out of paying any delinquencies as of the termination date?

No. The law does 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.

Can a landlord terminate a lease because of flooding?

Yes. A landlord’s right to terminate the lease is pursuant to statute and the lease.

Section 92.054(b) of the Texas Property Code provides that if after a casualty loss the rental premises are as a practical matter totally unusable for residential purposes and if the casualty loss is not caused by the negligence or fault of the tenant, a member of the tenant’s family, or a guest or invitee of the tenant, either the landlord or the tenant may terminate the lease by giving written notice to the other party any time before repairs are completed. If the lease is terminated, the tenant is entitled only to a pro-rata refund of rent from the date the tenant moves out and to a refund of any security deposit otherwise required by law.

The Texas Apartment Association lease also contains provisions allowing the landlord to terminate the lease in the event of substantial damages to the premises. Section 26.5 of the current version of the TAA lease provides that if the owner believes that fire or catastrophic damages are substantial or if performance of needed repairs poses a danger to the tenant, the landlord may terminate the lease by giving the tenant at least seven days written notice. The TAA lease is currently in the process of being modified, however, it should contain a similar provision allowing the landlord to terminate the lease if damages to the dwelling or building are significant or performance of needed repairs poses a danger to the tenant.

When should we be prepared to give the required disclosure notice?

House Bill 531 states that the new law applies to a lease agreement entered into or renewed on or after January 1, 2022. Consequently, if you sign a lease on or after January 1, 2022, the flood disclosure notice should be given at or before the execution of the lease. If you have a lease that is renewing on a month-to-month basis, the flood disclosure notice should be given at or before the first renewal that occurs on or after January 1, 2022.

Flooding can occur at any time in apartment communities in Houston and the surrounding areas. Hopefully this article helps you understand your new obligations with respect to providing a flood disclosure notice.

Want to see current and previous issues of ABODE online? Go to http://issuu.com/haa_abode.