Texas Restricts Evictions Due to COVID-19: Landlord Considerations

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In the wake of the COVID-19 pandemic, the Supreme Court of Texas along with many Texas counties have issued moratoriums on evictions and foreclosures, the applicability of which remains varied and depends on local orders.

TAKEAWAYS

  • Landlords should carefully review local county orders to understand whether applicable eviction limitations apply to residential tenants, commercial tenants or both.
  • Even though evictions are currently on hold, landlords should carefully review their leases and continue to fulfil their obligations thereunder in order to protect their rights once the courts have reopened.
  • The limitations vary on whom they protect and what remedies are restricted, but they do not constitute forgiveness of the underlying obligations.

On April 6, in response to the COVID-19 pandemic, the Texas Supreme Court issued Emergency Order 9, which extends its previous Emergency Order 4 prohibiting any trial, hearing or other proceeding in an eviction to recover possession of residential property under Chapter 24 of the Property Code and Rule 510 of the Texas Rules of Civil Procedure until after April 30, 2020.

In response to the Supreme Court’s order, many Texas counties, including, but not limited to, Harris (Houston), Dallas (Dallas), Collin (Plano) and Travis (Austin) have each issued similar orders prohibiting evictions through at least April 30, 2020.

However, it is important to note that, while the Supreme Court’s order is limited to residential properties, most county orders do not make the same distinction; instead, their blanket prohibitions on evictions proceedings and related court closures implicitly include both residential and commercial tenants or, in the case of Collin County, explicitly include commercial tenants.

As April 1 came and went, landlords and tenants across Texas were faced with the reality of how to handle rent payments (or the failure thereof) during the COVID-19 pandemic. While evictions have been temporarily placed on hold, landlords still need to consider a number of factors under their leases to ensure that they are adequately protected and prepared when the courts reopen.

Landlords should carefully review the default provisions in their leases and closely adhere to the procedures contained therein, including providing any required notice and cure periods to their tenants, since many leases provide cure periods for failure to pay rent before such failure becomes an event of default permitting the landlord to exercise remedies. Additionally, some leases provide that a landlord can only pursue remedies for a tenant default if the landlord itself is not in default under the lease. In such cases, the landlord should be vigilant in continuing to perform all of its obligations under the lease, including providing necessary building services and utilities, even if their tenants are not permitted to work at their premises because of state or local shelter-in-place orders.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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