DAVID J. WILLIS ATTORNEY
Copyright © 2018. All rights reserved worldwide.
Residential Evictions in Texas
by David J. Willis, J.D., LL.M.
Eviction is a judicial process by which an owner recovers possession of real property and, if appropriate, a judgment for unpaid rent, attorney's fees (if any), and court costs against a defaulting tenant or occupant. A note on technical legal terms: "forcible detainer" applies when an owner seeks to evict a person lawfully in possession (e.g., a tenant); by contrast, "forcible entry and detainer" (or FED for short) occurs when a person without legal authority to be on the premises (e.g., a trespasser) refuses to surrender possession. In practice, the terms are commonly used interchangeably.
"An action for forcible detainer is a 'summary, speedy, and inexpensive remedy for the determination of who is entitled to the possession of premises' . . . . The only issue to be resolved in a forcible detainer action is the right to immediate possession of the property; the merits of title are not adjudicated." Yarbrough v. Household Finance Corporation III, 455 S.W.3d 277 (Tex.App.—Houston [14th Dist.] 2015, no pet.).
Superior Right to Immediate Possession
The legal key is superior right to immediate possession. "To establish a superior right to immediate possession, [landlord] had the burden to prove (1) [landlord] owns the property, (2) [tenant] is either a tenant at will, tenant at sufferance, or a tenant or subtenant willfully holding over after the termination of the tenant's right of possession, (3) [landlord] gave proper notice to [tenant] to vacate the premises, and (4) [tenant] refused to vacate the premises . . . . The only dispute is whether the record conclusively establishes that [tenant's] right of possession terminated." Shields L.P. v. Bradberry, ___ S.W.3d ___ (Tex. 2017) (No. 15—0803; 5-12-17).
The landlord's objective is usually to gain a judgment and a writ of possession. The judgment can be for both possession and damages or for possession only. Because collecting judgments against residential tenants can be quite difficult in Texas (there is an extensive list of assets that are exempt from execution) a residential landlord may occasionally choose to be content with a judgment for possession only.
Justice courts have original jurisdiction in eviction cases. (Tex. R. Civ. P. 510.3(b) and Tex. Prop. Code § 24.004) and may award damages up to $10,000. Note, however, that the "forcible entry and detainer action is not exclusive, but cumulative, of any other remedy that a party may have in the courts of this state. If all matters between the parties cannot be adjudicated in the justice court in which the forcible entry and detainer proceedings are pending due to the justice court's limited subject matter jurisdiction, then either party may maintain an action in a court of competent jurisdiction for proper relief." McGlothlin v. Kliebert, 672 S.W.2d 231, 233 (Tex. 1984).
Evictions are conducted in justice courts located in various neighborhood precincts spread around Texas' 254 counties. When an investor arrives ready to do his first eviction, he may be told that the "forcible docket" begins at a certain time and that there are perhaps twenty or more cases ahead of him.
Basic Law and Procedure
Evictions are governed by Property Code chapter 24 and Civil Procedure Rule 500 et seq. The Rules of Civil Procedure applicable to evictions were extensively revised by the Texas Supreme Court in 2013 and old rules 523-591 and 737-755 were repealed.
The process begins with proper notice, governed by section 24.005 which requires that "the landlord give at least three days' written notice to vacate the premises before the landlord files a forcible detainer suit. . . ." A written lease may provide for either a shorter or longer period. However, as with all legal notice requirements, it is best not to cut the prescribed time period too close. Doing so may unwittingly provide the tenant with a defense. Also, if a landlord wishes to attempt to recover attorney's fees pursuant to sec. 24.006, the notice to vacate "must state that if the tenant does not vacate the premises before the 11th day after the date of the receipt of the notice and if the landlord files suit, the landlord may recover attorney's fees." As always, the best practice is to send the notice by both certified and first-class mail. It may also be posted on the door of the dwelling.
The eviction should be filed with the justice of the peace in whose precinct the property is located. At the hearing, the judge will determine which party has the superior right to immediate possession and what damages (e.g., back rent, attorney's fees, and court costs), if any, will be awarded to the landlord. These are the only issues to be considered by the court. A counterclaim by the tenant, regardless of subject matter or merit, is not permitted in an FED. Such tenant suits must be brought by separate action in any court (including that same justice court) where venue and jurisdiction are allowed (Tex. Rule Civ. P. 510.3(e)). It is also inappropriate to raise issues of title, since justice courts do not have authority over suits "for trial of title to land. . . ." (Tex. Gov. Code § 37.031). Jurisdiction over title issues generally resides with district courts.
In the case of a month-to-month tenancy (e.g., after a lease is expired) with no tenant default, the landlord may give a month's written notice that the landlord desires possession. No more than that need be said—no allegation of default is necessary. If the tenant does not leave, then an FED can be filed. In the case of default on an existing lease—failure to pay rent, for example—then a written 3-day notice to vacate should be given, after which the landlord may file an FED (Tex. Prop. Code § 24.005).
If the property is abandoned, is an eviction necessary?
If a tenant has truly abandoned and vacated a property, the owner may peaceably re-enter without judicial process, take possession, and change the locks. However, problems can occur when some of the tenant's possessions remain on the premises, raising the question of whether the property has actually been abandoned or not. Abandonment has occurred when a property is "empty, that is, without contents of substantial value . . . the term 'substantial value' does not mean merely substantial monetary value, but the term includes value attributable to the utility of the furniture. It is well known that furniture, because of age and condition, may have little monetary value, but to the owner or user has substantial utility, and retention in the house would evidence the absence of complete abandonment. From the evidence recited we are of the view that the reasonable mind could conclude there was furniture of substantial value in the house and therefore it was not vacant."Knoff v. U.S. Fidelity, 447 S.W.2d 497 (Tex. Civ. App.-Houston, 1969, no writ). If a substantial amount of personal property remains, the safer legal course is to pursue a formal eviction. It is a fact issue and a judgment call to be decided by the investor and his attorney.
Eviction Pursuant to an Executory Contract
Eviction of a buyer/tenant under an executory contract (e.g., a contract for deed) is a special case. Texas law views buyers under contracts for deed as more than mere tenants and so more care must be taken (and more requirements met) in the eviction process. Prop. Code sec. 5.063 outlines requirements which must followed exactly if the notice letter and eviction are to be valid in these cases. Note that the delinquent amount under the executory contract must be broken down into principal and interest. If the buyer/tenant has paid less than 40% of the amount due or made less than 48 monthly payments, the seller/landlord must provide a 30 day notice and opportunity to cure before seeking to regain possession of the property. If the default is not cured, then a 3 day notice to vacate may be given and an eviction may proceed normally from that point forward.
If the buyer/tenant under an executory contract has paid more than 40% of the amount due or made 48 or more monthly payments, then eviction is not available as a primary remedy. Pursuant to equity protection provisions of Prop. Code sec. 5.066, the seller/landlord must afford a 60 day notice and cure period, which is then followed by appointment of a trustee and a non-judicial foreclosure. Depending on the circumstances, an eviction may thereafter be required to regain possession.
Possession vs. Title Issues
As noted previously, there is a distinction between disputes concerning possession and disputes concerning title—although both issues may of course arise within the same case. Generally, justice courts have original jurisdiction over possession (Tex. Prop. Code § 24.004) and district courts have original jurisdiction over title (Tex. Const. art. V, § 8; Tex. Gov't Code § 26.043). Procedure Rule 510.3(e) also provides that the justice court must adjudicate the right to actual possession and not title. "Justice courts do not have jurisdiction to determine or adjudicate title to land, and neither does a county court exercising appellate jurisdiction in a forcible detainer action." Yarbrough v. Household Finance Corporation III, 455 S.W.3d 277 (Tex.App.—Houston [14th Dist.] 2015, no pet.). In Yarbrough, the plaintiff claimed that the eviction arose from a wrongful foreclosure that was based on a fraudulent deed of trust—a title issue, so the case belonged in neither justice court nor county court but in district court.
The case Gibson v. Dynegy Midstream Services, L.P. 138 S.W.3d 518, 522 (Texas.App.—Fort Worth 2004, no pet.) puts it this way: "Justice courts may adjudicate possession when issues related to the title of real property are [only] tangentially or collaterally related to possession. If, however, the question of title is so integrally linked to the issue of possession that the right to possession cannot be determined without first determining title, then the justice courts and, on appeal, the county courts, lack jurisdiction over the matter." Cases with title and possession issues that are "integrally linked" belong in District Court.
A Houston appeals court case elaborates: "Although a justice court has subject-matter jurisdiction over a forcible detainer action, the justice court, and a county court on appeal, lack jurisdiction to resolve any questions of title beyond the immediate right to possession . . . . On the other hand, a justice court is not deprived of jurisdiction merely by the existence of a title dispute; rather, it is only deprived of jurisdiction if the right to immediate possession necessarily requires the resolution of a title dispute." Black v. Washington Mutual Bank, 318 S.W.3d 414 (Tex.App.— Houston [1st Dist.] 2010, pet. dism'd w.o.j.).
The practical result? Cases with title and possession issues that are "integrally linked" usually wind up in District Court. A district court may pre-empt a justice court (or a county court that is hearing an FED appeal) on issues of possession when questions of title and possession are so intertwined that possession may not be determined without first determining title. In such cases, and only in such cases, may the justice court be deprived of jurisdiction. Bynum v. Lewis, 393 S.W.3d 916 (Tex.App—Tyler 2013, no pet.). But there is a caveat: the justice court (or county court on appeal) loses jurisdiction only if the right to immediate possession of the property first requires that title be adjudicated. In re. American Homes for Rent Properties Eight, LLC, 498 S.W.3d 153 (Tex.App.—Dallas 2016, no pet.).
Tenants and their attorneys should know that "merely raising the issue of title is not enough to defeat the justice court's original jurisdiction. The Property Code provides for parallel, separate title and possession suits in the justice court and the court courts at law unless resolution of possession necessarily requires the resolution of a title dispute." Gonzalez v. Wells Fargo Bank, 441 S.W.3d 709, 713 (Tex.App.—El Paso 2014, no pet.).
Another caveat: although justice courts have exclusive jurisdiction over forcible detainer (eviction) cases, there is an assumption involved that a landlord-tenant relationship exists between the parties. In the absence of such a relationship, the justice court may not be able to ascertain who has the right to immediate possession with first addressing title issues—something it lacks the authority to do. Goodman-Delaney v. Granthan, 484 S.W.3d 171 (Tex.App.—Houston [14th Dist.] 2015, no pet.).
Note that in Harris County, the county courts at law (but not the justice courts) have the benefit of an exception under the Government Code and may hear title issues.
If the concepts of possession and title are legally distinct, is it then possible to pursue a judgment for possession in justice court while independently seeking the declaratory judgment of a district court regarding title? Yes. Moreover, the judgment rendered in the justice court as to possession is not determinative of the outcome of the district court proceeding. AAA Free Move Ministorage, LLC v. OIS Investments, Inc., 419 S.W.3d 522 (Tex.App.—San Antonio 2013, pet. denied). The justice court remedy of forcible detainer is designed to be a fast and efficient means of establishing which party has the superior right to immediate possession of the property—so the res judicata effect of such a judgment is limited to this single narrow issue. The parties are free to sue one another under a different cause number (either in justice court or in a different forum) on other, related issues. Federal Home Loan Mortgage Corporation v. Pham, 449 S.W.3d 230 (Tex.App.—Houston [14th Dist.] 2014, no pet.).
Appeals: Cash Bonds versus Pauper’s Affidavit
Motions for new trial are not allowed in justice court eviction cases. However, within five calendar days of judgment, the losing party may (with or without good reason) appeal the justice court's judgment to the local county court at law. Tex. R. Civ. P. 510.9. The appeal results in the file being packed up and sent to the main county courthouse where it will be heard de novo (as a new case). Why is this so? It results from an interesting historical quirk: the justice court is not a court of record. No transcript is kept of the proceedings or testimony. So everything starts over.
The justice of the peace will set a cash appeal bond which may be three times the monthly rent. Property Code sections 24.00511 and 24.00512 require that the JP's judgment set the amount of the bond, a long overdue change. Either party may then contest the amount of the bond within five days. However, the cash bond may be waived if the tenant files an affidavit stating that he or she cannot afford it. The content of the "pauper's bond" or "pauper's affidavit" is prescribed by statute (Tex. Prop. Code §24.0052) and is considerably more complex than it used to be.
Once a pauper's affidavit is filed, the landlord has the right to request a hearing and contest the affidavit, alleging that the tenant does in fact have sufficient resources for the bond. The tenant can be questioned on the subject of his or her assets and income. It is generally pointless to go through this exercise, however, since pauper's bonds are almost always approved by justices of the peace, and the file is then turned over to county court (Tex. R. Civ. P. 510.9(c)).
What happens if there is no appeal?
If the tenant does not appeal within five days, the judgment of the justice court becomes final and the landlord may proceed to the enforcement phase by obtaining and serving a writ of possession. This requires going to the county clerk's office and paying a nominal fee. The constable then serves the writ, but first usually posts a notice on the tenant's door allowing 48 hours to move out. After that, the constable may show up with a truck, forcibly evict the tenant, and put the tenant's possessions in storage where charges accrue at the tenant's expense.
Pauper’s Bond Appellants
Important: a tenant who files a pauper's affidavit must, after notice, pay a month's rent to the justice court pursuant to Property Code section 24.0053—and do so before the file is shipped to county court. If the tenant fails to do so, section 24.0054 provides:
(a) During an appeal of an eviction case for nonpayment of rent, the justice court on request shall immediately issue a writ of possession, without hearing if:
(1) A tenant fails to pay the initial rent deposit into the justice court registry within five days of the date the tenant filed a pauper's affidavit as required by Rule 749b(1), Texas Rules of Civil Procedure, and Section 24.0053;
(2) The justice court has provided the written notice required by Section 24.0053(a-1); and
(3) The justice court has not yet forwarded the transcript and original papers to the county court as provided by Subsection (a-2).
This provision gives landlords who prevail an effective remedy at the justice court level, without having to wait until the entire eviction file is transferred to the county clerk's office and set up as a new case.
Rule 510.9 Motion in County Court: Obtaining a Writ of Possession
The use of pauper's affidavits in appeals may in some respects appear unfair, but it can be turned to the landlord's advantage: if the pauper's bond is approved, and the county court takes over the case, the tenant is then obliged to begin making monthly rental payments to the court and continue to do so during the pendency of the appeal. If the tenant fails to do this (and most do) the landlord may seek immediate possession from the county court based on motion pursuant to Texas Rule of Civil Procedure 510.9(c)(5)(B), which permits a tenant to remain in possession only so long as the following requirements are met:
(i) Within 5 days of the date that the defendant files a sworn statement of inability to pay [the appeal bond], it must pay into the justice court registry the amount set forth in the notice provided at the time the defendant filed the statement. If the defendant was provided with notice and fails to pay the designated amount into the justice court registry within 5 days, and the transcript has not been transmitted to the county clerk, the plaintiff is entitled, upon request and payment of the applicable fee, to a writ of possession, which the justice court must issue immediately and without hearing.
Cash or Surety Bond Appeals
(ii) During the appeal process as rent becomes due under the rental agreement, the defendant must pay the designated amount into the county court registry within 5 days of the rental due date under the terms of the rental agreement.
If an appeal bond (cash or surety) is posted, there is no requirement that the tenant pay rent while the appeal is pending. Even so, it is good practice for the landlord's attorney to file a motion requesting payment of rent into the court registry based on the theory that no one should live for free, an argument to which judges are generally receptive. A preferential setting should also be requested if the county court in question does not already automatically provide such a setting in eviction cases.
The bad news for landlords? If the tenant is a professional deadbeat who has played this game before, the property may be tied up for months.
The remedy of foreclosure is available to lenders if the borrower defaults on a real estate lien note. Specified notice and other requirements must be followed if the foreclosure is to be valid. Tex. Prop. Code §§ 51.002 et seq. Foreclosure sales are held in Texas on the first Tuesday of each month between 10 a.m. and 4 p.m. This process gives the new owner title; the next step is to obtain possession.
The successful bidder at the foreclosure sale (likely the lender) gets a trustee's deed which cuts off all junior liens including purchase money liens and mechanics liens. A valid foreclosure usually terminates existing leases as well. Coinmach Corp. v. Aspenwood Apartment Corp. 417 S.W.3d 909 (Tex. 2013). Even so, the new owner may not simply lock out a residential tenant. Tex. Prop. Code § 92.0081.
A brief review of leasehold terminology may be useful at this point. A tenant who remains in possession after expiration of a lease is a "holdover tenant." If the tenant holds over without consent from the landlord, he is a "tenant at sufferance;" if holding over occurs with landlord consent, the tenant is a "tenant at will."
If the occupant of residential property is a tenant at will or by sufferance then the new owner under the trustee's deed must give the usual three-day notice to vacate, file an FED petition in justice court, get it served, have it heard by the justice of the peace, and then wait five days for a final judgment and a writ of possession. The new owner must then wait until the constable posts a 48-hour notice on the door and then forcibly removes a former borrower who is otherwise unwilling to leave. Elapsed time? Often three to four weeks, and even then the former borrower may appeal, possibly gaining additional free-rent time in the property.
Section 24.005(b) provides that new owners who have purchased foreclosed property must give a residential tenant in good standing "at least 30 days' written notice if the purchaser [at foreclosure] chooses not to continue the lease.".
What if there is a wrongful foreclosure case pending in district court? Can the district court enjoin the eviction?
District courts have no jurisdiction to issue an injunction stopping an eviction. McGlothin v. Kliebert, 672 S.W.2d 231, 232 (Tex. 1984); TMC Medical, Ltd. v. The Lasaters French Quarter Partnership, 880 S.W.2d 789 (Tex. App.—Tyler 1994, writ dism'd, w.o.j.).
Collecting Judgments from Tenants
The key objective for the owner is to gain a writ of possession. Obtaining a judgment for monetary damages against a residential tenant in Texas is usually an empty formality since such judgments are seldom collected. Texas has long been a safe haven for debtors, and both the Texas Constitution and the Property Code exempt a long list of real and personal property from execution upon a judgment. The average residential tenant has very little that a landlord will be allowed to take and, since garnishment of wages is unconstitutional, collection is problematic. Often the best strategy is to record an abstract of the judgment against the tenant in the real property records in the hopes that one day in the next ten years the tenant will become affluent enough to own and sell property. If this transaction occurs through a title company, the title company can be expected to collect funds to pay the judgment.
What does the attorney need from the client?
When asking that an attorney initiate the eviction process, the client should be prepared to supply (1) a copy of the lease agreement; (2) copies of any correspondence or demand letters; and (3) a brief summary of the specific items of monetary and technical default.
Information in this article is provided for general educational purposes only and is not offered as legal advice upon which anyone may rely. The law changes. Legal counsel relating to your individual needs and circumstances is advisable before taking any action that has legal consequences. Consult your tax advisor as well since we do not give tax advice. This firm does not represent you unless and until it is retained and expressly retained in writing to do so.
Copyright © 2018 by David J. Willis. All rights reserved worldwide. David J. Willis is board certified in both residential and commercial real estate law by the Texas Board of Legal Specialization. More information is available at his website, http://www.LoneStarLandLaw.com.