We have four seasons in Texas: 1) Kinda Summer, 2) Almost Summer, 3) Summer, and 4) two days in January when you can wear your sweater! It is July in Texas! The Lone Star state was so hot that when the temperature dropped to 95 degrees, I felt chilly. Thank goodness for air conditioners!
Side note: big shout-out to our onsite maintenance teams and FWAA HVAC companies! They are superheroes all year, but especially during the Summer.
Our July utility bill will be a stark reminder that July is here. A three-digit, crooked-number electric bill adds to the heat-related stress. Rent increases, food prices, and inflation already cause many of our residents to feel financially strained. Some cost-burden residents need to pay more attention to their June and July electric bills.
August rolls into September, and the residents burdened with consumer debt and overwhelmed with other expenses fail to pay their August electricity bill. By Labor Day, they have a huge outstanding utility balance. Temperatures and tempers rise when residents receive utility disconnect notices. Stress turns to anger and sometimes defiance.
To help you and your onsite teams manage the challenges that occur during Texas summers, this month’s article summarizes the REDBOOK guidance on utilities rules and regulations. Per usual, REDBOOK Blues does not provide legal advice. If you need legal advice, contact one of FWAA’s member attorneys (https://www.aatcnet.org/legal-services-program).
In the past, landlords were prohibited by state statutes from cutting off utilities for non-payment. The good news is you now can! But, before taking any action regarding utility disconnections, read the TAA REDBOOK article “Disconnecting Electricity When Bills Are Not Paid.” https://www.taaredbookonline.org/business-practices/assumed-business-names/disconnecting-electricity-when-bills-are-not-paid
Like many operational issues, just because you can disconnect a resident’s utilities does not necessarily mean you should. Before exercising this landlord privilege, consult the REDBOOK and, if necessary, contact competent legal counsel.
Following is a summary of the above article:
In 2013, the Texas Legislature amended the law governing utility disconnections to allow a rental property owner to interrupt electric service to certain residents who fail to pay a sub-metered, allocated, or prorated electric bill. Landlords must provide the resident with specific notice, and, like most landlord-tenant issues, the landlord must follow statutorily defined procedures.
The Law (Texas Property Code Section 92.008 – Interruption of Utilities):
TAA’s general counsel points out the following in this statute:
1) Pay attention to the language following “if.”
2) There are new landlord rights in this statute, but there are also restrictions.
This law states a landlord who sub-meters electricity or allocates or prorates non-sub-metered master-metered electricity may cut off electric service for non-payment by the tenant of an electric bill if:
1. This provision is provided to the renter in writing. The required language for disconnecting electric service has been incorporated into the online versions of the Electrical Submetering Addendum and Lease Addendum for Allocating Mastermetered Electrical Costs.
2. The tenant has not paid the electric bill on or before the 12th day after the bill was issued;
3. A separate, advanced written notice of interruption is either mailed or hand-delivered to the tenant; and
4. The written notice must include “Electricity Termination Notice” either underlined or in bold.
The notice must also contain:
1. the date service will be interrupted;
2. the amount the resident must pay to avoid cut-off;
3. where the resident can pay the bill;
4. a statement that the landlord will not apply utility payment to rent or other outstanding balances;
5. eviction procedures; and
6. residents’ rights.
This notice must be delivered by the first day after the bill is past due and by the fifth day before the interruption date.
While cutting utilities is helpful for collecting rent, there are some significant restrictions. You cannot cut off utilities if:
1. it causes the resident to become seriously ill or more seriously ill;
2. if the previous day’s highest temperature does exceed 32 degrees the day before or the day of the interruption (not likely in Summer);
3. the National Weather Service issues a heat advisory on one of the two days prior to cut-off; and
4. if a resident has entered a payment plan.
If a resident pays the outstanding balance or the landlord and tenant enter a payment plan, the landlord must restore electric service within two hours.
As with many landlord-tenant laws, this statute is powerful but precise. Before disconnecting electric service, you should read and understand your rights and responsibilities under this law. No one wants to be a heat-miser, but free electricity should never be taken lightly.
Now, where did I store my sweater?
April Royal, Birchstone Residential, is FWAA’s 2024 Treasurer and Government Affairs Committee Chair.
