Month: August 2021

Supreme Court Says Landlords can Evict img

Supreme Court Says Landlords can Evict

  • Last week, the Supreme Court struck down the CDC’s nationwide eviction moratorium.
  • But state or local eviction moratoriums may still exist, including in Central Texas.
  • It is time, however, to challenge those in court and get them thrown out also.

Big news in the eviction moratorium world late last week. The United States Supreme Court took up a challenge to the CDC’s nationwide eviction moratorium that we have discussed previously. And its ruling was good for landlords.

So what did they say and what does it mean for Texas landlords? Well that’s what we talk about in this week’s blog entry.

CDC Eviction Moratorium

We have talked about it previously in this blog, but in case you do not remember, last summer, the Trump administration had the CDC issue a nationwide eviction moratorium for non-payment of rent. The basic justification was that a lot of evictions would be a public health crisis during COVID. It was originally scheduled to last until the end of 2020.

But the Biden administration has continued to extend the moratorium. The latest efforts came as it was expected to expire at the end of July. The CDC again extended it until at least October 3, 2021.

As you likely recall, under the CDC moratorium, a landlord cannot evict a tenant for non-payment of rent if that tenant provides a declaration that states he or she cannot pay rent as a result of a loss from COVID. There are some exceptions that we have discussed previously, but that’s basically the overall structure.

US Supreme Court Ruling

On Thursday last week, the US Supreme Court weighed in on the CDC moratorium for the first time. This was as a result of a lawsuit brought by a group of landlords challenging the moratorium.

Its not particularly surprising that there was a challenge to the moratorium. It has always been on shaky legal grounds. Indeed, when Biden first extended it, he acknowledged that it was on dubious executive power. I personally think you could make a takings/eminent domain claim for it. But some experts in that area may be able to disagree.

But the bottom line, during the heart of 2020, while landlords knew the legal justification was flimsy, for the most part they did not want to challenge the CDC’s authority and get the bad publicity that would accompany a challenge. But with unemployment rates back down to pre-COVID levels, it seemed ridiculous to continue to make landlords bear the brunt of this any longer. As a result, some landlords finally challenged it and the challenge made its way to the Supreme Court.

On Thursday, the Supreme Court finally struck down the CDC’s shaky moratorium. The Court said that, even though the CDC has some emergency powers, this does not fall within them. And it is up to Congress to make a law giving the CDC this power. As a result, the moratorium was immediately ended.

What does this Mean for Texas Landlords?

Now that there is no longer a nationwide moratorium, does that mean that Texas landlords can move forward with evictions? Come on. You know the answer. Maybe.

Seriously, though, while the nationwide moratorium is no longer in effect, any state and local ones may still exist.

The most prominent of these are in Central Texas – specifically Austin and Travis County. These has been previously discussed in this blog. But basically you may not be able evict a tenant for non-payment of rent if the monthly rent is less than $2,450 per month. There are some potential exceptions, so please read our previous blog entries or give us a call to discuss further.

But that’s not even the end of the analysis. Because, as you may remember, Governor Abbott recently declared that all local COVID ordinances are rescinded. So what’s the story? Can an Austin landlord evict for non-payment of rent? And should he or she challenge the local ordinances in court?

The answer to the first question is maybe. And the second – in my opinion – is definitely. Its beyond time for governments to stop commandeering landlord’s property. And the way to get them to stop is to challenge these ordinances in court. We can help – if you have an issue with a non-payment eviction, please give us a call.

Hurry – Time is Running Out to Lower Your Property Taxes

Hurry – Time is Running Out to Lower Your Property Taxes

  • The total property taxes owed are a function of the appraised value of your property multiplied by the tax rate set by the local taxing entities.
  • You can only protest the appraised value by appealing it and getting a hearing in front of the appraisal review panel.
  • If you do not get a good result from that panel, you can file a lawsuit but you have to do it quickly.

Well that is a catchy headline eh? What the heck is Bukowski talking about? The deadline for filing a property tax protest in Texas is May 15. That’s true – but the protest before the local appraisal review panel does not have to be the final step.

And that’s what we are going to talk about this week in the blog. There are a lot of deadlines for property tax protests – and certainly May 15 is a big one. But even if you did not have much success in front of your local panel, you still have an opportunity to lower your taxes. And by the end of this article, you will know exactly how to do that.

Counties Releasing Proposed Rates

We have discussed this before in the blog, but when we talk about lowering your property taxes, we specifically mean lowering the appraised value of your property. That’s because your taxes are a function of two different values – the appraised value of your commercial real estate multiplied by the tax rate set by the local taxing entities.

As a property owner, you have no control over the tax rate that the local entities set. You can only protest your appraised value. That’s how you lower the property taxes.

Under Texas law, the taxing entities are required to publish or notify taxpayers of their proposed tax rates before they finalize them. Some counties have an estimated tax calculator that you can use to determine what your taxes will likely be. Travis County, for example, has recently updated its tax calculator with the new proposed rates. You can, therefore, see your potential tax bill by entering your address at that site.

You May Still be able to Lower Your Taxes

For a property owner, therefore, all that is left is to fight the appraised value of your property. And if you are still reading this blog, you likely know that the deadline the protest those appraised values is May 15 (usually). That is generally a hard deadline and if you did not protest before it, its unlikely you will be able to lower the values this year.

But if you did protest and got a bad result at the formal hearing before the local appraisal board, you still have another option. A property owner has the right to appeal the panel result to a district court. But it must be done quickly.

Generally, a property owner has to file the lawsuit within 60 days of when you receive the Panel’s notice of award from the formal hearing. That means the property owner has to act quickly.

These lawsuits are quite common. There are many filed every year throughout the state. Once you file one, the appraisal district will hire a lawyer to represent it and then the negotiations begin. To get a good resolution, it is often necessary to hire an expert to do a full appraisal of the property. But when that is done, it is our experience that appraisal districts are frequently willing to negotiate and reach a settlement on what the appraised value of your property should be.

So bottom line – if you protested your property taxes and did not get a satisfactory result from the local panel, you can still file a lawsuit to appeal that result. But YOU MUST DO IT QUICKLY. There is a strict deadline to file the suit. So please do not delay. And if you need help, call us at Bukowski Law Firm at 512-614-0335. We are glad to help.

Austin Housing Through the Roof img

Austin Housing Through the Roof

  • Austin is on pace to have the least affordable housing in the country outside of California.
  • As a result, developers keep building housing communities farther and farther from the city center.
  • The Austin City Council seems to want to start to fix the issue – but its unclear if they know how or have the votes to do so.

This week we are coming back to a popular topic in this blog – the rising costs of Austin’s residential housing market. I know we have talked about it a lot – but it’s a very important issue. Indeed, its hard to walk anywhere around Austin without discussing the increased housing costs.

There were a couple new developments this week that affect the market. And, as a result, I thought it was a good time to briefly discuss it again. In this week’s entry, therefore, we talk about the current residential market, what the City Council wants to do about the rising costs, and what they should do.

Current Housing Environment

This week Zillow released a new housing affordability study. And the news out of Austin is not great – unless, of course, you are planning to sell your house and leave the area. According to the report, the typical new homebuyer in Austin will spend 30.1% of their income on their mortgage by December. This would make Austin metro’s housing market the least affordable in the country outside of California.

I obviously do not have to explain that this is not great news. The obvious and predictable result of this is that people are moving farther and farther from the city center – where many jobs are. For example, Townbridge Capital and Dream Finders Homes announced that it has been approved for and will soon start construction of 131 residential lots in Taylor. And it has plans to build up to 316 more homes in a second phase of construction.

The developer specifically stated that Round Rock and Pflugerville were becoming “oversaturated” for folks looking to build homes outside of Austin. Again, this is all a direct result of the unaffordability of Austin housing.

Can it be Controlled?

But what can be done? We have talked about this so many times before in this blog that I am sure you know what my answer will be. But what I think does not really matter. Fortunately the Austin Business Journal recently asked City Council members what they would like to see change in the future.

As we have also discussed many times before, Austin attempted to completely revamp its building code to provide more opportunities for higher density housing. But local neighborhood groups sued the city and won. As a result, any changes to the outdated code are on the backburner for the foreseeable future.

But those difficulties do not seem to have changed the City Council members’ goals. According to the ABJ article, most of the members want to change the code to enable more density along transit corridors, alter parking requirements to require fewer spots, and streamline the development process. The problem, of course, is this currently cannot be done with one big revamp of the building code. So it has to be done on a more piecemeal basis – at least until the final result of the lawsuit is determined. The Council seems to be split on whether this is worthwhile to do in pieces. It will likely require a 9 vote supermajority – and its not clear if that can be attained.

I am sure you are tired of reading me write how increased density will help solve Ausitn’s affordability problem. Therefore, I will not rehash the reasons for this – but building more livable/workable areas with higher density will help foster a better overall city. But to get that done will take some strong, civic minded council members to make the right vote. We will see in the coming year if Austin currently has those members on the dais.

What's that Date Again

What’s that Date Again?

  • The effective date of a purchase agreement is the critical time from which all of the rest of the dates of the purchase agreement flow.
  • As a result, its essential to know what the effective date is and build a critical dates list from there.
  • And once you know that date, you will know when your option period expires so that you can terminate the agreement if needed.

A few months ago on this blog, we talked a little about purchase agreements. Specifically, we talked about the TREC and TAR forms that a lot of people use in Texas when purchasing commercial real estate – and the problems with them. If you do not recall, while I think some of the promulgated forms can be useful, we always recommend our clients use our own purchase agreements that we have drafted. Or, at the least, let us add our riders to the TREC/TAR forms.

Well as I was looking for something interesting to write about this week (or, at least, interesting to me), I kept reading about acquisitions all over Texas. And it got me thinking about purchase agreements again. And what’s more interesting to my readers than the details of commercial real estate purchase agreements? Nothing.

So that’s what we are going to talk about this week. Specifically, I want to talk about Effective Dates and Option Periods and how important they are to commercial purchase agreements. So that’s what I do below.

What is the Effective Date?

Many of you probably already know this but there is almost nothing more important in a commercial real estate purchase agreement than the effective date. Everything in the agreement is based off of the effective date.

The effective date is pretty self-explanatory. It’s the date on which the contract is executed/becomes effective. The purchase agreement should define exactly what that date is. Its very important, therefore, that you or your lawyer read that section to confirm. Generally the effective date is one of two dates –

· the date the parties sign and execute the agreement or

· the date the title company receives the agreement and sends its acknowledgement.

But again, this will be defined in the agreement.

Once you determine what the effective date is, everything else flows from this. That’s why its so important to make sure you have the correct effective date. Next, its always helpful to get a critical dates list from the title company. This will help you keep track of the important dates in the agreement. But, of course, double check those dates to make sure they are accurate.

Don’t Forget the Option Period

One of the reasons the effective date is so important is that it determines when the option period expires. The option period, of course, is (usually) the time during which the Buyer can terminate the agreement for any reason and receive the entire escrow amount returned.

But the option period always has a hard deadline. And that deadline will be based off of the effective date. That’s why it is so important to make sure you know the effective date and how that dictates when the option period expires.

As I wrote above, a good title company will send you a critical dates list. And this will list the end of the option period, among other dates. But its essential that you or your lawyer double check these dates. Because if you try to terminate the agreement after the option period expires, you will likely lose your escrow amount.

One other part of the option period that is important – often a buyer can extend the option period with an additional deposit. We always try to put a clause like that into a purchase agreement when we represent the buyer. But again, the time you have to use the extension starts from the effective date. And if you miss the deadline, you likely will lose your earnest money deposit if you terminate the agreement.

So as you can see, everything starts from the effective date. And its vital to know what that date is. And while there are so many gray areas in the law – deadlines in a purchase agreements are not one of them. Its important you and your lawyer know the critical dates in your transaction.

Did Governor Abbott Just Help Texas Landlords

Did Governor Abbott Just Help Texas Landlords?

  • Despite a robust economic recovery, some local eviction moratoriums are still in place in Texas.
  • As a result, the local municipalities are requiring landlords to subsidize aid that should come from the local government.
  • But Governor Abbott’s latest executive order may have overruled those local orders.

Its dumb for me to start this blog by saying that COVID has been very tough on property owners. I mean – it has been but its been tough on everyone. And that includes both landlords and tenants throughout the US.

I work with a lot of landlords and I don’t know one that wasn’t extremely sympathetic to what their tenants were going through during COVID. So when different governments came through and asked them to subsidize their tenants rental payments, they were not thrilled, but they understood. For a while.

But August 2021 is not September 2020. Not only are a lot of people back to work – there have been news stories all over the place about businesses not being able to find help. As a result, its past time to stop asking landlords to subsidize the government’s efforts to support those in need.

Thankfully, the CDC has decided not to extend its eviction moratorium – despite a request from the Biden administration. Unfortunately, the same cannot be said of the Texas Supreme Court and the City of Austin. In the blog this week, therefore, we will talk about what eviction rules still exist and whether Governor Abbott just revoked all of them.

What is Still Standing

The CDC’s eviction moratorium officially expired on July 31, 2021.** As you certainly recall, this was a nationwide moratorium against evicting tenants for non-payment of rent if the tenant submitted an affidavit that he or she could not afford to pay his or her rent because of COVID. Thankfully, despite a request from the Biden administration to continue the moratorium, the CDC did not do so.

The Texas Supreme Court recently extended its pre-trial diversion program until at least October 1, 2021. Frankly, though, the Supreme Court’s program can be beneficial to both landlords and tenants. It simply requires landlords and tenants to head to the eviction diversion program prior to moving forward with an eviction proceeding if both parties agree to do so. In the program, the landlord and tenant try to find a payment plan that will work for both or see if there is any assistance available to the tenant.

Sadly, Austin’s eviction moratorium is not nearly as well designed. Its basically the same policy that I’ve written about previously – a landlord cannot evict a tenant for non-payment of rent if the rent is below $2450 per month. On July 27, the City extended the order with a couple of edits. From August 1 through August 31, if a tenant’s rent is $2,475 a month or less, landlords can only give notices to vacate for nonpayment if a tenant owes more than five months rent and the tenant has exhausted all rental assistance remedies. From September 1, through October 15, if a tenant’s rent is $2,475 a month or less, landlords can only give notices to vacate for nonpayment if a tenant owes more than three months rent and the tenant has exhausted all rental assistance remedies. In addition, the City is still requiring landlords to provide a 60 day notice of proposed eviction.

On Friday, Mayor Adler tweeted

“Austin continues to have the lowest unemployment rate in Texas and is tied with NYC for the lowest unemployment in the US! While the rest of Texas continues to recover, Austin remains one of the largest driving forces of the state’s workforce and economy.”

Despite this true statement, Mayor Adler continues to ask landlords to subsidize the government’s efforts to help people who cannot or will not pay rent. At this point, its just baffling why these moratoriums are still in force.

Did Governor Abbott Overrule Mayor Adler?

But help may be on the way for landlords. On July 29, Governor Abbott released a new executive order. In that order, Abbott stated –

“As stated above, business activities and legal proceedings are free to proceed without COVID-19 related limitations imposed by local governmental entities or officials. This paragraph 3 supersedes any conflicting local order in response to the COVID-19 disaster, and all relevant laws are suspended to the extent necessary to preclude any such inconsistent local orders.”

That sure sounds like Governor Abbott is saying is time to put aside the local orders and ordinances and go back to the normal Texas statutes governing evictions. As of this writing, its not clear whether courts will interpret Governor Abbott’s order to invalidate the local Austin (and other local) orders. But if I were arguing to a JP Court, that is exactly the argument we will make. I guess we will see shortly if the JP Courts agree.

** Since I wrote this blog post, the CDC has extended its eviction moratorium until October 3, 2021. It applies in counties that are experiencing substantial or high rates of COVID transmission. This would very likely apply in the big Texas counties.