Leasing, Property Management, and Specialized Transactions
Licensing and the management relationship
Managing rental property for another for compensation is brokerage and requires a license unless an exemption applies (for example, an owner managing his own property, or a salaried on-site manager paid no commission). Property managers owe the owner fiduciary duties, must hold owner funds and tenant deposits in trust or escrow, reconcile monthly, and keep records. Management agreements should be written and disclose fees.
Texas Property Code Chapter 92
Security deposits must be returned within 30 days after move-out and surrender, with a written itemization of deductions. Wrongful withholding exposes the landlord to the deposit, $100, three times the amount wrongfully withheld, attorney's fees, and court costs. Landlord repair duties generally begin after written notice (with emergency exceptions), and the tenant's remedies are statutory.
Lease concepts
A lease over one year must be in writing. An assignment transfers the tenant's entire interest, creating privity between assignee and landlord; a sublease transfers less than the whole and the original tenant remains liable. Commercial structures: gross, modified gross, net, triple net (tenant pays taxes, insurance, CAM), percentage rent, and ground leases. Also know estoppel certificates, subordination/non-disturbance agreements, TI allowances, and CAM reconciliation.
Traps
- Treating a security deposit as rent or as the manager's funds.
- Calling a residential lease a "net" lease.
- Forgetting the original tenant stays liable after a sublease.
Rule of thumb
30 / 100 / 3x - 30 days, $100 penalty, treble damages.