Two fantastic workshops. For real. It’s my favorite thing in the world, to be spoonfed these amazing presentations.
First up: Rent by the Bedroom
Backstory: this became a flashpoint last spring, when a developer wanted to tear down some small complexes here:
and put in a big rent-by-the-bedroom student housing complex.
There was a pretty big community outcry.
Council approved it, but vowed to look at the predatory leasing practices and see what could be done. So here we are!
For what it’s worth, I think Council handled this correctly.
– We need physical housing to be built.
– We need landlord reform.
You shouldn’t hold the former hostage in order to accomplish the second, but the second is also urgently needed.
…
So let’s dive in! The speaker was Shannon Fitzpatrick (and these are her slides). She’s been a lawyer for Texas State, working with students, for the past 25 years or so. (Go listen here! I’m not doing it justice. It’s so interesting.)
Here’s what we’re basically comparing:
This part isn’t that bad. A student might not want to be on the hook for their roommates’ share of the rent.
Installment Contracts
This is where things start to get sleazy:
First, this “installments” contract.
The point is that it’s a different legal concept than a regular lease. This lets landlords skip out on the state laws that protect renters. And listen: Texas barely has any renter protections, so if you’re finding ways to cheat those, you are seriously trying to slumlord your way to profit.
Okay, so this installments contract. The basic idea is that you could sign a contract for $11,400, and then they break it into 12 monthly payments.
They show up on campus in October, and sell students hard on these apartments:
- They’re going fast! You’re not going to have a place to live next year!
- Your mom will be so proud that you’re making a grown up decision by yourself!
- No security deposit if you sign right now! (We’ll come back to this.)
So the kid flips through some pages (OF A 60 PAGE LEASE!) and signs.
Already, things are rotten and different than normal:
In general, you have to qualify to lease an apartment. If your income is too low to qualify, or your guarantor’s (parent, aunt, etc) income is too low to qualify, then you can’t rent the apartment.
BUT HERE, YOU’VE ALREADY SIGNED! So you can’t live there and you still owe $11K!
Next: regular leases have a “mitigation” clause. If you break your lease, you have to cover the rent until they re-rent the apartment. The landlord has to attempt to rent out the apartment.
Installment contracts do not have this clause. You break your lease, the company still gets their $11k. They can re-rent the apartment, and now they’re getting another $11K for the same room.
Also: They don’t pro-rate partial months. So you would owe rent on August 1st, even if you can’t move in until August 20th.
Next: “As-Is” Clauses
So the kid signed the lease in October.
Usually when you sign a lease, you look at the apartment. You say things like, “Are there any apartments on the second or third floor?” The leaser says, “Sure” and shows you one. You say something like, “Nah, I don’t want to be this close to the dumpster, I’ll go with the first floor apartment, after all.”
The point is that you’ve seen the actual apartment, and you know if it has mushrooms sprouting in the closets.
“As-is” clauses mean “You get the apartment in its current state, not in a pristine state.” But those are only valid if the tenant can inspect the premises. Since these kids are signing in October without seeing the actual apartment, they’ve signed all kinds of rights away.
They show up in August, see the mold, mushrooms, broken furniture, broken locks, etc, and they have no recourse. They’re not able to request a different apartment, because of the “as-is” clause.
Security Deposits
“Sign now and we’ll waive your Security Deposit! You’d be a fool not to sign!” – me, pretending to be a sleazy landlord.
So this is another scam. They waive the security deposit, and tenants lose some rights. Texas has specific laws that state that if you put down a security deposit, you’re entitled to some protections.
For example, you lose your right to a 30-day move out inspection. So they can come after you for up to four years for damages to your apartment. And they sometimes do! The speaker said that what happens is these complexes get sold every three or four years. Sometimes the new owners look at the past few years of tenants and shake them down for damages.
Also: #notallcollegekids but some college kids are little shits. Since they didn’t pay a security deposit, they don’t think they’re on the hook for damages. Chairs in the pool, trash the place, etc.
Roommate matching
In theory, this is fine. This is what happens in a conventional dorm.
But here, it’s done… maliciously? it’s pretty surreal. Here’s the understated tone from the speaker:
In practice it means that they don’t give a shit if you have allergies and the roommate has a cat, or if you are a quiet person and the roommate throws keggers.
But then it gets worse!
- You can’t move to a different apartment if you need to. She told a story of a kid who found his roommate, killed, gory, awful, in the living room. They made him stay in that unit.
- You can be moved even if you don’t want to! You dared to complain? Fine, you’re being moved. Pack up.
The companies are generally retaliatory and vindictive. You called us in for having cockroaches? We’re going to try to charge you for fumigating the building. Etc.
Just straight up being illegal:
For example:
Legally, they have to tell tenants who the owner is. But they don’t.
The very few protections that Texas law does offer, they can just skip out on doing them. Nobody holds them accountable. (Of course, this applies to all of San Marcos rentals! Not just students!)
What about the rest of San Marcos?
It is really important that we don’t limit this to college students! All renters need protections. San Marcos is mostly renters!
Many, many landlords are vindictive and retaliatory, or don’t provide a safe, clean environment. There’s a huge power imbalance between landlords and tenants. Tenants get exploited.
So what can be done?
Here’s what the speaker suggests:
and
The city lawyer is quick to mention that these are all uncharted territory. Most cities are not in this situation. We can research and explore these ideas further, but there’s not much in the way of precedents.
Council also discusses:
- Capping security deposits so they don’t get exploitative
- Publishing a list of complexes and grade them, based on complaints to Code Compliance
- Making a central complaint spot, where tenants can then get directed to one of the legal aid resources or code compliance, or whatever
- Requiring three months notice before forcing someone to move, or forcing companies to give choices (break your lease, stay, or move to this other unit)
Finally, Texas State is trying to do some stuff too.
Council decides that they want to look into all these ideas. This will come back around!
The San Marxist 