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UNITED STATES DISTRICT COURT


WESTERN DISTRICT OF TEXAS
AUSTIN APARTMENT
ASSOCIATION
VS.
CITY OF AUSTIN

Case No. 1:14-cv-1146

AUSTIN APARTMENT ASSOCIATIONS


MOTION FOR INJUNCTION PENDING APPEAL
Under Rule 8(a)(1) of the Federal Rules of Appellate Procedure, the Austin
Apartment Association (Association) seeks an immediate injunction, pending
appeal, enjoining the City of Austin (City) from enforcing City of Austin
Ordinance No. 20141211-059, which amends Austin City Code 5-1 (Ordinance)
(enacted December 11, 2014). 1 If the Court does not enjoin the Ordinance, Austin
property owners will suffer imminent economic harm and risk and uncertainty in
the rent of their property.
The challenged ordinance went into effect January 12, 2015, but was stayed
when this Court temporarily restrained the City from enforcing the Ordinance. Last
Friday, February 27, 2015, the restraining order was lifted when this Court denied
the Associations request for a preliminary injunction. 2 Simultaneously with filing
1

The Austin City Codes fair housing ordinance can be found at


https://www.municode.com/library/tx/austin/codes/code_of_ordinances?nodeId=TIT5CIRI_CH5
-1HODI_ART1GEPR.
2
See Appendix A (District courts order).

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this motion for injunction pending appeal, the Association files a notice of appeal.
The Association requests that the Court rule on this motion as soon as practicable
so that, in the event the Court denies this motion, the Association can quickly seek
relief in the court of appeals.
INTRODUCTION
As the Court is aware, this lawsuit challenges the validity and enforceability
of an Ordinance compelling Austin property owners to accept tenants who hold
government-issued housing vouchers, requiring these owners to enter into
contracts with the government, accept government-mandated lease terms, and be
subject to burdensome administrative requirements. The federal Fair Housing Act
provides that it shall be unlawful to represent that a dwelling is not available for
inspection, sale, or rental when such dwelling is in fact so available, based on an
applicants status in a number of constitutionally protected classesrace, color,
religion, sex, handicap, familial status, and national origin. See 42 U.S.C.
3604(d). The Texas Fair Housing Act includes the same protected classes. TEX.
PROP. CODE 301.021.
On December 11, 2014, the City passed the Ordinance amending the Citys
fair housing code to make it more restrictive than under either of these laws. The
Ordinance prohibits Austin property owners from refusing to rent to prospective
tenants on the basis of source of income, which is defined to include housing

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vouchers and other subsidies provided by government or non-governmental


entities. See Austin City Code 5-1-13(24); 5-1-51. The Ordinance recognizes
that even though federal law protects individuals against discrimination in
housing based on race, color, sex, religion, disability, familiar status or national
origin, it is the policy of the City to also prohibit discrimination based on a
number of additional classificationsnow including source of income. See id.
5-1-2(B).
Though framed as simply prohibiting discrimination against those who hold
housing vouchers, the Ordinance does much more than that. The Ordinance
effectively forces property owners to contract with the government and accept
vouchers in lieu of rent payments under the Housing Choice Voucher Program
(Section 8 Program). See 42 U.S.C. 1437f. Under federal law, the Section 8
program is voluntary. Yet under the Ordinance, participation in the Section 8
program is now mandatory for Austin property owners.
Forcing Austin property owners to involuntarily participate in the Section 8
program will have several immediate impacts if the Ordinance is not enjoined
pending appeal. First, to participate in the program, property owners are required to
enter into a Housing Assistance Payment (HAP) Contract with HUD. 3 Thus, all
Austin property owners subject to the ordinance will be required to contract with

See Appendix B (HAP contract).

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the federal government. Because Section 8 is a historically troubled and


controversial program, many property owners rightfully choose not to participate
in the program.
Second, by forcing participation in the Section 8 program, the City is also
requiring involuntary subjection to a complicated administrative labyrinth. The
Housing Choice Voucher Program Administrative Plan covers nearly 400 pages.4
Unless the Ordinance is enjoined pending appeal, property owners will now have
to immediately become equipped to operate their properties under the Section 8
program. The Ordinance will impose substantial legal and administrative
compliance costs.
Third, nearly 90 percent of Austin rentals are under standard and generally
accepted contract terms based on the Texas Apartment Association Lease.5 But for
those participating in the Section 8 program, their leases must instead comply with
significantly different and one-sided government-mandated HAP contract terms.6
The Section 8 requirements and administrative procedures will immediately
impose costs, vacancies, and delays, which add risk and uncertainty for property
owners and will have a material negative economic impact. The Ordinance will
widely govern any Austin property owner who owns a single unit (including a
4

The Housing Choice Voucher Program Guidebook is available at http://portal.hud.gov/


hudportal/ HUD?src=/program_offices/public_indian_housing/programs/hcv/forms/guidebook.
5
See Appendix C (Texas Apartment Association lease).
6
See Appendix D (Section 8 Lease Addendum).

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rental house or duplex) and uses the services of a realtor or a property manager
who owns more than three rental units and. See Austin City Code 5-1-14.
Because the Ordinance has now gone into effect and property owners must
imminently begin entering contracts with the government and are subject to
enforcement actions, the Association requests that the Court grant the
Associations request for injunctive relief pending appeal.
BACKGROUND
On December 11, 2014, the City passed the Ordinance, which requires
Austin property owners to participate in the Section 8 program. Some of the
significant contractually-required distinctions between operating a property that
participates in the Section 8 program and one that does not are:
1.

Pre-approval from Housing Authority:


Under a TAA Lease, the resident and property owner can determine the
terms of the lease, including the amount of rent and length of the lease. 7
But:
After reaching agreement with a prospective housing voucher resident on
material terms of the lease, a property owner must submit a Request for
Tenancy Packet to the Housing Authority. The Housing Authority must
approve all rents requested. The initial lease term must be for one year
unless the Housing Authority approves an exception.8

See TAA lease.


Housing Authority Steps to Participate in Program, 4, 6,
http://www.hacanet.org/HCV/participate.php; HAP Contract, p. 1, 5, p. 5, 6.

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available

at

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2.

Delay for government inspection and contract processing:


Under a TAA Lease, a potential resident can inspect a unit at the time of the
lease application, and then the resident rents the unit as is. The resident
can move in immediately. 9
But:
A housing voucher resident cannot move in (and no rent will be paid) until
after the Housing Authority schedules an inspection and approves the unit.10
The additional inspection, alone, is advertised as should be completed
within five to seven business days. 11 Only after a unit passes inspection
does the Housing Authority begin processing the contract, calculating the
rent subsidy, and preparing the HAP Contract. The Housing Authority
advertises this will take an average of five to ten days. 12

3.

Mandated government contract and rental least terms:


Under a TAA Lease, the property owner has no obligation to contract with
any government agency or incorporate its mandated lease terms. 13
But:
Under the housing voucher program, Housing Assistance Payments will not
begin until the Housing Assistance Payment Contract is signed. 14 The HAP
Contract is a 12-page HUD form contract between the Housing Authority
and the property owner. HAP Contract. The HAP Contract mandates that
while the property owner and resident can use the standard TAA Lease, the
lease must also include word-for-word all provisions of the tenancy
addendum required by HUD. 15 The HUD tenancy addendum provides that
if there is any conflict between the tenancy addendum and any other
provisions of the lease, the language of the tenancy addendum shall
control. 16

TAA Lease, 16, 25.


Steps to Participate in Program, 6; HAP Contract, p. 4, 3.
11
Steps to Participate in Program, 6.
12
Steps to Participate in Program, 7.
13
TAA Lease.
14
Steps to Participate in Program, 7.
15
HAP Contract, p. 4, 2
16
HAP Contract, p. 9, 2(b).
10

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4.

Delay in receipt of rent:


Under a TAA Lease, rent is due in advance (the first months rent is due
when the lease begins). 17
But:
Under the housing voucher program, the first months rent is not paid in
advance. The Housing Authority advertises that the owner can expect to
receive the first months rent 30 to 45 days after the unit passes
inspection.18

5.

No timely rent obligation:


Under a TAA Lease, it is a lease violation if rent is not paid when due.19
But:
The HUD tenancy addendum provides that the Housing Authoritys failure
to timely pay housing assistance payments is not a violation of the lease. 20

6.

No late fee responsibility absent HUD approval:


Under a TAA Lease, if any rent is not paid on time, late charges will be
assessed. 21
But:
Under the housing voucher program, HUD determines whether the Housing
Authority will pay any late charges. 22

7.

Housing Authoritys and residents release from rent obligations:


The TAA Lease does not terminate at the end of the lease term unless the
resident has given the property owner advance written notice of his intent to
move out; if no notice is given, the lease renews on a month-to-month basis.

17

TAA Lease, 14.


Steps to Participate in Program, 8.
19
TAA Lease, 32.
20
HAP Contract, p. 9, 5(d).
21
TAA Lease, 6.
22
HAP Contract, p. 5, 7(a)(3).
18

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A resident cannot move out during the term of the lease and, if he does so,
he remains responsible for all remaining unpaid rent. 23
But:
Under the housing voucher program, the Housing Authority will terminate
rental payments whenever a resident moves out, even if the resident moves
out during the lease term (in violation of the lease). 24
8.

Housing Authoritys ability to unilaterally terminate lease:


Under a TAA Lease, a resident must pay the rent obligations throughout the
term of the lease. The resident remains liable for all rent even if he moves
out early. 25
But:
Under the housing voucher program, the HAP Contract terminates if the
resident moves out or if the Housing Authority terminates assistance to the
family, determines the unit is not large enough due to changes in the
familys circumstances, or determines its available program funding is not
sufficient. [I]f the HAP Contract terminates for any reason, the lease
terminates automatically, releasing the resident of any further rental
obligation. 26
The Ordinance was scheduled to go into effect January 12, 2015. The

Association filed suit the day after the Ordinance was enacted challenging its
validity under the Texas Declaratory Judgment Act. The Associations original
petition for declaratory and injunctive relieffiled in state courtalleged that the
ordinance is preempted by state law, is preempted by federal law, and violates the

23

TAA Lease, 3, 32, 37.


HAP Contract, p. 5, 7(a)(4).
25
TAA Lease, 22.
26
HAP Contract, pp. 4-5, 5, p. 11, 9.
24

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Texas and United States Constitutions. On the eve of the state court temporary
injunction hearing, the City removed the case to federal court.
This Court initially granted a temporary restraining order restraining the City
from enforcing the ordinance. But late Friday afternoon, February 27, 2015, the
Court denied the Associations request for a preliminary injunction. As such,
effective last Friday, the Ordinance is in effect and property owners are subject to
its enforcement.
REASONS FOR GRANTING THE RELIEF REQUESTED
I.

Standards for granting injunctive relief pending appeal under


Federal Rule of Appellate Procedure 8(a).
In deciding whether to issue an injunction pending appeal, the Court should

consider: (1) whether the movant has shown a likelihood of success on the merits;
(2) whether the movant has shown irreparable injury if the injunction is not
granted; (3) whether granting the injunction would substantially harm the other
parties; and (4) whether granting the injunction would serve the public interest. In
re Deepwater Horizon, 732 F.3d 326, 345 n.13 (5th Cir. 2013). [A] grant of
injunctive relief pending appeal does not depend solely or even primarily on a
consideration of the merits; it may be granted to ensure maintenance of the status
quo. LaRouche v. Kezer, 20 F.3d 68, 72 (2d Cir. 1994) (internal quotes omitted).
Alternatively, when a serious legal question is presented, an injunction is
appropriate if the movant presents a substantial case on the merits and shows the

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balance of equities weighs heavily in favor of an injunction. Weingarten Realty


Investors v. Miller, 661 F.3d 904, 910 (5th Cir. 2011); Ruiz v. Estelle, 650 F.2d
555, 565 (5th Cir. 1981). In the absence of an injunction, Austin property owners
will be forced to accept government-imposed lease terms that will cause these
property owners substantial economic harm. Either of these tests supports an
injunction pending appeal in this case.
II.

The Association is entitled to injunctive relief under the four-factor


test.
A. The Association is likely to succeed on the merits.
The Association has a substantial likelihood of prevailing on the merits.

While home-rule cities possess broad powers of self-government, there are limits
to that power. A city ordinance that attempts to regulate a subject matter preempted
by a state statute is unenforceable to the extent it conflicts with the state statute.
Dallas Merchants and Concessionaires Assn v. City of Dallas, 852 S.W.2d 489,
491 (Tex. 1993). Likewise, an ordinance that attempts to regulate a subject matter
preempted by federal law is unenforceable to the extent it conflicts with the federal
statute. Cardinal Towing & Auto Repair, Inc. v. City of Bedford, Tex., 180 F.3d
686, 690 (5th Cir. 1999). And an ordinance is unenforceable if it violates the Texas
or United States Constitutions. Dallas Merchants and Concessionaires Assn,
852 S.W.2d at 491-92; Cardinal Towing & Auto Repair, 180 F.3d at 690. The
ordinance is invalid and thus unenforceable because it (1) is preempted by state

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law, (2) is preempted by federal law, and (3) violates the Texas and United States
Constitutions.
1.

The ordinance is preempted by state law.

First, the ordinance is preempted by Texas Local Government Code, Section


214.903. In 1991, the legislature enacted Section 214.903, which authorizes Texas
cities to adopt fair housing ordinances substantially equivalent to those granted
under federal law, but restricting cities from adopting more intrusive ordinances.
It specifically states:
(a) The governing body of a municipality may adopt fair housing
ordinances that provide fair housing rights, compliance duties, and
remedies that are substantially equivalent to those granted under
federal law. Enforcement procedures and remedies in fair housing
ordinances may vary from state or federal fair housing law.
(b) Fair housing ordinances that were in existence on January 1, 1991,
and are more restrictive than federal fair housing law shall remain in
effect.
TEX. LOC. GOVT CODE 214.903.
As relevant here, the federal Fair Housing Act provides that it shall be
unlawful to represent that a dwelling is not available for inspection, sale, or rental
when such dwelling is in fact so available, based on an applicants status in a
number of constitutionally protected classesrace, color, religion, sex, handicap,
familial status, and national origin. See 42 U.S.C. 3604. The Texas Fair
Housing Act includes the same protected classes. TEX. PROP. CODE 301.021.

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That statute grants Texas cities the authority to adopt fair housing ordinances
that are substantially equivalent to those granted under federal law, but restricts
cities from adopting a substantively different ordinance. Specifically:

The first sentence of Subsection (a) allows municipalities to adopt fair


housing ordinances that provide fair housing rights (i.e. protected
classes), compliance duties, and remedies that are substantially
equivalent to those granted under federal law.

But the second sentence of Subsection (a) expressly limits variation


from federal fair housing laws to enforcement procedures and
remedies.

Further, Subsection (b) only permits a citys more restrictive


ordinance if it was in effect before January 1, 1991.

Thus, after January 1, 1991, municipalities may deviate from the federal fair
housing laws only as to procedure and remedies, but may not establish a different
protected class.
Because the Citys ordinance is not substantially equivalent to federal law,
but instead attempts to add a new protected class, it is preempted by Section
214.903. The federal Fair Housing Act prohibits discrimination based on ones
identityan applicants race, color, religion, sex, handicap, familial status, and
national origin. It does not prohibit discrimination based on income. See 42
U.S.C. 3604. Instead, at the federal level, participation in the Section 8 program
was intended to be and always has been voluntary. See Salute v. Stratford Greens

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Garden Apartments, 136 F.3d 293, 296 (2d Cir. 1998); Franklin Tower One,
L.L.C. v. N.M., 725 A.2d 1104, 1113 (N.J. 1999).
The new source of income protected class is significantly different, and
imposes a different burden, than the protected classes under federal and state law.
Race, color, religion, sex, handicap, familiar status, and national origin are all
constitutionally protected classes pertaining to ones identity. But preventing
discrimination on those bases does not require property owners to contract with the
government, participate in a complicated government bureaucracy, accept
government-imposed lease terms, or take on economic burdens.
In contrast, the Citys ordinance forces involuntary participation in the
Section 8 program and requires acceptance of government-mandated lease terms.
And the significant administrative burdens imposed on property owners who
participate in the Section 8 program invariably drive up costs and increase
vacancies, through additional complicated legal guidelines, regulatory inspections,
payment delays, different thresholds for evicting residents, and the governments
ability to terminate a Section 8 lease with no penalty, all of which cause economic
risk for property owners. The state preemption question is one of first impression
and may warrant a certified question to the Texas Supreme Court. The Association
requests that the ordinance be enjoined during the pendency of this appeal.

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2.

The ordinance is preempted by federal law.

Second, because the Citys ordinance makes participation in the federal


Section 8 program mandatory, it is also preempted by federal law. The federal lowincome housing assistance statute, 42 U.S.C. 1437f, sets out the comprehensive
regulatory scheme governing the Section 8 program. And the statute provides that
a property owners participation in the program is voluntary. Consequently, a
property owner need only accept federal regulatory control if the property owner
chooses to accept rental vouchers. See, e.g., 42 U.S.C. 1437f(d)(1)(A); see also
24 C.F.R. 982.452(b)(1). The Citys ordinance conflicts with this statutory
scheme by requiring Austin property owners to accept government vouchers and,
as a result, accept federal government regulatory control. As such, conflict
preemption applies because the Ordinance frustrates a purpose of the Section 8
program. See Crosby v. Natl Foreign Trade Council, 530 U.S. 363, 372-73
(2000); Jenna Bernstein, Section 8, Source of Income Discrimination, and Federal
Preemption: Setting the Record Straight, 31-4 CARDOZO L. REV. 1407 (2010).
Numerous courts have refused to force property owners to involuntarily
participate in the voluntary Section 8 program or have suggested legal problems
with forcing participation, recognizing that property owners have legitimate
business reasons for refusing to participate in the program:

In Salute, the Second Circuit held: We think that the voluntariness


provision of Section 8 reflects a congressional intent that the burdens

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of Section 8 participation are substantial enough that participation


should not be forced on landlords. 136 F.3d at 300 (emphasis
added). The burden of participating in the Section 8 program cannot
be viewed as imposing only reasonable costs or insubstantial
burdens[.] Id. at 301. To the contrary, it is easy to conclude that, for
landlords who reject voluntary Section 8 participation, the contract
with the federal government, the retention of counsel to make the
Section 8 arrangements, the requirements for compliance, and the
limitations on use (actual and potential), are unreasonable costs, an
undue hardship, and a substantial burden. Id.

In Knapp v. Eagle Property Management Corp., the Seventh Circuit


noted that [i]t seems questionable to allow a state to make a
voluntary federal program mandatory. 54 F.3d 1272, 1282 (7th Cir.
1995) (emphasis added). The court considered whether a state statute
that prohibits property owners from discriminating on the basis of
lawful source of income required owners to accept Section 8
vouchers. The court held that it does not. A statute requiring
acceptance of Section 8 vouchers would only be enforceable if either:
(1) the state could accept non-participation in the program as a
legitimate reason for the owners action [declining to rent], thereby
relieving him of liability or (2) the requirement to rent to a tenant
with a voucher could apply only to an owner participating in the
program, because only such owners could receive housing subsidies
without being forced to enter a voluntary program. Id. at 1282-83.

In Dussault v. RRE Coach Lantern Holdings, LLC, Maines high court


considered a statute that prohibited property owners from refus[ing]
to rent or impos[ing] different terms of tenancy to any individual who
is a recipient of federal, state or local public assistance. 86 A.3d 52,
58 (Me. 2014). The court held that the statute did not force property
owners to participate in the Section 8 program or to accept terms of
tenancy that are otherwise required only if the landlord chooses to
participate in a voluntary federal program. Id. at 60.

In Edwards v. Hopkins Plaza Ltd. Partnership, the Minnesota court of


appeals held that [b]ecause federal law does not require property
owners to participate in Section 8 housing programs and because
Minnesota law does not require such participation, continued
participation in the program by a property owner is also voluntary. To

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conclude otherwise would be to force property owners to continue to


participate indefinitely in a voluntary program against their will. 783
N.W.2d 171, 179 (Minn. Ct. App. 2010).
Because the Citys ordinance attempts to make participation in the Section 8
program mandatory, it contravenes 42 U.S.C. 1437f and should be declared
invalid and thus unenforceable.
3.

The Ordinance violates the contract clause in the Texas


Constitution.

Third, the ordinance is contrary to Article I, Section 16 of the Texas


Constitution. Texas courts have held that the right to freedom of contract is a
fundamental right. The right to enter into lawful contracts is one of the guaranties
of the Texas Constitution. This guaranty is one of the essential liberties of the
citizen, and cannot be nullified by legislative enactment[s]. Travelers Ins. Co. v.
Marshall, 124 Tex. 45, 76 S.W.2d 1007, 1025 (1934); see also St. Louis Ry. Co. of
Tex. v. Griffin, 171 S.W. 703, 704-05 (Tex. 1914). Article I, Section 16 of the
Texas Constitution mandates that No bill of attainder, ex post facto law,
retroactive law, or any law impairing the obligation of contracts, shall be made.
TEX. CONST. art. I, 16 (emphasis added). Citing this provision, the Texas
Supreme Court has repeatedly recognized Texas strong public policy in favor of
preserving the freedom of contract. See, e.g., Fairfield Ins. Co. v. Stephens Martin
Paving, LP, 246 S.W.3d 653 (Tex. 2008). Two related principles are equally
important. The right to contract necessarily implies the right to refuse to

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contract. Hotel & Restaurant Employees Intl Alliance v. Longley, 160 S.W.2d
124, 127 (Tex. Civ. App.Eastland 1942, no writ); see also generally Churchill
Forge, Inc. v. Brown, 61 S.W.3d 368 (Tex. 2001). And [c]ontracts require mutual
assent to be enforceable. Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex.
2007).
The Citys ordinance strips property owners of their freedom to contract (or
not contract) in connection with the property they own. The ordinance requires
property owners to participate in the Section 8 program and owners cannot
participate in that program without signing a HAP Contract with HUD. Thus,
owners are forced to contract with the federal government, whether they want to or
not. The ordinance therefore violates Texas Constitution, Article I, Section 16.27
B. The Association will suffer irreparable harm without injunctive
relief.
The Association will be irreparably injured without an injunction during its
appeal. There is a substantial threat the Associations property owner members will
suffer irreparable injury if the Ordinance and its enforcement are not enjoined.
Harm is imminent because the challenged ordinance went into effect January 12,
27

The Ordinance also violates the due process and takings clauses of the United States and Texas
Constitutions. The Ordinance burdens property and contract rights in such a substantial manner
as to constitute a taking of property and a violation of substantive due process rights. See, e.g.,
Penn. Coal Co. v. Mahon, 260 U.S. 393, 415-16 (1922); Westgate, Ltd. v. State, 843 S.W.2d 448,
452 (Tex. 1992); Noell v. City of Carrollton, 431 S.W.3d 682, 695 (Tex. App.Dallas 2014, pet.
denied); Andrada v. City of San Antonio, 555 S.W.2d 488, 491 (Tex. App.San Antonio 1977,
writ dismd). The Association will brief this issue further in its Appellants Brief.

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2015, was temporarily restrained, but is no longer stayed because of this Courts
denial of the Associations request for a preliminary injunction. The City can now
immediately begin enforcement of the Ordinance.
Preparing for the Section 8 program requires property owners to make
material commitments of time and expenses, such as for legal advice, training, and
coordination with housing authority officials. Further, beginning immediately,
property owners will be required to start contracting with the government and
begin leasing to Section 8 residents on one-sided government-mandated lease
terms. Those long-term contracts will cause economic harm during this appeal and
cannot readily be undone after the conclusion of the litigation. Further, the harm
that will result is irreparable because damages are not readily ascertainable or
easily calculated. The Association does not seek damages but instead seeks to
enforce property owners rights to decline, for business reasons, to participate in
the federal Section 8 program. Without injunctive relief, the Associations
members and other property owners will be required to immediately comply with
the Ordinance that contravenes both state and federal law.
C. An injunction pending appeal will not cause the City or
Intervenors substantial harm.
Any potential harm to the City from an injunction pending appeal is
insignificant by comparison. The threatened injury to the Associations members
and other property owners outweighs any threatened harm the injunction may

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cause the City. The Association is not aware of any harm that will result to the City
if the enactment of the ordinance is delayed pending appeal. For other ordinances,
such as the recent texting-while-driving ban, the City has agreed to delay
enforcement for six months after passage. Further, the evidence at the temporary
injunction hearing was undisputed that there are significantly more rental units
available to Section 8 voucher holders than there are voucher holders. Thus,
current voucher holders will not be foreclosed from renting units during the
pendency of this appeal.
D. The public interest favors an injunction.
The public interest would also be served by the injunction pending appeal
because property and contract rights will remain protected. Conversely, enjoining
the enforcement of the ordinance during this appeal will not disserve the public
interest. Local fair housing officials have stated that the vast majority of the
Section 8 residents who seek housing in Austin are generally able to find housing
from property owners who voluntarily participate in the Section 8 program. The
City has also failed to explore opportunities to increase voluntary participation in
the program.
III.

The Association is entitled to injunctive relief pending appeal based


on the alternative test.
In addition to satisfying the four-factor test, the Association also meets the

alternative test for injunctive relief pending appeal because this case involves a

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serious legal question. See Ruiz, 650 F.2d at 565. When a serious legal
question is presented, an injunction is appropriate if the movant presents a
substantial case on the merits and shows the balance of equities weighs heavily in
favor of an injunction. Weingarten Realty Investors v. Miller, 661 F.3d 904, 910
(5th Cir. 2011); Ruiz v. Estelle, 650 F.2d 555, 565 (5th Cir. 1981). Whether or not
the Ordinance is valid and enforceable has serious legal implications not just to the
Associations members, but to all Austin property owners. Further, as previously
explained, this case presents questions of first impression for this Court, the answer
to which could impact property owners throughout the country. While two federal
appellate courts have suggested such ordinances may be legally invalid, this Court
will be the federal appellate court to address this issue directly.
An injunction pending appeal is also warranted because the existence of
irreparable harm and balance of the equities, as discussed above, favor the
Association.
PRAYER
For these reasons, the Austin Apartment Association seeks an injunction,
pending appeal, enjoining the City of Austin from enforcing City of Austin
Ordinance No. 20141211-059, which amends Austin City Code 5-1 (enacted
December 11, 2014). The Association further requests any other relief to which it
may be entitled.

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Respectfully submitted,

By: /s/ Craig T. Enoch


Craig T. Enoch (SBN 00000026)
cenoch@enochkever.com
Melissa A. Lorber (SBN 24032969)
mlorber@enochkever.com
ENOCH KEVER PLLC
600 Congress Avenue
Suite 2800
Austin, Texas 78701
Phone: (512) 615-1200
Fax: (512) 615-1198
ATTORNEYS FOR PLAINTIFF
AUSTIN APARTMENT ASSOCIATION

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CERTIFICATE OF CONFERENCE
The undersigned counsel for Appellant attempted, but was unable, to confer
with counsel for Defendant and Intervenors regarding the relief sought in this
Motion. Though Plaintiffs counsel was unable to confer, it is anticipated that
counsel for Defendant and Intervenors will oppose the relief sought in this motion.

By:

/s/ Craig T. Enoch


Craig T. Enoch

CERTIFICATE OF SERVICE
I certify that on March 2, 2015 a true and correct copy of the foregoing was
served in a manner prescribed by the Federal Rules of Appellate Procedure to:

Meitra Farhadi
Assistant City Attorney
301 W. 2nd Street
P.O Box 1546
Austin, Texas 78767-1546
meitra.farhadi@austintexas.gov
Fred Fuchs
Texas Rio Grande Legal AID
4920 North IH-35
Austin, Texas 78751
ffuchs@trla.org

By:

/s/ Craig T. Enoch


Craig T. Enoch

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APPENDIX
A.

Courts February 27, 2015 Order denying Plaintiffs request for


preliminary injunction

B.

HUD Housing Assistance Payment (HAP) Contract

C.

Texas Apartment Association Lease

D.

Section 8 Lease Addendum

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IN THE UNITED STATES DISTRICT COURT

p
FOR THE WESTERN DISTRICT OF TEXA5 FEB 27
AUSTIN DIVISION

L: 06

AUSTIN APARTMENT ASSOCIATION,


Plaintiff,
-vs-

Case No. A-14-CA-1146-SS

CITY OF AUSTIN,
Defendant.

ORDER
BE IT REMEMBERED on the 26th day of January 2015, the Court held a hearing in the

above-styled cause, and the parties appeared by and through counsel. Before the Court are Plaintiff

Austin Apartment Association's Motion for Preliminary Injunction [#4], Defendant City ofAustin's
Response [#8] thereto, Intervenors Doris Landrum, Dimple Smith, Gloria Middleton, and Latorie

Duncan's Response [#7] thereto, Plaintiff's Trial Brief on Legal Authorities and Comparing
Ordinance-Mandated and Free-Market Lease Terms [#11], Defendant's Response [#15] thereto, and

Intervenors' Response [#14] thereto. Having reviewed the documents, the arguments of the parties
at hearing, the governing law, and the file as a whole, the Court now enters the following opinion

and orders.

Background
On December 11, 2014, the City Council of the City of Austin, Texas, enacted Ordinance

Number 20141211-050 (the Ordinance). The Ordinance amends the City's fair housing code to

prohibit landlords from refusing to rent to prospective tenants on the basis of "source of income,"
which is defined to include "housing vouchers and other subsidies provided by government or non-

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governmental entities." Prelim. Inj. Hrg. Ex. P-8 (the Ordinance) at 2. Consequently, under the
Ordinance, where a person is otherwise qualified to rent a property, the landlord may not reject that

person's application solely because he or she wishes to pay a portion of the rent with a voucher
obtained through the federal Housing Choice Voucher Program (HCVP or the Program), formerly
known as Section 8.

Plaintiff Austin Apartment Association (the Association), a trade association whose members
control rental properties serving over 192,000 households, claims the Ordinance is invalid and seeks
a preliminary injunction against its enforcement pending resolution of this action. Specifically, the

Association argues the Ordinance is preempted by Texas and federal law, impairs the obligation of
contracts in violation of the Texas Constitution, and constitutes a regulatory taking and due process

violation under the Texas and United States Constitutions. As set forth below, the Court finds the
Association has failed to demonstrate a substantial likelihood of success on the merits of its claims,
and therefore DENIES the motion for preliminary injunction.
A.

The Housing Choice Voucher Program


Congress created the Housing Choice Voucher Program to "aidE] low-income families in

obtaining a decent place to live" and to "promot[e] economically mixed housing." 42 U.S.C.

1437f(a). The Program is funded by the United States Department of Housing and Urban

Development (HUD) and administered by state and local public housing authorities (PHAs) in
accord with the regulations promulgated by HUD. Families (or individuals) who wish to receive

housing vouchers must apply with their local PHA, which is responsible for screening prospective
participants for federal eligibility, issuing vouchers, and contracting with landlords who lease to
HCVP participants.

See Prelim. Inj.

Hrg. Ex. P-12 (HCVP Guidebook) at 1-12.

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Once a family is approved by and receives a voucher from the PHAa process that may take
years, as demand for vouchers far outstrips supply and waiting lists are very

longthe family is

responsible for finding a landlord in the private rental market willing to lease to them.

See 24 C.F.R.

982.3 02(a). Federal law does not require landlords to accept housing vouchers, and landlords who

do accept vouchers are not required to approve tenants merely because they are voucher holders.

Rather, landlords who participate in the Program may screen prospective tenants and reject them if

screening reveals red flags in terms of paying rent and utility bills, caring for rental housing,
respecting neighbors, criminal activity, and the like.

See

24 C.F.R.

982.307(a) (discussing

landlord's obligation to screen prospective tenants and factors properly considered in so doing).
Once the family has located a willing landlord and the family and landlord have negotiated

the terms of the lease, the PHA must also approve the prospective tenancy. The landlord and family
fill out and submit to the PHA a two-page Request for Tenancy Approval, which provides the PHA

with basic information such as the address and size of the unit to be rented and the utilities and
appliances provided by the landlord versus paid for by the tenant.

(Request for Tenancy Approval) at

1.

See

Prelim. Inj. Hrg. Ex. P-2

The Request for Tenancy Approval also requires landlords

who rent more than four units to disclose the rent charged for comparable units, so the PHA can

ensure the rent charged to the voucher holder is comparable to that charged to unassisted tenants.
Id.

at2.
The portion of the rent paid by the government is pegged to the PHA's schedule of "payment

standards," dollar amounts based on the local fair market rent for apartments or houses of a certain
size. HCVP Guidebook at 7-1. The PHA will never pay more than its fixed share, equal to the

applicable payment standard less the dollar amount for which the voucher holder is responsible. Id.

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at 6-2. Typically, a family must pay thirty percent of its monthly adjusted income toward rent. Id.
at 6-1; see 42 U.S.C.

143 7f(o)(2)(A).

If a family wants to rent a unit which costs more than thirty

percent of its monthly adjusted income plus the PHA's fixed share, the family may do so and pay
the additional costbut the amount paid by the family may never exceed forty percent of its monthly
adjusted income.

42 U.S.C.

1437f(o)(3);

see

HCVP Guidebook at 6-2.

If the family's

responsibility would exceed forty percent of its monthly adjusted income, the family may not rent
that unit. HCVP Guidebook at 6-2.

If the PHA approves the tenancy, an inspection of the house or apartment to be leased to the
family is scheduled. The inspection ensures the unit passes basic federal housing quality standards
(HQS) geared toward ensuring tenant health and safety; for example, the property must have "a
shower or bathtub with hot and cold running water," lockable exterior doors, "a safe heating system,"

permanently installed electrical outlets, and the like.

See

Prelim. Inj. Hrg. Ex. P-3 (HQS Checklist)

at 5-7. All utilities must be turned on prior to the inspection. Id. at 9. According to the HQS

Checklist, some of the most common reasons a unit fails inspection include broken smoke detectors,

missing or cracked electrical outlet covers, peeling paint, trip hazards from carpet or other permanent
floor coverings, cracked windowpanes, and inoperable stove burners. Id. at 4. If a property fails
inspection, the landlord is required to make any needed repairs and notify the PHA when the

property is ready for re-inspection.


Once the unit has passed inspection, the landlord and the PHA must execute the HUDprepared Housing Assistance Payments Contract.

See

Prelim. Inj. Hrg. Ex. P-4 (HAP Contract).

Execution of the HAP Contract is required by HUD, and without an executed HAP Contract
covering a particular family's tenancy, the PHA will not pay any rent to the landlord.

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at 4

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("During the HAP contract term, the PHA will pay housing assistance payments to the owner[.]").
The landlord cannot modify or negotiate the HAP Contract; it "must be word-for-word in the form

prescribed by HUD." Id. at

Further, the landlord must append a Tenancy Addendum to the

1.

landlord-tenant lease agreement, which controls in the event the two conflict. Prelim. Inj. Hrg. Ex.
P-5 (Tenancy Addendum) at

1(b).

Under the HAP Contract, the PHA's responsibility to pay rent terminates automati cally under
a number of circumstances, including if the tenant terminates the lease, moves out of the unit, or is

dropped from HCVP, or if the PHA determines there is not enough funding to continue the Program.
See

HAP Contract at 4

4(b)( 1 )(6) (detailing situations in which the HAP Contract automatically

terminates). The PHA has discretion to terminate payments if the family leasing the property breaks
up, "if the PHA determines that the [property] does not provide adequate space.

. .

because of an

increase in family size or a change in family composition," or if the landlord violates the HAP
Contract. Id. at 5

4(b)(7)(9). Additionally, the HAP Contract governs the timing of payment of

rent. Although the PHA "must pay housing assistance payments promptly when due," it will only

be obligated to pay late fees for tardy payments if (1) charging late fees is general practice in the
community, (2) charging late fees is the landlord's general practice, and (3) the landlord also charges
the leasing family late fees. Id. at

7(a). Additionally, the PHA is not required to pay late fees,

even where those three conditions are met, "if HUD determines that late payment by the PHA is due
to factors beyond the PHA's control." Id. at 5

7(a)(3). Late payment of rent by the PHA is not a

violation of the lease, and the landlord cannot terminate a tenancy because the PHA fails to pay its
share. Id. at 9

5(d).

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B.

Procedural History
On December 12, 2014, the Association filed suit in the 345th Judicial District Court of

Travis County, Texas, seeking a declaration the Ordinance is invalid, a temporary restraining order,
and preliminary and permanent injunctive relief. See Notice Removal [#1-3] at 2 (Orig. Pet.). The

City removed to this Court on December 31, 2014, invoking federal question jurisdiction. Id. [#1]

1. Intervenors Latorie Duncan, Doris Landrum, Gloria Middleton, and Dimple Smith, all current
HCVP voucher holders, filed a Plea in Intervention prior to removal and then a Motion to Intervene

in this Court, seeking to intervene in support of the City. See Mot. Intervene [#12]. The Court
granted the motion on January 23, 2015. See Order of Jan. 23, 2015 [#18].
The Association filed the instant "Emergency Motion for Temporary Restraining Order
[TRO] and, Thereafter, Motion for Preliminary Injunction" [#4] on January 5, 2015. Following

hearing on the motion, the Court granted the TRO and held the motion for preliminary injunction
in abeyance pending further development of the record and a second hearing. See Order of Jan. 6,
2015 [#10]. During the second hearing, which took place on January 26, 2015, the Court heard

testimony from witnesses, received exhibits, and entertained argument on the motion.

Analysis
I.

Legal Standard
A party seeking a preliminary injunction must satisfy each of four criteria: (1) a substantial

likelihood of success on the merits, (2) a substantial threat of irreparable injury if the injunction is

not granted, (3) the substantial injury outweighs the threatened harm to the party against whom the
injunction is sought, and (4) granting the injunction will not disserve the public interest. Planned

Parenthood Ass'n of Hidalgo Cnty., Tex., Inc.

v.

Suehs, 692 F.3d 343, 348 (5th Cir. 2012). "[A]

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preliminary injunction is an extraordinary remedy which should not be granted unless the party
seeking it has clearly carried the burden of persuasion on all four requirements." Id. (quoting Tex.
Med. Providers Performing Abortion Servs. v. Lakey, 667 F.3d 570, 574 (5th Cir. 2012)).

II.

Application
The Association argues the Ordinance is invalid for four reasons: first, it is preempted by

state law; second, it is preempted by the federal Fair Housing Act; third, it unconstitutionally burdens
the freedom to contract guaranteed by Article

1, 16

ofthe Texas Constitution, which prohibits laws

impairing the obligation of contracts; and fourth, it constitutes a regulatory taking and due process
violation under both the Texas and United States Constitutions. The Association fails to demonstrate
a substantial likelihood of success on the merits under any of its theories.
A.

State Preemption
The Association first argues the Ordinance is preempted by Texas law because it is not

"substantially equivalent" to federal law, as required by 2 14.903 of the Texas Local Government
Code. Section 2 14.903 provides:

The governing body of a municipality may adopt fair housing ordinances that
provide fair housing rights, compliance duties, and remedies that are substantially
equivalent to those granted under federal law. Enforcement procedures and remedies
in fair housing ordinances may vary from state or federal fair housing law.
(a)

Fair housing ordinances that were in existence on January 1, 1991, and are
more restrictive than federal fair housing law shall remain in effect.
(b)

TEx. LocAL Gov'T

CODE 214.903. In the Association's view, 214.903 preempts the Ordinance

because the Ordinance "attempts to add a new protected class" that is different from those protected
under the federal Fair Housing Act. Mot. Prelim. Inj. [#4] at 6-7. The Court is unpersuaded.

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Home-rule cities, like the City of Austin, "have broad discretionary powers" to enact their
own ordinances, "provided that no ordinance 'shall contain any provision inconsistent with the
Constitution of the State, or [with] the general laws enacted by the Legislature of this State." Dali.
Merch. 's & Concessionaire 's Ass 'n v. City ofDaii., 852 5 W.2d 489,490 (Tex. 1993) (quoting TEX.
CONST. art. XI, 5).

Home-rule cities "possess the full power of self-government and look to the

Legislature not for grants of power, but only for limitations on their power." Id. at 490-91 (citing
MJR 's Fare v. City ofDail., 792 S.W.2d 569, 573 (Tex. App.Dallas 1990, writ denied)). A home-

rule city ordinance is unenforceable to the extent it conflicts with a state statute. Id. at 491 (citing
City ofBrookside Viii. v. Comeau, 633 S.W.2d 790, 796 (Tex. 1982)). However, a state statute and

a home-rule city ordinance

"will not be held repugnant

to each other

if any other reasonable

construction leaving both in effect can be reached." Id. (quoting City ofBeaumont v. Fail, 291 S .W.

202,206 (Tex. 1927)). Consequently, if the Texas legislature decides to preempt a subject normally
within a home-rule city's broad powers,

"it must do so with unmistakable clarity."

S.

Crushed

Concrete, LLCv. City ofHous., 398 S.W.3d 676,678 (Tex. 2013) (quotingln re Sanchez, 81 S.W.3d
794, 796 (Tex. 2002)).

The Court finds the Association has failed to demonstrate a likelihood of success on the
merits of its state preemption claim, as nothing in the record suggests

214.903 preempts the

Ordinance with "unmistakable clarity." The Association, without attempting to define "substantially

equivalent," asserts the Ordinance is not substantially equivalent to the federal Fair Housing Act
simply because the federal Fair Housing Act does not include source of income as a protected class.
The Association cites no authority in support of that bold proposition, however, and the Court

declines to embrace it. Construing 214.903 as the Association urges would mean the City has long

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been violating the statute, as the City's fair housing code protects a number of classes ofpersons not
protected by the federal Fair Housing Act. "Substantially," moreover, is defined by the Oxford
English Dictionary as "[i]n all essential characters or feaiures[.]"1 It seems to the Court the salient
"essential features" of the federal Fair Housing Act are the classes of persons it protects. The

Ordinance, in protecting from discrimination all of the classes protected under federal law and then
some, exhibits the essential features of federal fair housing law. Cf 24 C.F.R.

115.204(h) (stating,

in context of making substantial equivalency determination under federal law, if a local law "is

different from the [Fair Housing] Act in a way that does not diminish coverage of the Act, including
the protection of additional prohibited bases, then the

local law may still be found

substantially equivalent.").
That being said, the Court notes it is unsure what to make of the City's argument on this
point. The City claims "substantially equivalent" is a term of art in fair housing law, referring to
HUD '5 federal statutory authority to "certify" a local (or state) PHA, which requires HUD to

determine whether the local (or state) law the PHA administers is "substantially equivalent" to the
federal Fair Housing Act.

See 42

U.S.C. 361 0(f)(3) (explaining HUD may certify an agency if the

fair housing law it administers is substantially equivalent to federal law). Austin's PHA is certified

by HUD; the City therefore concludes "unless and until HUD revokes the City's substantial
equivalency certification, there is no violation of[ 2 14.903]." Def.'s Resp. Mot. Prelim. Inj. [#8]

at6.
To the extent the City is claiming "substantially equivalent" as used in 214.903(a) should

be read coextensively with federal law, two unaddressed problems arise. First, that argument inserts

Substantially, adv., OED

ONLINE, http://www.oed.comlview/Entry/1 93055?redirectedFrom=substantially&.

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the phrase "as detennined byHUD" into 2 14.903(a): "The governing body of a municipality may

adopt fair housing ordinances.. . that are substantially equivalent[, as determined by HUD,]to those
under federal law." Courts are generally not free to read into statutes language that is not there. See,
e.g., Lamie

v.

US. Trustee, 540 U.S. 526, 538 (2004). Second, there appears to be a material

difference between the federal and Texas statutes in employing the concept of substantial
equivalency. Under federal law, HUD may certify a particular local agency only if (1) the rights the
agency protects, (2) the procedures the agency follows, (3) the remedies available to the agency, and
(4) the availability ofjudicial review of the agency's actions under the state or municipal fair housing

law are all substantially equivalent to those created by and under the federal Fair Housing Act. 42
U.S.C.

3610(f)(3)(A). Under

may vary from.

. .

2 14.903,

however, "[e]nforcement procedures and remedies..

federal fair housing law."

TEX. LOCAL GOv'T

CODE

entirely clear to the Court whether or how the variance permitted by

214.903(a). It is not

214.903 squares with the

federal concept of substantial equivalency since, in order to certify a local agency, the federal statute
requires the procedures followed by and remedies available to the local agency be substantially

equivalent to federal fair housing law. Further, even if the Court accepted the City's argument

2 14.903 could not be violated unless HUD revoked the City's substantially-equivalent status, the

City conceded at hearing there was no evidence HUD had reviewed the Ordinance and made that
determination.
The burden of demonstrating a substantial likelihood of success on the merits, however,

belongs to the Association, not to the City. On the present record, the Court concludes the
Association has not carried that burden on the question whether the Ordinance is preempted by

214.903.

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B.

Federal Preemption
The Association next argues the Ordinance is preempted by the federal Fair Housing Act.

Specifically, the Association claims because the Ordinance makes participation in HCVP mandatory

under certain circumstances, it is preempted by the Act, which makes participation in HCVP
voluntary. See 42 U.S.C.

1437f(d)(1)(A) ("[T]he selection of tenants shall be the function of the

owner."). The Court disagrees with the Association.


In determining whether federal law preempts state law, Congressional intent is the paramount

consideration. Cal. Fed. Say. & Loan Ass 'n v. Guerra, 479 U.S. 272, 280 (1987). Preemption may

manifest in several different ways. First, Congress may expressly state a federal law preempts state
law (express preemption). Id. Second, Congress's preemptive intent may be inferred where the

federal scheme is so comprehensive it "occupies the field," leaving no room for supplementary state
law (implied preemption). Id. at 280-81. Finally, and most relevant for present purposes, federal

law may preempt state law to the extent the two actually conflict (conflict preemption), either

because "compliance with both federal and state regulations is a physical impossibility," or because
the state law "stands as an obstacle to the accomplishment and execution of the full purposes and
objectives of Congress." Id. at 281 (internal quotes omitted).

The Association argues conflict preemption applies, and specifically that the Ordinance
"stands as an obstacle to the accomplishment and execution of the full purposes and objectives of

Congress." See Pl.'s Trial Brief [#11] at 3. According to the Association, "[t]he voluntary nature

of the [Program] lies at the heart of the federal law," as evidenced by Congress's two previous
experiments with "mandating property owner participation": the "take one, take all" provision, which

prohibited a landlord from declining to rent to a voucher holder if the landlord had done so in the

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past, and the "endless lease" provision, which prohibited landlords from refusing to renew voucher

holders' leases at the expiration of the initial lease term. See id.; see also Pub. L. No. 105-276,

549, 554, 112 Stat. 2461 (1996) (repealing "take one, take all" and "endless lease" provisions).

The Association notes both provisions were repealed "because of their chilling effect" on landlords'

willingness to participate in the program, given its "burdensome requirements." Id. (citing S. REP.

No. 104-195, at 31-32 (1995)).


To date, the Association's argument has been rejected by every court which has confronted
it. See Bourbeau v. Jonathan Woodner Co., 549 F. Supp. 2d 78, 88-89 (D.D.C. 2008) (finding

prohibiting discrimination against voucher holders will "advance rather than denigrate" Congress's
objectives); Montgomery Cnty.

v.

Glenmont Hills Assocs. Privacy World, 936 A.2d 325, 336 (Md.

2007) ("There is nothing in any of the relevant Federal statutes even to indicate, much less establish,

that voluntary participation by landlords was an important Congressional objective. The only
declared objective is to assist State and local governments in expanding affordable housing for lowincome families

. . .

."); Franklin Tower One, L.L. C. v.

("[T]he voluntary nature of the Section

NM,

725 A.2d 1104, 1113 (N.J. 1999)

program is not at the heart of the federal scheme.");

Comm 'n on Human Rights & Opportunities

v.

Sullivan Assocs., 739 A.2d 238, 246 (Conn. 1999)

("Requiring landlords to extend rental opportunities to otherwise eligible section 8 recipients.. . is


not an obstacle to the congressional agenda but serves instead to advance its remedial purpose.");

Attorney General v. Brown, 511 N.E.2d 1103, 1106 (Mass. 1987) (reasoning helping low-income

families obtain decent housing, not voluntary landlord participation, is at the heart of the federal
scheme).

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The Court can see no reason to swim against the current. The undersigned is of the opinion

Congress's decision to repeal the "take one, take all" and "endless lease" provisions provides no
support for a conflict preemption argument. The provisions in question were repealed in order to
encourage landlords to participate in the voucher program such that more housing would be available
to voucher holders, not to protect landlords from being required to rent to voucher holders.2 See

Franklin Tower One, 725 A.2d at 1113 (concluding repeal of "take one, take all" supports
conclusion Congress's goal "has always been to assist in providing housing to low-income
families"). Further, the Court agrees with the City and the decisions cited above that the purposes
and objectives of HCVP are "to remedy the unsafe housing conditions and the acute shortage of
decent and safe dwellings for low-income families," not to protect landlords' rights. 42 U.S.C.

143 7(a)( 1 )(A) (declaring Congressional policy). The Ordinance clearly serves those purposes and

objectives by increasing the number of houses and apartments available to voucher holders, and in

doing so, "advance[s] rather than denigrate[s]" the Program's objectives. Bourbeau, 549 F. Supp.
2d at 88 (citing Glenmont Hills, 936 A.2d at 336).
In support

of its contrary position, the Association cites Salute v. Stratford Greens Garden

Apartments, 136 F.3d 293 (2d Cir. 1998), and Knapp v. Eagle Property Management Corp., 54 F.3d
1272 (2d Cir. 1995). Neither case directly addresses federal preemption. The question before the

Salute court was whether the provision of the Fair Housing Act that requires landlords to make
"reasonable accommodations" for disabled tenants required landlords to accept disabled tenants'
housing vouchers. Salute, 136 F.3d at 301. In holding it did not, the Salute court did discuss the
The Court further notes the inference HCVP is voluntary comes from solely from the previously quoted
subsection of the statute which states "[c]ontracts to make assistance payments entered into by a [PHA] with a [landlord]
shall provide that. . .the selection oftenants shall be the function of the owner[.]" 42 U.S.C. 1437f(d)(1)(A). Nothing
in that provision implies a landlord should have the right to discriminate against a voucher holder simply because he or
she is a voucher holder. Franklin Tower One, 725 A.2d at 1113.
2

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"burdensome requirements" of the voucher program, but the underpinning of its decision was that
the disabled plaintiffs, in asking the landlords to accommodate them by accepting their vouchers,
sought "to remedy economic discrimination of a kind that is practiced without regard to handicap."
Id. at 302. Consequently, the Salute panel reasoned, it was not necessary to require landlords to

accept disabled persons' housing vouchers "to afford handicapped persons equal opportunity to use
and enjoy a dwelling." Id. (internal quotes omitted).

Similarly, the Knapp court did not confront a preemption question. The issue before the
panel was whether a Wisconsin statute that prevented discrimination in housing based upon "lawful
source of income" encompassed housing vouchers. Knapp, 54 F.3d at 1282. In holding housing

vouchers were outside the statute's purview, the court noted the contrary result would mean any
landlord who did not accept vouchers could be liable for discrimination, and observed: "It seems

questionable.

. .

to allow a state to make a voluntary federal program mandatory." Id. Even in so

observing, however, the Knapp court included a qualifiing citation to Attorney General

which found the Fair Housing Act did not preempt a state source-of-income

v.

Brown,

statutethe

only

reported decision discussing the question as of 1995, the year Knapp was decided. Id. (citing 511

N.E.2d at 1106). The Court finds the decisions from those courts directly presented with the federal

preemption question far more persuasive than dicta from those which were not.
Finally, the Court notes the HUD regulations implementing HCVP specifically provide the
federal statutes creating it are not intended "to pre-empt operation of State and local laws that

prohibit discrimination against a Section 8 voucher-holder because of status as a Section 8 voucherholder." 24 C.F.R.

982.53(d). The Court owes deference to HUD's interpretation of the laws it

administers. See Chevron, US.A., Inc.

v.

NaturaiRes. Def Council, Inc., 467 U.S. 837, 844 (1984)

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("We have long recognized that considerable weight should be accorded to an executive

department's construction of a statutory scheme it is entrusted to administer[.]").


Given all of the above, the Court concludes the Association has failed to show a substantial
likelihood of success on the merits of its federal preemption claim.
C.

Texas Constitution
The Association next argues the Ordinance violates Article I, 16 ofthe Texas Constitution,

which prohibits any law impairing the obligation of contracts. The Association contends an
individual may not be forced to contract against his will under Article I,

16;

thus, in the

Association's view, by prohibiting landlords from rejecting applicants because they wish to pay with
housing vouchers, the Ordinance unconstitutionally forces unwilling landlords to sign the HAP
Contract. See Mot. Prelim. Inj. [#4] at 8; Pl.'s Trial Brief [#11] at 4-5.
The Association misapprehends the nature of the constitutional protection. Article I,

16

applies "only where parties have entered into a contract and thereafter a statute is passed that

unlawfully impairs their contractual obligations." Cessna Fin. Corp.


584 (Tex.

App.Houston [1st Dist.]

v.

Morrison, 667 S.W.2d 580,

1984, no writ); see also Travelers 'Ins. Co.

v.

Marshall, 76

S.W.2d 1007, 1011 (Tex. 1934) ("[S]ection 16 of article 1 of the constitution of Texas.... protects
all obligations of contracts from destruction or impairment by subsequent legislation.") (emphasis

added); Henderson

v.

Love, 181 S.W.3d 810, 814 (Tex.

App.Texarkana 2005, no pet.) ("The

'obligation of a contract,' for purposes of the constitutional prohibition of impairment of contractual


obligations, is defined as the law which binds the parties to perform their agreement. The laws in

effect at the time a contract is executed are considered part of that contract.") (emphasis added)
(internal citations omitted); City ofBrownsville v. Pub. Util. Comm 'n of Tex., 616 S.W.2d 402,410

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(Tex.

App.Texarkana 1981, writ ref'd n.r.e.) ("The obligations of a contract are not impaired...

by a statute in effect when the contract was made."); Barton v. Wichita River Oil Co., 187 S.W. 1043,
1044-45 (Tex.

App.Fort

Worth 1916, writ ref'd) ("The provision of the Constitution which

declares that no state shall pass any law impairing the obligation of contracts does not apply to a law
enacted prior to the making of the contract.. . but only to a statute of a state enacted after the making

of the contract."). Because the Association has not alleged the obligations of any existing contract
are impaired by the Ordinance, Article I,

16

does not apply.

Urging a different conclusion, the Association cites to St. Louis Southwestern Railway Co.

of Texas v. GrfJIn,

171 S.W, 703 (Tex. 1914).

GrfjIn provides no support for the Association's

argument. In Griffin, a railway worker (Griffin) sued his employer under what was then known as

the "Blacklisting Law." Id. at 703. The Blacklisting Law required an employer, after firing an
employee, give the employee a "true statement" explaining the reasons for his termination. Id.

Considering the constitutionality of the Blacklisting Law, the court noted when Griffin entered the

railway's employ, Griffin had the right to leave his job without cause or notice, and the railway had
the right to fire Griffin without cause or notice. Id. at 704. The court then observed the Blacklisting
Law, by requiring the railway give Griffin a statement of the "true cause" of his termination, denied

the railway its right to fire Griffin without cause, because a requirement the employer give a "true

cause" for firing an employee necessarily implies a "true cause" exists. Id. The court concluded:
The value of the contract to each party consisted largely in the mutual right to
dissolve the relation ofmaster and servant at will. The destruction of that right in the
corporation was a violation of its liberty of contract and a denial of the equal
protection of the law[] in violation of. . . the fourteenth amendment.
Id. The court was concerned with the effect of the law on the railway's contractual right to terminate

Griffin without cause. The question before the GrfJmn court thus had nothing to do with whether a
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law should be held unconstitutional because it "compelled the entering of contracts," as the

Association claims. Pl.'s Trial Brief [#11] at 5.


Article I,

16

of the Texas Constitution does not apply on these facts. The Association has

therefore failed to demonstrate a substantial likelihood of success on the merits of its obligation-ofcontracts claim.
D.

"Liberty of Contract"
In making its obligation-of-contracts argument, the Association heavily relies on dicta from

the Griffin court: "The liberty to make contracts includes the corresponding right to refuse to accept
a contract[.]" Griffin, 171 S.W. at 704. An argument the Ordinance is unconstitutional because it

will require property owners to sign a contract, however, sounds in substantive due process, not in
impairment of the obligation of contracts. See, e.g., Andrada

v.

City of San Antonio, 555 S.W.2d

488, 491 (Tex. App.San Antonio 1977, writ dism'd) ("[L]iberty of contract is generally said to be
a part of that 'liberty' which is protected by due process clauses."). The Court thus considers the

argument under a due process rubric.

The Association's reluctance to locate its claim in due process is unsurprising, since in the
federal context "[t]he traditional view. . . is that the [Supreme] Court exceeded its legitimatejudicial

role by reading the right of 'liberty of contract' into the Fourteenth Amendment's Due Process
Clause, despite the absence of textual support for this right." David E. Bernstein, Lochner 's

Legacy's Legacy, 82 TEx. L. REv.

1,

3-4 (2003). Since the era of Lochner v. New York3 drew to a

close in the late 1930s, the Supreme Court has reviewed economic legislation affecting liberty of
contract with great deference to the legislature. See, e.g., Usery v. Turner Elkhorm Mining Co., 428

198 U.S. 45 (1905).

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U.s.

1, 15

(1976) ("It is by now well established that legislative Acts adjusting the burdens and

benefits of economic life come to the Court with a presumption of constitutionality, and that the
burden is on one complaining of a due process violation to establish that the legislature has acted in
an arbitrary and irrational way."); Ferguson v. Skrupa, 372 U.S. 726, 730(1963) ("We have returned
to the original constitutional proposition that courts do not substitute their social and economic

beliefs for the judgment of legislative bodies, who are elected to pass laws."); see also Chi. B. & Q.
R. Co. v. McGuire, 219 U.S. 549, 567 (1911) ("The Constitution does not speak

contract.... There is no absolute freedom to do as one wills or to contract

of freedom of

as one chooses.").

A federal "liberty of contract" substantive due process claim is thus a veritable non-starter,
and in any event, the Association has made no allegation the City acted in an arbitrary or irrational

way by passing the Ordinance. Moreover, the Ordinance advances an obviously legitimate

government interest: ensuring low-income personsmany of whom are racial minorities, children,
disabled, or

elderlyhave access

to affordable housing (and thus to better schools and safer

neighborhoods) throughout the City of Austin. See Prelim. Jnj. Mot. Hrg. Ex. D-1 (City Council
Resolution) at 2-3 (noting 91% of rental units in Travis County do not accept vouchers and high

occupancy rates exacerbate the difficulties voucher holders face in finding housing); id. Ex. D-4
(Demographics Rep.) (indicating among heads-of-household who hold vouchers in Austin, 43% are

disabled, 84% are female, and 16% are elderly, and stating 50.8% of HCVP beneficiaries are
children); see also Blue Cross & Blue Shield Mut.
333 (6th Cir. 1997) ("[F]reedom

v.

Blue Cross & Blue ShieldAss 'n, 110 F.3d 318,

of contract entails the freedom not to contract,

. .

except as

restricted by antitrust, antidiscrimination, and other statutes." (emphasis added)).

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A Texas liberty-of-contract due process claim might present a slightly different question.
Texas courts have been inconsistent in describing the scope of substantive due process under the
Texas Constitution as compared to the federal Constitution, sometimes stating the Texas

Constitution provides "an identical guarantee" and sometimes "attempt[ing] to articulate [Texas']
own independent due [process] standard, which some courts have characterized as more rigorous

than the federal standard," Tex. Workers' Comp. Comm 'n

v.

Garcia, 893 S.W.2d 504, 525 (Tex.

1995). The "more rigorous" standard cited is a 1957 formulation:

The line where the police power of the state encounters the barrier of substantive due
process is not susceptible of exact definition. As a general rule the power is
commensurate with, but does not exceed, the duty to provide for the real needs of the
people in their health, safety, comfort and convenience as consistently as maybe with
private property rights.... A large discretion is necessarily vested in the Legislature
to determine not only what the interests of the public require, but what measures are
necessary for the protection of such interests. If there is room for a fair difference of
opinion as to the necessity and reasonableness of a legislative enactment on a subject
which lies within the domain of the police power, the courts will not hold it void.

State v. Richards, 301 S.W.2d 597, 602 (1957) (emphasis added). One Texas court, in dicta, agreed

"in general" with the proposition that Article I,

19

"guarantees broader due process protection for

substantive economic rights than does the United States Constitution." Yorko v. State, 681 S.W.2d
633, 636 (Tex.

App.Houston [14th Dist.] 1984), aff'd, 690 S.W.2d 260 (Tex. Cnm. App. 1985).

"More frequently, however," Texas courts have "relied on both state and federal authorities in

discussing" Article I,

19, and a "substantial number of Texas cases" have held or implied that the

federal and Texas clauses are "identical," in contrast with only a "handful" of opinions suggesting
the Texas clause has independent meaning. Lucas v. United States, 757 S.W.2d 687, 7 12-13 (Tex.
1988) (collecting cases).

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Whichever standard is applied, however, the Court finds the Association has failed to
demonstrate a substantial likelihood of success on the merits. There is, at the very least, "room for
a fair difference of opinion" as to the necessity and reasonableness of the Ordinance in providing for

"the real needs of the people.

. .

as consistently as may be with private property rights." The record

shows HCVP participants suffer serious discrimination in the Austin private housing market and,
to the extent they are able to find housing, are concentrated in the poorest areas of the city. See City

Council Resolution at 3 (stating 91% of Austin landlords do not accept vouchers); Prelim. Inj. Hrg.
Ex. D-3 (indicating concentration of voucher holders by zip code); id. Ex. D-5 (explaining the units

in Austin available to voucher holders "are located in low-opportunity areas and lack high-

performing schools, sustainable employment, and low-crime neighborhoods"). The City determined
the public interest required discrimination against voucher holders be prohibited, as have dozens of
states and municipalities around the nation. See POVERTY & RACE RESEARCH ACTION COUNCIL,
APPENDIX B: STATE, LOCAL, & FEDERAL LAWS BARRING SOURCE-OF-INCOME DISCRIMINATION

(2014) (listing state and local source-of-income laws)4; see also, e.g., Godinez

v.

1-2

Sullivan-Lackey,

815 N.E.2d 822, 824 (Ill. App. Ct, 2004) (finding refusal to rent to voucher holder a violation

of

source-of-income anti-discrimination provision in Chicago's Fair Housing Ordinance); Glenmont


Hills, 936 A.2d at 327 (same, as to Montgomery County, Maryland housing ordinance); Timkovsky
v.

56 Bennett, LLC, 881 N.Y.S.2d 823, 829 (N.Y. App. Div. 2009) (same, as to New York City

housing ordinance).
The counterargument, of course, is that the Ordinance goes too far in attempting to
accomplish its goal, since at least some landlords who do not wish to do so will be required to sign

Available at http://www.prrac.org/pdf'AppendixB-Feb2O 1 O.pdf.

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the HAP Contract and subject themselves to the regulations governing the Program. Orig. Pet. 31.

While the parties dispute the precise extent of the differences between the terms of a tenancy
governed solely by the Association's standard lease and one governed by the standard lease plus the
HAP Contract and Tenancy Addendum, it is clear the latter requires a landlord to shoulder different

burdens and accept different risks than the former.

As previously explained, the PHA's

responsibility for making rent payments terminates automatically under certain circumstances; the
PHA has discretion to stop making payments under certain circumstances; the PHA is only obligated
to pay late fees for tardy payments under certain circumstances; units rented to Program participants

must be inspected, and the PHA will not begin paying rent on a unit until it passes inspection; and
the landlord will not receive the entirety of the first month's rent until thirty to forty-five days after
the unit passes inspection.5
The Court agrees these regulations place some burden on the landlords subject to them, and

acknowledges the potential for lost revenue while a PHA inspection is scheduled and a unit sits
vacant. It is likely there are different, less burdensome ways the City could entice property owners
to participate in the Program. It is also conceivable an individual landlord could experience an

unusually significant financial burden flowing from participation in the Program so great it could
support an as-applied constitutional claim warranting an exception from

participation.6

In the

context of a facial due process challenge, however, this Court cannot say there is no room for a "fair

difference of opinion" regarding the need for the Ordinance and the weight ofthe burdens it imposes,
and will not substitute its judgment for the City Council's.
See Background, subsection A, supra.
6

Cf Krista Sterken, A Different Type ofHo using Crisis. Allocating Costs Fairly and Encouraging Landlord
Participation in Section 8, 43 COLUM. J.L. & Soc. PROBs. 215, 227-30 (2009) (advocating for a "narrow" equitable
exception to landlord participation applicable under "unusual circumstances").

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Further, courts that have considered versions ofthe so-called administrative-burdens defense

have rejected it. See Bourbeau, 549 F. Supp. 2d. at 87; Glenmont Hills, 936 A.2d at 339-40.

Landlords remain free to reject voucher holders provided they do so on other legitimate,
nondiscriminatory grounds, and are not required to reduce the rent they charge even if that means
their units are too expensive for voucher holders to rent. Further, testimony at hearing indicated the

housing quality standards a unit must satisfy to pass the PHA inspection are no more onerous than
those already imposed by the Austin City Code. These burdens are not so severe as to constitute a
violation of due process.
The Court concludes, to the extent the Association raised a "liberty of contract" due process
claim, it has failed to demonstrate a substantial likelihood of success on the merits.

E.

Regulatory Taking
Finally, the Association rather weakly asserts the Ordinance is so burdensome it amounts to

a regulatory taking under the Texas and United States Constitutions and a violation of substantive

due process. See

U.S. CONST.

amends. V, XIV; TEX. C0NsT. art. I,

17(a). Where a plaintiff

alleges a takings claim and a substantive due process claim together, courts must determine the

extent to which the due process claim "rests on protections that are also afforded by the Takings

Clause" and analyze the claim accordingly. John Corp. v. City ofHous., 214 F.3d 573, 583 (5th Cir.
2000). Here, the Court finds, to the extent it is unaddressed by the Court's discussion in section
11(D), supra,

the Association's due process claim is subsumed within its takings claim. The petition

contains very few allegations concerning due process, merely asserting the right to be free from a

"substantial burden" that "deprives property owners of use of their property," see Ong. Pet. [#1-3]

J 30-31; further, the Association fails to develop a due process theory in its briefing, see P1. 's Trial

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Brief [#11] at 6-7. The right to be free from a "burden" that "deprives property owners of use of
their property" falls squarely within the ambit of the Takings Clause. See Yee v. City ofEscondido,
Cal., 503 U.s. 519,522-23 (1992) (explaining the Takings Clause requires compensation where "the

extent to which [the regulation] deprives the owner of the economic use of the property suggest[sJ
that the regulation has unfairly singled out the property owner to bear a burden that should be borne

by the public as a whole"). It is therefore the Takings Clause, "not the more generalized notion of
'substantive due process,' [that] must be the guide for analyzing" the Association's claim. John
Corp., 214 F.3d at 582.

On to the analysis. The Takings Clause of the Fifth Amendment, made applicable to the
States through the Fourteenth Amendment, directs that private property shall not "be taken for public
use, without just compensation." U.S. CONST. amend. V; Chi.,

B.

& Q. R. Co. v. Chicago,

166 U.S.

226, 234 (1897). The Texas Constitution contains a similar mandate: "[n]o person's property shall

be taken.
art. I,

. .

17.

for or applied to public use without adequate compensation being made." TEX. CONST.

Federal and Texas courts apply the same standards in evaluating takings claims. Hearts

Bluff Game Ranch,

Inc.

v.

State, 381 S.W.3d 468, 477 (Tex. 2012) ("We consider the federal and

state takings claims together, as the analysis for both is complementary.")

Before addressing the merits of a takings claim, the Court must be convinced the claim is
ripe, even if neither party has raised the issue. Urban Developers, L.L. C.
468 F.3d 281, 292 (5th Cir. 2006).

v.

City ofJackson, Miss.,

Here, the Intervenors raise the ripeness issue, arguing

adjudication of the takings issue is premature and speculative because the Ordinance, on its face,

does not require landlords to reduce the rents or security deposits they typically charge. While the
Intervenors fail to further elaborate, their ripeness objection appears to be that because the Ordinance

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has yet to take effect, we cannot know whether any landlord will actually lose money due to

operation of the Ordinance.


The Intervenors approach the problem incorrectly. To the extent the Intervenors are pointing
out the Association's challenge presents no concrete controversy concerning application of the

Ordinance to specific landlords, the Court agrees. The Association has raised, however, a pre-

enforcement facial challenge to the constitutionality of the Ordinance itself. Thus,

"the only

question before this court is whether the mere enactment of [the Ordinance] constitutes a taking,"
and the applicable test is whether the Ordinance "denies an owner economically viable use of his

land." KeystoneBituminous CoalAss'nv. DeBenedictis, 480 U.S. 470,493 (1987) (some internal
quotes omitted) (quoting Hodel v. Va. Surface Mining & Reclamation Ass 'ii, Inc., 452 U.S. 264,

295-96 (1981)).
The Association argues the Ordinance does just that, but the Court is unpersuaded.

Landlords remain free to rent their property to paying tenants. No landlord is required to lower the
rent he or she charges for a unit because a voucher holder cannot afford to rent it. Property owners
who accept HCVP tenants receive compensation for doing so in the form ofrent payments from the
government. Further, the Ordinance substantially advances an obviously legitimate government

interest: ensuring low-income persons will have access to affordable housing throughout the City

The Intervenors cite Pennell v. City of San Jose, 485 U.S. 1 (1988), in support of their contrary position.
Fennel! is distinguishable. Fennel! involved a rent-control ordinance requiring city officers to consider "hardship to the
tenant" in deciding whether to approve certain rent increases. Id. at 10. Importantly, the ordinance also provided that
in making the ultimate decision to approve or disapprove a rent increase, the officer "may" disapprove an increase
because of tenant hardship. Id. Because there remained a material question, given the discretion afforded city officers,
as to how the ordinance would ultimately be applied, the Penne!! court found the case did not present a sufficiently
concrete factual setting for adjudication of the takings claim. Id. Here, the Ordinance involves no such discretion: the
City has not contested the fact it intends to apply the Ordinance such that all landlords subject to its strictures are
prohibited from discriminating against voucher holders solely because they are voucher holders. "One does not have
to await the consummation of threatened injury to obtain preventive relief." Blanchette v. Conn. Gen. Ins. Corps., 419
U.S. 102, 143 (1974) (quoting Pennsylvania v. West Virginia, 262 U.S. 553, 593 (1923)).

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of Austin. See Dolan v. City of Tigard, 512 U.S. 374, 385 (1994) ("A land use regulation does not
effect a taking

if it substantially advances legitimate state interests and does not deny an owner

economicallyviable use of his land." (internal quotes omitted)); Mayhew v. Town ofSunnyvale, 964
S.W.2d 922, 933-34 (Tex. 1998) (discussing substantial-advancement requirement).

The Court concludes the Association has failed to carry its burden to show a substantial
likelihood of success on the merits of its takings claim.

Conclusion
The Association has failed to demonstrate a substantial likelihood of success on the merits
on any of its challenges to the Ordinance. The Court therefore need not consider the other

preliminary injunction factors before denying the motion for injunctive relief
Accordingly,
IT IS ORDERED that Plaintiff Austin Apartment Association's Motion for

Preliminary Injunction [#4] is DENIED.


SIGNED this the c27 day of February 2015.

(I
SAM SPARKS
UNITED STATES DISTRICT JUDGE

1146 prelim

inj

ord ba.frrn

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U.S. Department of Housing
and Urban Development
Office of Public and Indian Housing

Housing Assistance Payments Contract


(HAP Contract)
Section 8 Tenant-Based Assistance
Housing Choice Voucher Program

OMB Approval No. 2577- 0169


(Exp. 10/31/2010)

Privacy Act Statement. The Department of Housing and Urban Development (HUD) is authorized to collect the information required on this form by
Section 8 of the U.S. Housing Act of 1937 (42 U.S.C. 1437f). Collection of family members names and unit address, and owners name and payment
address is mandatory. The information is used to provide Section 8 tenant-based assistance under the Housing Choice Voucher program in the form
of housing assistance payments. The information also specifies what utilities and appliances are to be supplied by the owner, and what utilities and
appliances are to be supplied by the tenant. HUD may disclose this information to Federal, State and local agencies when relevant to civil, criminal, or
regulatory investigations and prosecutions. It will not be otherwise disclosed or released outside of HUD, except as permitted or required by law.
Failure to provide any of the information may result in delay or rejection of family or owner participation in the program.

________________________________________________________________________________
Instructions for use of HAP Contract
This form of Housing Assistance Payments Contract (HAP contract)
is used to provide Section 8 tenant-based assistance under the
housing choice voucher program (voucher program) of the U.S.
Department of Housing and Urban Development (HUD). The main
regulation for this program is 24 Code of Federal Regulations Part
982.
The local voucher program is administered by a public housing
agency (PHA) . The HAP contract is an agreement between the PHA
and the owner of a unit occupied by an assisted family. The HAP
contract has three parts:
Part A Contract information (fill-ins). See
section by section instructions. Part B
Body of contract
Part C Tenancy addendum

How to fill in Part A


Section by Section Instructions
Section 2: Tenant
Enter full name of tenant.
Section 3. Contract Unit
Enter address of unit, including apartment number, if any.

Use of this form


Use of this HAP contract is required by HUD. Modification of the
HAP contract is not permitted. The HAP contract must be word-forword in the form prescribed by HUD.
However, the PHA may choose to add the following:
Language that prohibits the owner from collecting a security
deposit in excess of private market practice, or in excess of
amounts charged by the owner to unassisted tenants. Such a
prohibition must be added to Part A of the HAP contract.
Language that defines when the housing assistance payment by
the PHA is deemed received by the owner (e.g., upon mailing
by the PHA or actual receipt by the owner). Such language
must be added to Part A of the HAP contract.
To prepare the HAP contract, fill in all contract information in Part A
of the contract. Part A must then be executed by the owner and the
PHA.
Use for special housing types
In addition to use for the basic Section 8 voucher program, this form
must also be used for the following special housing types which are
voucher program variants for special needs (see 24 CFR Part 982,
Subpart M): (1) single room occupancy (SRO) housing; (2)
congregate housing; (3) group home; (4) shared housing; and (5)
manufactured home rental by a family that leases the manufactured
home and space. When this form is used for a special housing type,
the special housing type shall be specified in Part A of the HAP
contract, as follows: This HAP contract is used for the following
special housing type under HUD regulations for the Section 8
voucher program: (Insert Name of Special Housing type).

Previous editions are obsolete

However, this form may not be used for the following special
housing types: (1) manufactured home space rental by a family that
owns the manufactured home and leases only the space; (2)
cooperative housing; and (3) the homeownership option under
Section 8(y) of the United States Housing Act of 1937 (42 U.S.C.
1437f(y)).

Section 4. Household Members


Enter full names of all PHA-approved household members. Specify if
any such person is a live-in aide, which is a person approved by the
PHA to reside in the unit to provide supportive services for a family
member who is a person with disabilities.
Section 5. Initial Lease Term
Enter first date and last date of initial lease term.
The initial lease term must be for at least one year. However, the
PHA may approve a shorter initial lease term if the PHA
determines that:
Such shorter term would improve housing
opportunities for the tenant, and
Such shorter term is the prevailing local market
practice.
Section 6. Initial Rent to Owner
Enter the amount of the monthly rent to owner during the initial lease
term. The PHA must determine that the rent to owner is reasonable in
comparison to rent for other comparable unassisted units. During the
initial lease term, the owner may not raise the rent to owner.
Section 7. Housing Assistance Payment
Enter the initial amount of the monthly housing assistance
payment.
Section 8. Utilities and Appliances.
The lease and the HAP contract must specify what utilities and
appliances are to be supplied by the owner, and what
utilities and appliances are to be supplied by the tenant. Fill in
section 8 to show who is responsible to provide or pay for utilities
and appliances.

Page 1 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

form HUD-52641 (8/2009)


ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 50 of 70


U.S. Department of Housing
Housing Assistance Payments Contract
and Urban Development
(HAP Contract)
Office of Public and Indian Housing
Section 8 Tenant-Based Assistance
Housing Choice Voucher Program
________________________________________________________________________________________

Part A of the HAP Contract: Contract Information


(To prepare the contract, fill out all contract information in Part A.)
1. Contents of Contract
This HAP contract has three parts:
Part A: Contract Information
Part B: Body of Contract Part
C: Tenancy Addendum

2.

Tenant

3.

Contract Unit

4.

Household
The following persons may reside in the unit. Other persons may not be added to the household without prior written approval of
the owner and the PHA.

5.

Initial Lease Term


The initial lease term begins on (mm/dd/yyyy): ______________________________
The initial lease term ends on (mm/dd/yyyy): ________________________________

6.

Initial Rent to Owner


The initial rent to owner is: $ __________________________
During the initial lease term, the owner may not raise the rent to owner.

7.

Initial Housing Assistance Payment

The HAP contract term commences on the first day of the initial lease term. At the beginning of the HAP contract term, the amount
of the housing assistance payment by the PHA to the owner is $ __________________ per month.
The amount of the monthly housing assistance payment by the PHA to the owner is subject to change during the HAP contract term
in accordance with HUD requirements.

form HUD-52641 (8/2009)


Previous editions are obsolete

Page 2 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 51 of 70


___________________________________________________________________________________________________________
8.

Utilities and Appliances

The owner shall provide or pay for the utilities and appliances indicated below by an O. The tenant shall provide or pay for the utilities and appliances indicated
below by a T. Unless otherwise specified below, the owner shall pay for all utilities and appliances provided by the owner.

Item

Specify fuel type

Provided by

Heating

Natural gas

Bottle gas

Oil or Electric

Coal or Other

Cooking

Natural gas

Bottle gas

Oil or Electric

Coal or Other

Water Heating

Natural gas

Oil or Electric

Coal or Other

Bottle gas

Paid by

Other Electric
Water
Sewer
Trash Collection
Air Conditioning
Refrigerator
Range/Microwave
Other (specify)
Signatures:
Public Housing Agency

Owner

____________________________________________________

_________________________________________________

Print or Type Name of PHA

Print or Type Name of Owner

__________________________________________________________________________
Signature

______________________________________________________________________
Signature

__________________________________________________________________________
Print or Type Name and Title of Signatory

______________________________________________________________________
Print or Type Name and Title of Signatory

__________________________________________________________________________
Date (mm/dd/yyyy)

______________________________________________________________________
Date (mm/dd/yyyy)

_________________________________________________________________________________________
Mail Payments to:

_________________________________________________
Name

______________________________________________________________________
Address (street, city, State, Zip)

form HUD-52641 (8/2009)


Previous editions are obsolete

Page 3 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 52 of 70


U.S. Department of Housing
and Urban Development
Office of Public and Indian Housing

Housing Assistance Payments Contract


(HAP Contract)
Section 8 Tenant-Based Assistance
Housing Choice Voucher Program

___________________________________________________________________________
Part B of HAP Contract: Body of Contract
1.

Purpose
a.

b.

c.

d.

This is a HAP contract between the PHA and the


owner. The HAP contract is entered to provide
assistance for the family under the Section 8 voucher
program (see HUD program regulations at
24 Code of Federal Regulations Part 982).
The HAP contract only applies to the household and
contract unit specified in Part A of the HAP
contract.
During the HAP contract term, the PHA will pay
housing assistance payments to the owner in
accordance with the HAP contract.
The family will reside in the contract unit with
assistance under the Section 8 voucher program. The
housing assistance payments by the PHA assist the
tenant to lease the contract unit from the owner for
occupancy by the family.

d.

e.

f.

2.

Lease of Contract Unit


a.

b.

c.

d.

e.

3.

The owner has leased the contract unit to the tenant


for occupancy by the family with assistance under
the Section 8 voucher program.
The PHA has approved leasing of the unit in
accordance with requirements of the Section 8
voucher program.
The lease for the contract unit must include wordfor-word all provisions of the tenancy addendum
required by HUD (Part C of the HAP contract).
The owner certifies that:
(1) The owner and the tenant have entered into a
lease of the contract unit that includes all
provisions of the tenancy addendum.
(2) The lease is in a standard form that is used in
the locality by the owner and that is generally
used for other unassisted tenants in the
premises.
(3) The lease is consistent with State and local
law.
The owner is responsible for screening the familys
behavior or suitability for tenancy. The PHA is not
responsible for such screening. The PHA has no
liability or responsibility to the owner or other
persons for the familys behavior or the familys
conduct in tenancy.

g.

4.

Term of HAP Contract


a.

b.

Maintenance, Utilities, and Other Services


a.

b.
c.

for such breach include recovery of overpayments,


suspension of housing assistance payments,
abatement or other reduction of housing assistance
payments, termination of housing assistance
payments, and termination of the HAP contract. The
PHA may not exercise such remedies against the
owner because of an HQS breach for which the
family is responsible, and that is not caused by the
owner.
The PHA shall not make any housing assistance
payments if the contract unit does not meet the HQS,
unless the owner corrects the defect within the
period specified by the PHA and the PHA verifies
the correction. If a defect is life threatening, the
owner must correct the defect within no more than
24 hours. For other defects, the owner must correct
the defect within the period specified by the PHA.
The PHA may inspect the contract unit and premises
at such times as the PHA determines necessary, to
ensure that the unit is in accordance with the HQS.
The PHA must notify the owner of any HQS defects
shown by the inspection.
The owner must provide all housing services as
agreed to in the lease.

The owner must maintain the contract unit and


premises in accordance with the housing quality
standards (HQS).
The owner must provide all utilities needed to
comply with the HQS.
If the owner does not maintain the contract unit in
accordance with the HQS, or fails to provide all
utilities needed to comply with the HQS, the PHA
may exercise any available remedies. PHA remedies

Relation to lease term. The term of the HAP


contract begins on the first day of the initial term of
the lease, and terminates on the last day of the term
of the lease (including the initial lease term and any
extensions).
When HAP contract terminates.
(1) The HAP contract terminates automatically if
the lease is terminated by the owner or the
tenant.
(2) The PHA may terminate program assistance
for the family for any grounds authorized in
accordance with HUD requirements. If the
PHA terminates program assistance for the
family, the HAP contract terminates
automatically.
(3) If the family moves from the contract unit, the
HAP contract terminates automatically.
(4) The HAP contract terminates automatically 180
calendar days after the last housing assistance
payment to the owner.
(5) The PHA may terminate the HAP contract if
the PHA determines, in accordance with HUD
requirements, that available program funding is
not sufficient to support continued assistance
for families in the program.
(6) The HAP contract terminates automatically upon the
death of a single member household, including single
member households with a live-in aide.

form HUD-52641 (8/2009)


Previous editions are obsolete

Page 4 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 53 of 70


(7)

(8)

(9)

5.

Provision and Payment for Utilities and Appliances


a.
b.
c.

6.

The lease must specify what utilities are to be provided


or paid by the owner or the tenant.
The lease must specify what appliances are to be provided or paid by the owner or the tenant.
Part A of the HAP contract specifies what utilities and
appliances are to be provided or paid by the owner or
the tenant. The lease shall be consistent with the HAP
contract.

Rent to Owner: Reasonable Rent


a.

b.

c.

d.

7.

The PHA may terminate the HAP contract if the


PHA determines that the contract unit does not
provide adequate space in accordance with the
HQS because of an increase in family size or a
change in family composition.
If the family breaks up, the PHA may terminate
the HAP contract, or may continue housing
assistance payments on behalf of family members
who remain in the contract unit.
The PHA may terminate the HAP contract if the
PHA determines that the unit does not meet all
requirements of the HQS, or determines that the
owner has otherwise breached the HAP contract.

b.

During the HAP contract term, the rent to owner may at


no time exceed the reasonable rent for the contract unit
as most recently determined or redetermined by the
PHA in accordance with HUD requirements.
The PHA must determine whether the rent to owner is
reasonable in comparison to rent for other comparable
unassisted units. To make this determination, the PHA
must consider:
(1) The location, quality, size, unit type, and age of
the contract unit; and
(2) Any amenities, housing services, maintenance
and utilities provided and paid by the owner.
The PHA must redetermine the reasonable rent when
required in accordance with HUD requirements. The
PHA may redetermine the reasonable rent at any time.
During the HAP contract term, the rent to owner may
not exceed rent charged by the owner for comparable
unassisted units in the premises. The owner must give
the PHA any information requested by the PHA on
rents charged by the owner for other units in the
premises or elsewhere.

c.

d.

e.

PHA Payment to Owner


a.

When paid
(1) During the term of the HAP contract, the PHA
must make monthly housing assistance payments
to the owner on behalf of the family at the

beginning of each month.


(2)
(3)

The PHA must pay housing assistance payments


promptly when due to the owner.
If housing assistance payments are not paid
promptly when due after the first two calendar
months of the HAP contract term, the PHA shall
pay the owner penalties if all of the following
circumstances apply: (i) Such penalties are in
accordance with generally accepted practices and
law, as applicable in the local housing market,

f.

8.

governing penalties for late payment of rent by a


tenant; (ii) It is the owners practice to charge
such penalties for assisted and unassisted tenants;
and (iii) The owner also charges such penalties
against the tenant for late payment of family rent
to owner. However, the PHA shall not be
obligated to pay any late payment penalty if HUD
determines that late payment by the PHA is due
to factors beyond the PHAs control. Moreover,
the PHA shall not be obligated to pay any late
payment penalty if housing assistance payments
by the PHA are delayed or denied as a remedy for
owner breach of the HAP contract (including any
of the following PHA remedies: recovery of
overpayments, suspension of housing assistance
payments, abatement or reduction of housing
assistance payments, termination of housing
assistance payments and termination of the
contract).
(4) Housing assistance payments shall only be paid
to the owner while the family is residing in the
contract unit during the term of the HAP contract.
The PHA shall not pay a housing assistance
payment to the owner for any month after the
month when the family moves out.
Owner compliance with HAP contract. Unless the
owner has complied with all provisions of the HAP
contract, the owner does not have a right to receive
housing assistance payments under the HAP contract.
Amount of PHA payment to owner
(1) The amount of the monthly PHA housing
assistance payment to the owner shall be
determined by the PHA in accordance with HUD
requirements for a tenancy under the voucher
program.
(2) The amount of the PHA housing assistance
payment is subject to change during the HAP
contract term in accordance with HUD
requirements. The PHA must notify the family
and the owner of any changes in the amount of
the housing assistance payment.
(3) The housing assistance payment for the first
month of the HAP contract term shall be prorated for a partial month.
Application of payment. The monthly housing
assistance payment shall be credited against the
monthly rent to owner for the contract unit.
Limit of PHA responsibility.
(1) The PHA is only responsible for making housing
assistance payments to the owner in accordance
with the HAP contract and HUD requirements for
a tenancy under the voucher program.
(2) The PHA shall not pay any portion of the rent to
owner in excess of the housing assistance
payment. The PHA shall not pay any other claim
by the owner against the family.
Overpayment to owner. If the PHA determines that
the owner is not entitled to the housing assistance
payment or any part of it, the PHA, in addition to other
remedies, may deduct the amount of the overpayment
from any amounts due the owner (including amounts
due under any other Section 8 assistance contract).

Owner Certification
form HUD-52641 (8/2009)

Previous editions are obsolete

Page 5 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 54 of 70


(5)

During the term of this contract, the owner certifies that:


a. The owner is maintaining the contract unit and premises in
accordance with the HQS.
b. The contract unit is leased to the tenant. The lease includes
the tenancy addendum (Part C of the HAP contract),
and is in accordance with the HAP contract and
program requirements. The owner has provided the
lease to the PHA, including any revisions of the lease.
c.
The rent to owner does not exceed rents charged by the
owner for rental of comparable unassisted units in the
premises.
d.
Except for the rent to owner, the owner has not
received and will not receive any payments or other
consideration (from the family, the PHA, HUD, or any
other public or private source) for rental of the contract
unit during the HAP contract term.
e.
The family does not own or have any interest in the
contract unit.
f.
To the best of the owners knowledge, the members of
the family reside in the contract unit, and the unit is the
familys only residence.
g.
The owner (including a principal or other interested
party) is not the parent, child, grandparent, grandchild,
sister, or brother of any member of the family, unless
the PHA has determined (and has notified the owner
and the family of such determination) that approving
rental of the unit, notwithstanding such relationship,
would provide reasonable accommodation for a family
member who is a person with disabilities.

b.

c.

d.

e.

f.

11.

PHA and HUD Access to Premises and Owners Records


a.

9. Prohibition of Discrimination. In accordance with


applicable equal opportunity statutes, Executive Orders,
and regulations:
a.

b.

The owner must not discriminate against any person


because of race, color, religion, sex, national origin,
age, familial status, or disability in connection with the
HAP contract.
The owner must cooperate with the PHA and HUD in
conducting equal opportunity compliance reviews and
complaint investigations in connection with the HAP
contract.

b.

c.

10. Owners Breach of HAP Contract


a.

Any of the following actions by the owner (including a


principal or other interested party) is a breach of the
HAP contract by the owner:
(1) If the owner has violated any obligation under the
HAP contract, including the owners obligation
to maintain the unit in accordance with the HQS.
(2) If the owner has violated any obligation under
any other housing assistance payments contract
under Section 8.
(3) If the owner has committed fraud, bribery or any
other corrupt or criminal act in connection with
any Federal housing assistance program.
(4) For projects with mortgages insured by HUD or
loans made by HUD, if the owner has failed to
comply with the regulations for the applicable
mortgage insurance or loan program, with the
mortgage or mortgage note, or with the
regulatory agreement; or if the owner has
committed fraud, bribery or any other corrupt or
criminal act in connection with the mortgage or
loan.

If the owner has engaged in any drug-related


criminal activity or any violent criminal activity.
If the PHA determines that a breach has occurred, the
PHA may exercise any of its rights and remedies under
the HAP contract, or any other available rights and
remedies for such breach. The PHA shall notify the
owner of such determination, including a brief
statement of the reasons for the determination. The
notice by the PHA to the owner may require the owner
to take corrective action, as verified or determined by
the PHA, by a deadline prescribed in the notice.
The PHAs rights and remedies for owner breach of the
HAP contract include recovery of overpayments,
suspension of housing assistance payments, abatement
or other reduction of housing assistance payments,
termination of housing assistance payments, and
termination of the HAP contract.
The PHA may seek and obtain additional relief by
judicial order or action, including specific performance,
other injunctive relief or order for damages.
Even if the family continues to live in the contract unit,
the PHA may exercise any rights and remedies for
owner breach of the HAP contract.
The PHAs exercise or non-exercise of any right or
remedy for owner breach of the HAP contract is not a
waiver of the right to exercise that or any other right or
remedy at any time.

The owner must provide any information pertinent to


the HAP contract that the PHA or HUD may
reasonably require.
The PHA, HUD and the Comptroller General of the
United States shall have full and free access to the
contract unit and the premises, and to all accounts and
other records of the owner that are relevant to the HAP
contract, including the right to examine or audit the
records and to make copies.
The owner must grant such access to computerized or
other electronic records, and to any computers, equipment or facilities containing such records, and must
provide any information or assistance needed to access
the records.

12. Exclusion of Third Party Rights


a.

b.

c.

d.

The family is not a party to or third party beneficiary of


Part B of the HAP contract. The family may not
enforce any provision of Part B, and may not exercise
any right or remedy against the owner or PHA under
Part B.
The tenant or the PHA may enforce the tenancy
addendum (Part C of the HAP contract) against the
owner, and may exercise any right or remedy against
the owner under the tenancy addendum.
The PHA does not assume any responsibility for injury
to, or any liability to, any person injured as a result of
the owners action or failure to act in connection with
management of the contract unit or the premises or with
implementation of the HAP contract, or as a result of
any other action or failure to act by the owner.
The owner is not the agent of the PHA, and the HAP
contract does not create or affect any relationship
between the PHA and any lender to the owner or any
suppliers, employees, contractors or subcontractors
used by the owner in connection with management of
form HUD-52641 (8/2009)

Previous editions are obsolete

Page 6 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 55 of 70


the contract unit or the premises or with
implementation of the HAP contract.

13. Conflict of Interest


a.

b.

c.

d.

e.
f.
g.

Covered individual means a person or entity who is a


member of any of the following classes:
(1) Any present or former member or officer of the
PHA (except a PHA commissioner who is a
participant in the program);
(2) Any employee of the PHA, or any contractor,
sub-contractor or agent of the PHA, who
formulates policy or who influences decisions
with respect to the program;
(3) Any public official, member of a governing body,
or State or local legislator, who exercises
functions or responsibilities with respect to the
program; or
(4) Any member of the Congress of the United
States.
A covered individual may not have any direct or
indirect interest in the HAP contract or in any benefits
or payments under the contract (including the interest
of an immediate family member of such covered
individual) while such person is a covered individual or
during one year thereafter.
Immediate family member means the spouse, parent
(including a stepparent), child (including a stepchild),
grandparent, grandchild, sister or brother (including a
stepsister or stepbrother) of any covered individual.
The owner certifies and is responsible for assuring that
no person or entity has or will have a prohibited
interest, at execution of the HAP contract, or at any
time during the HAP contract term.
If a prohibited interest occurs, the owner shall promptly
and fully disclose such interest to the PHA and HUD.
The conflict of interest prohibition under this section
may be waived by the HUD field office for good cause.
No member of or delegate to the Congress of the
United States or resident commissioner shall be
admitted to any share or part of the HAP contract or to
any benefits which may arise from it.

14. Assignment of the HAP Contract


a.
b.

c.

d.

The owner may not assign the HAP contract to a new


owner without the prior written consent of the PHA.
If the owner requests PHA consent to assign the HAP
contract to a new owner, the owner shall supply any
information as required by the PHA pertinent to the
proposed assignment.
The HAP contract may not be assigned to a new owner
that is debarred, suspended or subject to a limited
denial of participation under HUD regulations (see 24
Code of Federal Regulations Part 24).
The HAP contract may not be assigned to a new owner
if HUD has prohibited such assignment because:
(1) The Federal government has instituted an
administrative or judicial action against the
owner or proposed new owner for violation of the
Fair Housing Act or other Federal equal
opportunity requirements, and such action is
pending; or
(2) A court or administrative agency has determined
that the owner or proposed new owner violated

the Fair Housing Act or other Federal equal


opportunity requirements.
e.
The HAP contract may not be assigned to a new owner
if the new owner (including a principal or other
interested party) is the parent, child, grandparent,
grandchild, sister or brother of any member of the
family, unless the PHA has determined (and has
notified the family of such determination) that
approving the assignment, notwithstanding such
relationship, would provide reasonable accommodation
for a family member who is a person with disabilities.
f.
The PHA may deny approval to assign the HAP
contract if the owner or proposed new owner (including
a principal or other interested party):
(1) Has violated obligations under a housing assistance
payments contract under Section 8;
(2) Has committed fraud, bribery or any other corrupt
or criminal act in connection with any Federal
housing program;
(3) Has engaged in any drug-related criminal activity
or any violent criminal activity;
(4) Has a history or practice of non-compliance with
the HQS for units leased under the Section 8
tenant-based programs, or non-compliance with
applicable housing standards for units leased with
project-based Section 8 assistance or for units
leased under any other Federal housing program;
(5) Has a history or practice of failing to terminate
tenancy of tenants assisted under any Federally
assisted housing program for activity engaged in
by the tenant, any member of the household, a
guest or another person under the control of any
member of the household that:
(a) Threatens the right to peaceful enjoyment
of the premises by other residents;
(b) Threatens the health or safety of other
residents, of employees of the PHA, or of
owner employees or other persons engaged in
management of the housing;
(c) Threatens the health or safety of, or the
right to peaceful enjoyment of their residents
by, persons residing in the immediate vicinity of
the premises; or
(d) Is drug-related criminal activity or
violent criminal activity;
(6) Has a history or practice of renting units that fail to
meet State or local housing codes; or
(7) Has not paid State or local real estate taxes, fines or
assessments.
g.
The new owner must agree to be bound by and comply
with the HAP contract. The agreement must be in
writing, and in a form acceptable to the PHA. The new
owner must give the PHA a copy of the executed
agreement.

15. Foreclosure. In the case of any foreclosure, the immediate


successor in interest in the property pursuant to the foreclosure
shall assume such interest subject to the lease between the prior
owner and the tenant and to the HAP contract between the prior
owner and the PHA for the occupied unit. This provision does not
affect any State or local law that provides longer time periods or
other additional protections for tenants. This provision will sunset
on December 31, 2012 unless extended by law.
form HUD-52641 (8/2009)

Previous editions are obsolete

Page 7 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 56 of 70


16. Written Notices. Any notice by the PHA or the owner
in connection with this contract must be in writing.

17.

Entire Agreement: Interpretation


a. The HAP contract contains the entire agreement between
the owner and the PHA.
b
The HAP contract shall be interpreted and implemented
in accordance with all statutory requirements, and with
all HUD requirements, including the HUD program
regulations at 24 Code of Federal Regulations Part 982.

form HUD-52641 (8/2009)


Previous editions are obsolete

Page 8 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 57 of 70


U.S. Department of Housing
and Urban Development
Office of Public and Indian Housing

Housing Assistance Payments Contract


(HAP Contract)
Section 8 Tenant-Based Assistance
Housing Choice Voucher Program

___________________________________________________________________________
c.

Part C of HAP Contract: Tenancy Addendum


1.

Section 8 Voucher Program


a.

b.

2.

b.

Family Payment to Owner


a.

b.

The owner has given the PHA a copy of the lease,


including any revisions agreed by the owner and the
tenant. The owner certifies that the terms of the lease
are in accordance with all provisions of the HAP
contract and that the lease includes the tenancy
addendum.
The tenant shall have the right to enforce the
tenancy addendum against the owner. If there is any
conflict between the tenancy addendum and any
other provisions of the lease, the language of the
tenancy addendum shall control.

c.

d.

Use of Contract Unit


a.

b.

c.

d.
e.

4.

5.

Lease
a.

3.

The owner is leasing the contract unit to the tenant


for occupancy by the tenants family with assistance
for a tenancy under the Section 8 housing choice
voucher program (voucher program) of the United
States Department of Housing and Urban
Development (HUD).
The owner has entered into a Housing Assistance
Payments Contract (HAP contract) with the PHA
under the voucher program. Under the HAP
contract, the PHA will make housing assistance
payments to the owner to assist the tenant in leasing
the unit from the owner.

During the lease term, the family will reside in the


contract unit with assistance under the voucher
program.
The composition of the household must be approved
by the PHA. The family must promptly inform the
PHA of the birth, adoption or court-awarded custody
of a child. Other persons may not be added to the
household without prior written approval of the
owner and the PHA.
The contract unit may only be used for residence by
the PHA-approved household members. The unit
must be the familys only residence. Members of the
household may engage in legal profit making
activities incidental to primary use of the unit for
residence by members of the family.
The tenant may not sublease or let the unit.
The tenant may not assign the lease or transfer the
unit.

e.

f.

6.

a.

b.

b.

c.

The initial rent to owner may not exceed the amount


approved by the PHA in accordance with HUD
requirements.
Changes in the rent to owner shall be determined by
the provisions of the lease. However, the owner may
not raise the rent during the initial term of the lease.

7.

The family is responsible for paying the owner any


portion of the rent to owner that is not covered by
the PHA housing assistance payment.
Each month, the PHA will make a housing
assistance payment to the owner on behalf of the
family in accordance with the HAP contract. The
amount of the monthly housing assistance payment
will be determined by the PHA in accordance with
HUD requirements for a tenancy under the Section 8
voucher program.
The monthly housing assistance payment shall be
credited against the monthly rent to owner for the
contract unit.
The tenant is not responsible for paying the portion
of rent to owner covered by the PHA housing
assistance payment under the HAP contract between
the owner and the PHA. A PHA failure to pay the
housing assistance payment to the owner is not a
violation of the lease. The owner may not terminate
the tenancy for nonpayment of the PHA housing
assistance payment.
The owner may not charge or accept, from the
family or from any other source, any payment for
rent of the unit in addition to the rent to owner. Rent
to owner includes all housing services, maintenance,
utilities and appliances to be provided and paid by
the owner in accordance with the lease.
The owner must immediately return any excess rent
payment to the tenant.

Other Fees and Charges


a.

Rent to Owner

During the term of the lease (including the initial


term of the lease and any extension term), the rent to
owner may at no time exceed:
(1) The reasonable rent for the unit as most
recently determined or redetermined by the
PHA in accordance with HUD requirements,
or
(2) Rent charged by the owner for comparable
unassisted units in the premises.

Rent to owner does not include cost of any meals or


supportive services or furniture which may be
provided by the owner.
The owner may not require the tenant or family
members to pay charges for any meals or supportive
services or furniture which may be provided by the
owner. Nonpayment of any such charges is not
grounds for termination of tenancy.
The owner may not charge the tenant extra amounts
for items customarily included in rent to owner in
the locality, or provided at no additional cost to
unsubsidized tenants in the premises.

Maintenance, Utilities, and Other Services


a.

Maintenance
form HUD-52641 (8/2009)

Previous editions are obsolete

Page 9 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 58 of 70


(1) The owner must maintain the unit and premises
in accordance with the HQS.
(2) Maintenance and replacement (including
redecoration) must be in accordance with the
standard practice for the building concerned as
established by the owner.

b.

c.

d.

8.

Utilities and appliances


(1) The owner must provide all utilities needed to
comply with the HQS.
(2) The owner is not responsible for a breach of
the HQS caused by the tenants failure to:
(a) Pay for any utilities that are to be paid by
the tenant.
(b) Provide and maintain any appliances
that are to be provided by the tenant.
Family damage. The owner is not responsible for a
breach of the HQS because of damages beyond
normal wear and tear caused by any member of the
household or by a guest.
Housing services. The owner must provide all
housing services as agreed to in the lease.

Termination of Tenancy by Owner


a. Requirements. The owner may only terminate the
b.

c.

(2)

d.

tenancy in accordance with the lease and HUD


requirements.
Grounds. During the term of the lease (the initial
term of the lease or any extension term), the owner
may only terminate the tenancy because of:
(1) Serious or repeated violation of the lease;
(2) Violation of Federal, State, or local law that
imposes obligations on the tenant in
connection with the occupancy or use of the
unit and the premises;
(3) Criminal activity or alcohol abuse (as
provided in paragraph c); or
(4) Other good cause (as provided in paragraph
d).
Criminal activity or alcohol abuse.
(1) The owner may terminate the tenancy during
the term of the lease if any member of the
household, a guest or another person under a
residents control commits any of the
following types of criminal activity:
(a) Any criminal activity that threatens the
health or safety of, or the right to
peaceful enjoyment of the premises by,
other residents (including property
management staff residing on the
premises);
(b) Any criminal activity that threatens the
health or safety of, or the right to
peaceful enjoyment of their residences
by, persons residing in the immediate
vicinity of the premises;
(c) Any violent criminal activity on or near
the premises; or
(d) Any drug-related criminal activity on or
near the premises.

The owner may terminate the tenancy during


the term of the lease if any member of the
household is:
(a) Fleeing to avoid prosecution, or custody
or confinement after conviction, for a
crime, or attempt to commit a crime, that
is a felony under the laws of the place
from which the individual flees, or that,
in the case of the State of New Jersey, is
a high misdemeanor; or
(b) Violating a condition of probation or
parole under Federal or State law.
(3) The owner may terminate the tenancy for
criminal activity by a household member in
accordance with this section if the owner
determines that the household member has
committed the criminal activity, regardless of
whether the household member has been
arrested or convicted for such activity.
(4) The owner may terminate the tenancy during
the term of the lease if any member of the
household has engaged in abuse of alcohol
that threatens the health, safety or right to
peaceful enjoyment of the premises by other
residents.
Other good cause for termination of tenancy
(1) During the initial lease term, other good cause
for termination of tenancy must be something
the family did or failed to do.
(2) During the initial lease term or during any
extension term, other good cause may include:
(a) Disturbance of neighbors,
(b) Destruction of property, or
(c) Living or housekeeping habits that cause
damage to the unit or premises.
(3) After the initial lease term, such good cause
may include:
(a) The tenants failure to accept the owners
offer of a new lease or revision;
(b) The owners desire to use the unit for
personal or family use or for a purpose
other than use as a residential rental unit;
or
(c) A business or economic reason for
termination of the tenancy (such as sale of
the property, renovation of the unit, the
owners desire to rent the unit for a higher
rent).
(5) The examples of other good cause in this
paragraph do not preempt any State or local
laws to the contrary.
(6)

In the case of an owner who is an immediate


successor in interest pursuant to foreclosure

during the term of the lease, requiring the


tenant to vacate the property prior to sale shall
not constitute other good cause, except that the
owner may terminate the tenancy effective on
the date of transfer of the unit to the owner if
the owner: (a) will occupy the unit as a
primary residence; and (b) has provided the
tenant a notice to vacate at least 90 days before
the effective date of such notice. This
form HUD-52641 (8/2009)

Previous editions are obsolete

Page 10 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 59 of 70


more demanding standard than other tenants in
determining whether to evict or terminate.

provision shall not affect any State or local law


that provides for longer time periods or
addition protections for tenants. This
provision will sunset on December 31, 2012
unless extended by law.

(6) Nothing in this section may be construed to limit


the authority of an owner or manager to evict, or
the public housing agency to terminate assistance,
to any tenant if the owner, manager, or public
housing agency can demonstrate an actual and
imminent threat to other tenants or those employed
at or providing service to the property if the tenant
is not evicted or terminated from assistance.

e. Protections for Victims of Abuse.


(1)

An incident or incidents of actual or threatened


domestic violence, dating violence, or stalking will
not be construed as serious or repeated violations of
the lease or other good cause for termination of
the assistance, tenancy, or occupancy rights of such
a victim.

(7) Nothing in this section shall be construed to


supersede any provision of any Federal, State, or
local law that provides greater protection than this
section for victims of domestic violence, dating
violence, or stalking.

(2) Criminal activity directly relating to abuse,


engaged in by a member of a tenants household or
any guest or other person under the tenants
control, shall not be cause for termination of
assistance, tenancy, or occupancy rights if the
tenant or an immediate member of the tenants
family is the victim or threatened victim of
domestic violence, dating violence, or stalking.
(3) Notwithstanding any restrictions on admission,
occupancy, or terminations of occupancy or
assistance, or any Federal, State or local law to the
contrary, a PHA, owner or manager may
bifurcate a lease, or otherwise remove a
household member from a lease, without regard to
whether a household member is a signatory to the
lease, in order to evict, remove, terminate
occupancy rights, or terminate assistance to any
individual who is a tenant or lawful occupant and
who engages in criminal acts of physical violence
against family members or others. This action may
be taken without evicting, removing, terminating
assistance to, or otherwise penalizing the victim of
the violence who is also a tenant or lawful
occupant. Such eviction, removal, termination of
occupancy rights, or termination of assistance shall
be effected in accordance with the procedures
prescribed by Federal, State, and local law for the
termination of leases or assistance under the
housing choice voucher program.
(4) Nothing in this section may be construed to limit
the authority of a public housing agency, owner, or
manager, when notified, to honor court orders
addressing rights of access or control of the
property, including civil protection orders issued to
protect the victim and issued to address the
distribution or possession of property among the
household members in cases where a family breaks
up.
(5) Nothing in this section limits any otherwise
available authority of an owner or manager to evict
or the public housing agency to terminate
assistance to a tenant for any violation of a lease
not premised on the act or acts of violence in
question against the tenant or a member of the
tenants household, provided that the owner,
manager, or public housing agency does not subject
an individual who is or has been a victim of
domestic violence, dating violence, or stalking to a

f.

Eviction by court action. The owner may only evict the


tenant by a court action.

g. Owner notice of grounds


(1) At or before the beginning of a court action to
evict the tenant, the owner must give the
tenant a notice that specifies the grounds for
termination of tenancy. The notice may be
included in or combined with any owner
eviction notice.
(2) The owner must give the PHA a copy of any
owner eviction notice at the same time the
owner notifies the tenant.
(3) Eviction notice means a notice to vacate, or a
complaint or other initial pleading used to
begin an eviction action under State or local
law.
9.
Lease: Relation to HAP Contract
If the HAP contract terminates for any reason, the lease terminates
automatically.
10. PHA Termination of Assistance
The PHA may terminate program assistance for the family for any
grounds authorized in accordance with HUD requirements. If the PHA
terminates program assistance for the family, the lease terminates
automatically.
11. Family Move Out
The tenant must notify the PHA and the owner before the family moves
out of the unit.
12.

Security Deposit
a.
The owner may collect a security deposit from the
tenant. (However, the PHA may prohibit the owner
from collecting a security deposit in excess of
private market practice, or in excess of amounts
charged by the owner to unassisted tenants. Any
such PHA-required restriction must be specified in
the HAP contract.)
b.
When the family moves out of the contract unit, the
owner, subject to State and local law, may use the
security deposit, including any interest on the
deposit, as reimbursement for any unpaid rent
payable by the tenant, any damages to the unit or
any other amounts that the tenant owes under the
lease.
form HUD-52641 (8/2009)

Previous editions are obsolete

Page 11 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 60 of 70


c.

d.

The owner must give the tenant a list of all items


charged against the security deposit, and the amount
of each item. After deducting the amount, if any,
used to reimburse the owner, the owner must
promptly refund the full amount of the unused
balance to the tenant.
If the security deposit is not sufficient to cover
amounts the tenant owes under the lease, the owner
may collect the balance from the tenant.

Any notice under the lease by the tenant to the owner or by the owner
to the tenant must be in writing.

17. Definitions

13. Prohibition of Discrimination


In accordance with applicable equal opportunity statutes, Executive
Orders, and regulations, the owner must not discriminate against any
person because of race, color, religion, sex, national origin, age,
familial status or disability in connection with the lease.

14. Conflict with Other Provisions of Lease


a.

b.

The terms of the tenancy addendum are prescribed


by HUD in accordance with Federal law and
regulation, as a condition for Federal assistance to
the tenant and tenants family under the Section 8
voucher program.
In case of any conflict between the provisions of the
tenancy addendum as required by HUD, and any
other provisions of the lease or any other agreement
between the owner and the tenant, the requirements
of the HUD-required tenancy addendum shall
control.

15. Changes in Lease or Rent


a.

b.

c.

d.

The tenant and the owner may not make any change
in the tenancy addendum. However, if the tenant and
the owner agree to any other changes in the lease,
such changes must be in writing, and the owner must
immediately give the PHA a copy of such changes.
The lease, including any changes, must be in
accordance with the requirements of the tenancy
addendum.
In the following cases, tenant-based assistance shall
not be continued unless the PHA has approved a
new tenancy in accordance with program
requirements and has executed a new HAP contract
with the owner:
(1) If there are any changes in lease requirements
governing tenant or owner responsibilities for
utilities or appliances;
(2) If there are any changes in lease provisions
governing the term of the lease;
(3) If the family moves to a new unit, even if the
unit is in the same building or complex.
PHA approval of the tenancy, and execution of a
new HAP contract, are not required for agreed
changes in the lease other than as specified in
paragraph b.
The owner must notify the PHA of any changes in
the amount of the rent to owner at least sixty days
before any such changes go into effect, and the
amount of the rent to owner following any such
agreed change may not exceed the reasonable rent
for the unit as most recently determined or
redetermined by the PHA in accordance with HUD
requirements.

Contract unit. The housing unit rented by the tenant with


assistance under the program.
Family. The persons who may reside in the unit with assistance
under the program.
HAP contract. The housing assistance payments contract between the
PHA and the owner. The PHA pays housing assistance payments to the
owner in accordance with the HAP contract.
Household. The persons who may reside in the contract unit. The
household consists of the family and any PHA-approved live-in aide.
(A live-in aide is a person who resides in the unit to provide
necessary supportive services for a member of the family who is a
person with disabilities.)
Housing quality standards (HQS). The HUD minimum
quality standards for housing assisted under the Section 8
tenant-based programs.
HUD. The U.S. Department of Housing and Urban Development.
HUD requirements. HUD requirements for the Section 8 program.
HUD requirements are issued by HUD headquarters, as regulations,
Federal Register notices or other binding program directives.

Lease. The written agreement between the owner and the tenant for the
lease of the contract unit to the tenant. The lease includes the tenancy
addendum prescribed by HUD.
PHA. Public Housing Agency.
Premises. The building or complex in which the contract unit is
located, including common areas and grounds.
Program. The Section 8 housing choice voucher program.
Rent to owner. The total monthly rent payable to the owner for the
contract unit. The rent to owner is the sum of the portion of rent
payable by the tenant plus the PHA housing assistance payment to
the owner.
Section 8. Section 8 of the United States Housing Act of 1937 (42
United States Code 1437f).
Tenant. The family member (or members) who leases the unit from
the owner.
Voucher program. The Section 8 housing choice voucher program.
Under this program, HUD provides funds to a PHA for rent subsidy
on behalf of eligible families. The tenancy under the lease will be
assisted with rent subsidy for a tenancy under the voucher program.

16. Notices
form HUD-52641 (8/2009)
Previous editions are obsolete

Page 12 of 12
Appendix B to Austin Apartment Association's
Motion for Injunction Pending Appeal

ref Handbook 7420.8

Case 1:14-cv-01146-SS
Document 25 Filed 03/02/15 Page 61 of 70
This Lease Contract is only valid if filled out before January 1, 2016.
Apartment Lease Contract
Date of Lease Contract:__________________________________
(when this Lease Contract is filled out)

This is a binding contract. Read carefully before signing.

Moving In General Information


1.

single months rent. We will not impose late charges until at least the third
day of the month. Youll also pay a charge of $____________ for each
returned check or rejected electronic payment, plus initial and daily late
charges until we receive acceptable payment. If you dont pay rent on
time, youll be in default and all remedies under state law and this Lease
Contract will be authorized. If you violate the animal restrictions of
paragraph 27 or other animal rules, youll pay an initial charge of
$____________ per animal (not to exceed $100 per animal) and a daily
charge of $____________ per animal (not to exceed $10 per day per animal)
from the date the animal was brought into your apartment until it is finally
removed. Well also have all other remedies for such violation.

PARTIES. This Lease Contract is between you, the resident(s) (list all people
signing the Lease Contract): _______________________________________
__________________________________________________________
__________________________________________________________
____________________________________________ and us, the owner:
__________________________________________________________
(name of apartment community or title holder). Youve agreed to rent
Apartment No. _________, at ___________________________________
______________________________________________ (street address)
in ____________________________________________________(city),

7.

Texas, _______________________ (zip code) for use as a private residence


only. The terms you and your refer to all residents listed above, and
a person authorized to act in the event of a sole residents death. The terms
we, us, and our refer to the owner listed above and not to property
managers or anyone else. Written notice to or from our managers
constitutes notice to or from us. If anyone else has guaranteed performance
of this Lease Contract, a separate Lease Contract Guaranty for each
guarantor must be executed.
2.

OCCUPANTS. The apartment will be occupied only by you and (list all
other occupants not signing the Lease Contract):
________________________________________________________________
________________________________________________________________
________________________________________________________________
No one else may occupy the apartment. Persons not listed above must not
stay in the apartment for more than _____ consecutive days without our
prior written consent, and no more than twice that many days in any one
month. If the previous space isnt filled in, two days per month is the limit.

3.

LEASE CONTRACT TERM. The initial term of the Lease Contract begins

For
m
Form
valid for
members
only

on the _________ day of ___________________________, _________ (year),


and ends at midnight the __________ day of ________________________,

_________ (year). This Lease Contract will automatically renew month-tomonth unless either party gives at least __________ days written notice of
termination or intent to move-out as required by paragraph 37. If the
number of days isnt filled in, at least 30 days notice is required.
4.

SECURITY DEPOSIT. The total security deposit for all residents is


$_________, due on or before the date this Lease Contract is signed. This
amount [check one]: does or does not include an animal deposit. Any
animal deposit will be stated in an animal addendum. See paragraphs
41 and 42 for security deposit return information.

5.

KEYS, FURNITURE AND AFFIDAVIT OF MOVE-OUT. You will be


provided ________ apartment key(s), ________ mailbox key(s), and ________
other access devices for ________________________. Any resident, occupant,
or spouse who, according to a remaining residents affidavit, has
permanently moved out or is under court order to not enter the apartment,
is (at our option) no longer entitled to occupancy, keys, or other access
devices. Your apartment will be [check one]: furnished or unfurnished.

6.

UTILITIES/SERVICES. Well pay for the following items, if checked:


gas
water
wastewater electricity trash/recycling
cable/satellite master antenna Internet stormwater/drainage
other _______________________________________________________.
Youll pay for all other utilities and services, related deposits, and any
charges or fees on such utilities and services during your Lease Contract
term. You must not allow any utilities (other than cable or Internet) to
be cut off or switched for any reasonincluding disconnection for not
paying your billsuntil the Lease Contract term or renewal period ends.
If a utility is submetered or prorated by an allocation formula, we will attach
an addendum to this Lease Contract in compliance with state agency rules.
If a utility is individually metered, it must be connected in your name and
you must notify the utility provider of your move-out date so the meter can
be timely read. If you delay getting it turned on in your name by lease
commencement or cause it to be transferred back into our name before you
surrender or abandon the apartment, youll be liable for a $___________
charge (not to exceed $50 per violation), plus the actual or estimated cost
of the utilities used while the utility should have been connected in your
name. If you are in an area open to competition and your apartment
is individually metered, you may choose or change your retail electric
provider at any time. If you qualify, your provider will be the same
as ours, unless you choose a different provider. If you choose or change
your provider, you must give us written notice. You must pay all applicable
provider fees, including any fees to change service back into our name after
you move out.

RENT AND CHARGES. You will pay $____________ per month for rent,
in advance and without demand:
at the onsite managers office
through our online payment site
at ____________________________________________________.
Prorated rent of $___________ is due for the remainder of [check one]: 1st
month or 2nd month, on ______________________________, ___________
(year). Otherwise, you must pay your rent on or before the 1st day of each
month (due date) with no grace period. Cash is unacceptable without our prior
written permission. You must not withhold or offset rent unless authorized by
statute. We may, at our option, require at any time that you pay all rent and
other sums in cash, certified or cashiers check, money order, or one monthly
check rather than multiple checks. If you dont pay all rent on or before the
____________ day of the month, youll pay an initial late charge of
$____________ plus a daily late charge of $____________ per day after that
date until paid in full. Daily late charges will not exceed 15 days for any

8.

INSURANCE. Our insurance does not cover the loss of or damage to your personal
property. You are [check one]:
required to buy and maintain renters or liability insurance (see
attached addendum), or
not required to buy renters or liability insurance.
If neither is checked, insurance is not required but is still strongly recommended.
If not required, we urge you to get your own insurance for losses due to theft, fire,
water damage, pipe leaks and other similar occurrences. Renters insurance does
not cover losses due to a flood. Information on renters insurance is available
from the Texas Department of Insurance.

9.

SECURITY DEVICES. What We Must Provide. Texas law requires, with


some exceptions, that we must provide at no cost to you when occupancy
begins: (1) a window latch on each window; (2) a doorviewer (peephole)
on each exterior door; (3) a pin lock on each sliding door; (4) either a door
handle latch or a security bar on each sliding door; (5) a keyless bolting
device (deadbolt) on each exterior door; and (6) either a keyed doorknob
lock or a keyed deadbolt lock on one entry door. Keyed lock(s) will be
rekeyed after the prior resident moves out. The rekeying will be done either
before you move in or within 7 days after you move in, as required by
statute. If we fail to install or rekey security devices as required by law,
you have the right to do so and deduct the reasonable cost from your next
rent payment under Section 92.165(1), Texas Property Code.
What You Are Now Requesting. Subject to some limitations, under Texas
law you may at any time ask us to: (1) install one keyed deadbolt lock on
an exterior door if it does not have one; (2) install a security bar on a sliding
glass door if it does not have one; and (3) change or rekey locks or latches.
We must comply with those requests, but you must pay for them. Subject to
statutory restrictions on what security devices you may request, you are now
requesting us to install or change at your expense: __________________________
________________ If no item is filled in, then you are requesting none at this time.
Payment. We will pay for missing security devices that are required
by statute. You will pay for: (1) rekeying that you request (except
when we failed to rekey after the previous resident moved out); and
(2) repairs or replacements due to misuse or damage by you or your
family, occupants, or guests. You must pay immediately after the work
is done unless state statute authorizes advance payment. You also must
pay for additional or changed security devices you request, in advance
or afterward, at our option.

Special Provisions and What If Clauses


10. SPECIAL PROVISIONS. The following or attached special provisions
and any addenda or written rules furnished to you at or before signing
will become a part of this Lease Contract and will supersede any
conflicting provisions of this printed Lease Contract form.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
YOUR INITIALS: _________, INITIALS OF OUR REPRESENTATIVE: __________

11. UNLAWFUL EARLY MOVE-OUT; RELETTING CHARGE. Youll


be liable for a reletting charge of $____________ (not to exceed 85%
of the highest monthly rent during the Lease Contract term) if you:
(1) fail to move in, or fail to give written move-out notice as
required in paragraphs 23 or 37; or
(2) move out without paying rent in full for the entire Lease
Contract term or renewal period; or
(3) move out at our demand because of your default; or
(4) are judicially evicted.
The reletting charge is not a cancellation fee and does not release you from your
obligations under this Lease Contract. See the first paragraph of page 2.

APARTMENT LEASE CONTRACT 2013, TEXAS APARTMENT ASSOCIATION, INC.

Appendix C to Austin Apartment Association's Motion for Injunction Pending Appeal

PAGE 1 OF 6

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 62 of 70


Not a Release. The reletting charge is not a Lease Contract
cancellation or buyout fee. It is a liquidated amount covering only part
of our damages; that is, our time, effort, and expense in finding and
processing a replacement. These damages are uncertain and difficult
to ascertainparticularly those relating to make ready, inconvenience,
paperwork, advertising, showing apartments, utilities for showing,
checking prospects, overhead, marketing costs, and locator-service
fees. You agree that the reletting charge is a reasonable estimate of
such damages and that the charge is due whether or not our reletting
attempts succeed. If no amount is stipulated, you must pay our
actual reletting costs so far as they can be determined. The reletting
charge does not release you from continued liability for: future or
past-due rent; charges for cleaning, repairing, repainting, or unreturned
keys; or other sums due.
12. DAMAGES AND REIMBURSEMENT. You must promptly pay
or reimburse us for loss, damage, consequential damages,
government fines or charges, or cost of repairs or service in the
apartment community due to: a violation of the Lease Contract
or rules; improper use; negligence; other conduct by you or your
invitees, guests or occupants; or any other cause not due to our
negligence or fault. You will indemnify and hold us harmless from
all liability arising from the conduct of you, your invitees, guests,
or occupants, or our representatives who perform at your request
services not contemplated in this Lease Contract. Unless the
damage or wastewater stoppage is due to our negligence, were
not liable forand you must pay forrepairs, replacements
and damage to the following if occurring during the Lease
Contract term or renewal period: (1) damage to doors, windows,
or screens; (2) damage from windows or doors left open; and
(3) damage from wastewater stoppages caused by improper
objects in lines exclusively serving your apartment. We may
require payment at any time, including advance payment of
repairs for which youre liable. Delay in demanding sums you owe
is not a waiver.
13. CONTRACTUAL LIEN AND PROPERTY LEFT IN
APARTMENT. All property in the apartment is (unless exempt
under Section 54.042, Texas Property Code) subject to a
contractual lien to secure payment of delinquent rent (except
as prohibited by Section 2306.6738, Texas Government Code, for
owners supported by housing tax credit allocations). For this purpose,
apartment excludes common areas but includes interior living areas
and exterior patios, balconies, attached garages, and storerooms for your
exclusive use.
Removal After We Exercise Lien for Rent. If your rent is
delinquent, our representative may peacefully enter the
apartment and remove and/or store all property subject to lien.
Written notice of entry must be left afterwards in the apartment in
a conspicuous placeplus a list of items removed. The notice must
state the amount of delinquent rent and the name, address, and phone
number of the person to contact about the amount owed. The notice
must also state that the property will be promptly returned when the
delinquent rent is fully paid. All property in the apartment is presumed
to be yours unless proven otherwise.
Removal After Surrender, Abandonment, or Eviction. We or law
officers may remove or store all property remaining in the apartment
or in common areas (including any vehicles you or any occupant or
guest owns or uses) if you are judicially evicted or if you surrender or
abandon the apartment (see definitions in paragraph 42).
Storage. We will store property removed under a contractual lien.
We may, but have no duty to, store property removed after judicial
eviction, surrender, or abandonment of the apartment. Were not
liable for casualty loss, damage, or theft except for property removed
under a contractual lien. You must pay reasonable charges for our
packing, removing, storing, and selling any property. We have a lien
on all property removed and stored after surrender, abandonment,
or judicial eviction for all sums you owe, with one exception: Our lien
on property listed under Texas Property Code Section 54.042 is
limited to charges for packing, removing, and storing.
Redemption. If weve seized and stored property under a contractual
lien for rent as authorized by law, you may redeem the property by
paying all delinquent rent due at the time of seizure. But if notice
of sale (set forth as follows) is given before you seek redemption, you
may redeem only by paying the delinquent rent and reasonable
charges for packing, removing, and storing. If weve removed and
stored property after surrender, abandonment, or judicial eviction,
you may redeem only by paying all sums you owe, including rent,

late charges, reletting charges, storage, damages, etc. We may return


redeemed property at the place of storage, the management office, or the
apartment (at our option). We may require payment by cash, money
order, or certified check.
Disposition or Sale. Except for animals and property removed
after the death of a sole resident, we may throw away or give to a
charitable organization all items of personal property that are: (1) left
in the apartment after surrender or abandonment; or (2) left outside
more than 1 hour after writ of possession is executed, following
judicial eviction. Animals removed after surrender, abandonment, or
eviction may be kenneled or turned over to local authorities or humane
societies. Property not thrown away or given to charity may be
disposed of only by sale, which must be held no sooner than 30 days
after written notice of date, time, and place of sale is sent by both
regular mail and certified mail (return receipt requested) to your last
known address. The notice must itemize the amounts you owe and
the name, address, and phone number of the person to contact about
the sale, the amount owed, and your right to redeem the property. Sale
may be public or private, is subject to any third-party ownership or
lien claims, must be to the highest cash bidder, and may be in bulk,
in batches, or item-by-item. Proceeds exceeding sums owed must be
mailed to you at your last known address within 30 days after sale.
14. FAILING TO PAY FIRST MONTHS RENT. If you dont pay the
first months rent when or before the Lease Contract begins, all future
rent will be automatically accelerated without notice and immediately
due. We also may end your right of occupancy and recover
damages, future rent, reletting charges, attorneys fees, court costs,
and other lawful charges. Our rights, remedies, and duties under
paragraphs 11 and 32 apply to acceleration under this paragraph.
15. RENT INCREASES AND LEASE CONTRACT CHANGES. No
rent increases or Lease Contract changes are allowed before the initial
Lease Contract term ends, except for changes allowed by any special
provisions in paragraph 10, by a written addendum or amendment
signed by you and us, or by reasonable changes of apartment rules
allowed under paragraph 18. If, at least 5 days before the advance
notice deadline referred to in paragraph 3, we give you written notice
of rent increases or Lease Contract changes effective when the Lease
Contract term or renewal period ends, this Lease Contract will
automatically continue month-to-month with the increased rent or
Lease Contract changes. The new modified Lease Contract will begin
on the date stated in the notice (without necessity of your
signature) unless you give us written move-out notice under paragraph
37. The written move-out notice under paragraph 37 applies only to
the end of the current Lease Contract or renewal period.
16. DELAY OF OCCUPANCY. If occupancy is or will be delayed for
construction, repairs, cleaning, or a previous residents holding over,
were not responsible for the delay. The Lease Contract will remain
in force subject to: (1) abatement of rent on a daily basis during
delay; and (2) your right to terminate as set forth below. Termination
notice must be in writing. After termination, you are entitled only
to refund of deposit(s) and any rent paid. Rent abatement or Lease
Contract termination does not apply if delay is for cleaning or repairs
that dont prevent you from occupying the apartment.
If there is a delay and we havent given notice of delay as set forth
immediately below, you may terminate up to the date when the
apartment is ready for occupancy, but not later.
(1) If we give written notice to any of you when or after the Lease
Contract beginsand the notice states that occupancy has
been delayed because of construction or a previous residents
holding over, and that the apartment will be ready on a specific
date you may terminate the Lease Contract within 3 days of
your receiving the notice, but not later.
(2) If we give written notice to any of you before the effective Lease
Contract date and the notice states that construction delay is
expected and that the apartment will be ready for you to
occupy on a specific date, you may terminate the Lease
Contract within 7 days after any of you receives written notice,
but not later. The readiness date is considered the new effective
Lease Contract date for all purposes. This new date may not
be moved to an earlier date unless we and you agree.
17. DISCLOSURE RIGHTS. If someone requests information on you
or your rental history for law-enforcement, governmental, or business
purposes, we may provide it. At our request, any utility provider
may furnish us information about pending or actual connections or
disconnections of utility service to your apartment.

While Youre Living in the Apartment


18. COMMUNITY POLICIES OR RULES. You and all guests and
occupants must comply with any written apartment rules and
community policies, including instructions for care of our property.
Our rules are considered part of this Lease Contract. We may make
reasonable changes to written rules, effective immediately, if they
are distributed and applicable to all units in the apartment
community and do not change dollar amounts on page 1 of this
Lease Contract.
19. LIMITATIONS ON CONDUCT. The apartment and other areas
reserved for your private use must be kept clean. Trash must be
disposed of at least weekly in appropriate receptacles in accordance
with local ordinances. Passageways may be used only for entry or
exit. Any swimming pools, saunas, spas, tanning beds, exercise
rooms, storerooms, laundry rooms, and similar areas must be used
with care in accordance with apartment rules and posted signs.
Glass containers are prohibited in or near pools and all other
common areas. You, your occupants, or guests may not anywhere
in the apartment community: use candles or use kerosene lamps
or heaters without our prior written approval; cook on balconies or
outside; or solicit business or contributions. Conducting any kind
of business (including child care services) in your apartment or in
the apartment community is prohibitedexcept that any lawful
APARTMENT LEASE CONTRACT

business conducted at home by computer, mail, or telephone is


permissible if customers, clients, patients, or other business associates
do not come to your apartment for business purposes. We may
regulate: (1) the use of patios, balconies, and porches; (2) the
conduct of furniture movers and delivery persons; and (3) activities
in common areas.
We may exclude from the apartment community guests or others
who, in our judgment, have been violating the law, violating this
Lease Contract or any apartment rules, or disturbing other residents,
neighbors, visitors, or owner representatives. We may also exclude
from any outside area or common area a person who refuses to show
photo identification or refuses to identify himself or herself as a
resident, occupant, or guest of a specific resident in the community.
You will notify us within 15 days if you or any occupants are
convicted of any felony, or misdemeanor involving a controlled
substance, violence to another person or destruction of property.
You also agree to notify us within 15 days if you or any occupants
register as a sex offender in any state. Informing us of criminal
convictions or sex offender registry does not waive any rights we
have against you.
20. PROHIBITED CONDUCT. You and your occupants or guests may
not engage in the following activities: criminal conduct; behaving in

2013, TEXAS APARTMENT ASSOCIATION, INC.

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utilities, pipe leaks, theft, negligent or intentional acts of residents,
occupants or guests, or vandalism unless otherwise required by
law. We have no duty to remove any ice, sleet, or snow but may remove
any amount with or without notice. Unless we instruct otherwise, you
mustfor 24 hours a day during freezing weather(1) keep the apartment
heated to at least 50 degrees; (2) keep cabinet and closet doors open; and
(3) drip hot and cold water faucets. Youll be liable for damage to our and
others property if damage is caused by broken water pipes due to your
violating these requirements.
Crime or Emergency. Dial 911 or immediately call local medical
emergency, fire, or police personnel in case of accident, fire, smoke,
suspected criminal activity, or other emergency involving imminent harm.
You should then contact our representative. You wont treat any of our
security measures as an express or implied warranty of security, or as a
guarantee against crime or of reduced risk of crime. Unless otherwise
provided by law, were not liable to you or any guests or occupants for injury,
damage, or loss to person or property caused by criminal conduct of other
persons, including theft, burglary, assault, vandalism, or other crimes. Even
if previously provided, were not obligated to furnish security personnel,
patrols, lighting, gates or fences, or other forms of security unless required
by statute. Were not responsible for obtaining criminal-history checks on
any residents, occupants, guests, or contractors in the apartment community.
If you or any occupant or guest is affected by a crime, you must make a written
report to our representative and to the appropriate local law-enforcement
agency. You also must furnish us with the law-enforcement agencys
incident report number upon request.

a loud or obnoxious manner; disturbing or threatening the rights, comfort,


health, safety, or convenience of others (including our agents and employees)
in or near the apartment community; disrupting our business operations;
manufacturing, delivering, or possessing a controlled substance or drug
paraphernalia; engaging in or threatening violence; possessing a weapon
prohibited by state law; discharging a firearm in the apartment community;
displaying or possessing a gun, knife, or other weapon in the common area in
a way that may alarm others; storing anything in closets having gas appliances;
tampering with utilities or telecommunications; bringing hazardous materials
into the apartment community; using windows for entry or exit; heating the
apartment with a gas-operated cooking stove or oven; or injuring our reputation
by making bad faith allegations against us to others.
21.

22.

PARKING. We may regulate the time, manner, and place of parking all
cars, trucks, motorcycles, bicycles, boats, trailers, and recreational vehicles.
Motorcycles or motorized bikes may not be parked inside an apartment
or on sidewalks, under stairwells, or in handicapped parking areas. We
may have unauthorized or illegally parked vehicles towed or booted
according to state law at the owner or operators expense at any time if it:
(1) has a flat tire or is otherwise inoperable
(2) is on jacks, blocks or has wheel(s) missing
(3) takes up more than one parking space
(4) belongs to a resident or occupant who has surrendered or abandoned
the apartment
(5) is in a handicap space without the legally required handicap insignia
(6) is in a space marked for office visitors, managers, or staff
(7) blocks another vehicle from exiting
(8) is in a fire lane or designated no parking area
(9) is in a space marked for other resident(s) or apartment(s)
(10) is on the grass, sidewalk, or patio
(11) blocks garbage trucks from access to a dumpster, or
(12) has no current license, registration or inspection sticker, and we give
you at least 10 days notice that the vehicle will be towed if not removed.

25.

RELEASE OF RESIDENT. Unless youre entitled to terminate this Lease


Contract under paragraphs 10, 16, 23, 31 or 37, you wont be released from
this Lease Contract for any reasonincluding but not limited to voluntary
or involuntary school withdrawal or transfer, voluntary or involuntary job
transfer, marriage, separation, divorce, reconciliation, loss of co-residents,
loss of employment, bad health, death, or property purchase. You may also
have the right under Texas law to terminate the Lease Contract early
in certain situations involving family violence, certain sexual offenses
or stalking.
Death of Sole Resident. If you are the sole resident and die during the
Lease Contract term, the Lease Contract may be terminated without penalty
by an authorized representative of your estate with at least 30 days written
notice. Your estate will be liable for payment of rent until the latter of: (1)
the termination date, or (2) until all possessions in the apartment are
removed. Your estate will also be liable for all charges and damages to the
apartment until it is vacated, and any removal and storage costs.

23.

For
m
Form
valid for
members
only

MILITARY PERSONNEL CLAUSE. You may have the right under


Texas law to terminate the Lease Contract in certain situations involving
military deployment or transfer. You may terminate the Lease Contract
if you enlist or are drafted or commissioned in the U.S. Armed Forces.
You also may terminate the Lease Contract if:
(1)

(2)

you are (i) a member of the U.S. Armed Forces or reserves on active
duty or (ii) a member of the National Guard called to active duty
for more than 30 days in response to a national emergency declared
by the President; and
you (i) receive orders for permanent change-of-station, (ii) receive
orders to deploy with a military unit or as an individual in support
of a military operation for 90 days or more, or (iii) are relieved or
released from active duty.

26.

REQUESTS, REPAIRS, AND MALFUNCTIONS. If you or any occupant


needs to send a notice or requestfor example, for repairs, installations,
services, ownership disclosure or security-related mattersIT MUST BE
SIGNED AND IN WRITING to our designated representative (except in
case of fire, smoke, gas, explosion, overflowing sewage, uncontrollable running
water, electrical shorts, crime in progress, or fair housing accommodation or
modification).Ourwrittennotes on your oral request do not constitute a written
request from you.
Our complying with or responding to any oral request regarding security
or any other matters doesnt waive the strict requirement for written notices
under this Lease Contract. You must promptly notify us in writing of: water
leaks; mold; electrical problems; malfunctioning lights; broken or missing
locks or latches; and other conditions that pose a hazard to property, health, or
safety. We may change or install utility lines or equipment serving the apartment if the work is done reasonably without substantially increasing your
utility costs. We may turn off equipment and interrupt utilities as needed
to avoid property damage or to perform work. If utilities malfunction or are
damaged by fire, water, or similar cause, you must notify our representative
immediately. Air conditioning problems are normally not emergencies. If
air conditioning or other equipment malfunctions, you must notify us as soon
as possible on a business day. Well act with customary diligence to make
repairs and reconnections, taking into consideration when casualty insurance
proceeds are received. Rent will not abate in whole or in part.
If we believe that fire or catastrophic damage is substantial, or that
performance of needed repairs poses a danger to you, we may terminate
this Lease Contract by giving you at least 5 days written notice. We may
also remove personal property if it causes a health or safety hazard. If the
Lease Contract is so terminated, well refund prorated rent and all deposits,
less lawful deductions.

27.

ANIMALS. No animals (including mammals, reptiles, birds, fish, rodents,


amphibians, arachnids, and insects) are allowed, even temporarily, anywhere in
the apartment or apartment community unless weve so authorized in writing.
If we allow an animal, you must sign a separate animal addendum and,
except as set forth in the addendum, pay an animal deposit. We will
authorize an assistance or support animal for a disabled person but will
not require an animal deposit. The animal addendum includes
information governing animals, including assistance or service animals.
We may require a written statement from a qualified professional
verifying the need for such an animal. An animal deposit is considered
a general security deposit. You must not feed stray or wild animals.
If you or any guest or occupant violates animal restrictions (with or
without your knowledge), youll be subject to charges, damages, eviction,
and other remedies provided in this Lease Contract. If an animal has
been in the apartment at any time during your term of occupancy (with
or without our consent), well charge you for all cleaning and repair costs,
including defleaing, deodorizing, and shampooing. Initial and daily
animal-violation charges and animal-removal charges are liquidated damages
for our time, inconvenience, and overhead (except for attorneys fees and
litigation costs) in enforcing animal restrictions and rules. We may remove an

After you deliver to us your written termination notice, the Lease Contract
will be terminated under this military clause 30 days after the date on
which your next rental payment is due. You must furnish us a copy of
your military orders, such as permanent change-of-station orders, callup orders, or deployment orders or letter. Military permission for base
housing doesnt constitute a permanent change-of-station order. After
your move out, well return your security deposit, less lawful deductions.
For the purposes of this Lease Contract, orders described in (2) above will
only release the resident who qualifies under (1) and (2) above and
receives the orders during the Lease Contract term and such residents
spouse or legal dependents living in the residents household. A coresident who is not your spouse or dependent cannot terminate under
this military clause. Unless you state otherwise in paragraph 10, you
represent when signing this Lease Contract that: (1) you do not already
have deployment or change-of-station orders; (2) you will not be retiring
from the military during the Lease Contract term; and (3) the term of your
enlistment or obligation will not end before the Lease Contract term ends.
Liquidated damages for making a false representation of the above will
be the amount of unpaid rent for the remainder of the lease term when
and if you move out, less rents from others received in mitigation under
paragraph 32. You must immediately notify us if you are called to active
duty or receive deployment or permanent change-of-station orders.
24.

CONDITION OF THE PREMISES AND ALTERATIONS. You accept


the apartment, fixtures, and furniture as is, except for conditions materially
affecting the health or safety of ordinary persons. We disclaim all implied
warranties. Youll be given an Inventory & Condition form on or before
move-in. Within 48 hours after move-in, you must sign and note on the
form all defects or damage and return it to us. Otherwise, everything will
be considered to be in a clean, safe, and good working condition.
You must use customary diligence in maintaining the apartment and not
damaging or littering the common areas. Unless authorized by statute or by us
in writing, you must not do any repairs, painting, wallpapering, carpeting,
electrical changes, or otherwise alter our property. No holes or stickers are
allowed inside or outside the apartment. Well permit a reasonable number
of small nail holes for hanging pictures on sheetrock walls and grooves of
wood-paneled walls, unless our rules state otherwise. No water furniture,
washing machines, extra phone or television outlets, alarm systems, or lock
changes, additions, or rekeying is permitted unless allowed by statute or
weve consented in writing. You may install a satellite dish or antenna
provided you sign our satellite dish or antenna lease addendum which
complies with reasonable restrictions allowed by federal law. You agree not
to alter, damage, or remove our property, including alarm systems,
detection devices, furniture, telephone and television wiring, screens, locks,
and security devices. When you move in, well supply light bulbs for fixtures
we furnish, including exterior fixtures operated from inside the apartment;
after that, youll replace them at your expense with bulbs of the same type
and wattage. Your improvements to the apartment (whether or not we
consent) become ours unless we agree otherwise in writing.
We are committed to the principles of fair housing. In accordance with
fair housing laws, we will make reasonable accommodations to our rules,
policies, practices or services, and/or will allow reasonable modifications
under such laws to give persons with disabilities access to and use of this
apartment community. We may require you to sign an addendum
regarding the approval and implementation of such accommodations or
modifications, as well as restoration obligations, if any.

RESIDENT SAFETY AND LOSS. You and all occupants and guests must
exercise due care for your own and others safety and security, especially
in the use of smoke alarms and other detection devices, door and window
locks, and other safety or security devices. You agree to make every effort
to follow the Security Guidelines on page 5. Window screens are not for
security or keeping people from falling out.
Alarm and Detection Devices. Well furnish smoke alarms or other
detection devices required by statute or city ordinance, and well test them
and provide working batteries when you first take possession. After that,
you must pay for and replace batteries as needed, unless the law provides
otherwise. We may replace dead or missing batteries at your expense,
without prior notice to you. You must immediately report alarm or detector
malfunctions to us. Neither you nor others may disable alarms or detectors.
If you damage or disable the smoke alarm, or remove a battery without replacing it
with a working battery, you may be liable to us under Section 92.2611, Texas
Property Code for $100 plus one months rent, actual damages, and attorneys fees.
You also will be liable to us and others if you fail to report malfunctions, or any
loss, damage, or fines resulting from fire, smoke, or water. Upon request, we
will provide, as required by law, a smoke alarm capable of alerting a person with
a hearing-impairment disability.
Loss. Were not liable to any resident, guest, or occupant for personal injury
or damage, loss of personal property, or business or personal income from
any cause, including, but not limited to, fire, smoke, rain, flood, water
leaks, hail, ice, snow, lightning, wind, explosions, interruption of

YOUR INITIALS: _________, INITIALS OF OUR REPRESENTATIVE: __________

APARTMENT LEASE CONTRACT 2013, TEXAS APARTMENT ASSOCIATION, INC.

Appendix C to Austin Apartment Association's Motion for Injunction Pending Appeal

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unauthorized animals; disconnecting utilities involving bona fide
repairs, emergencies or construction; retrieving property owned or
leased by former residents; inspecting when immediate danger to
person or property is reasonably suspected; allowing persons to
enter as you authorized in your rental application (if you die, are
incarcerated, etc.); allowing entry by a law officer with a search or
arrest warrant, or in hot pursuit; showing apartment to prospective
residents (after move-out or vacate notice has been given); or showing
apartment to government representatives for the limited purpose of
determining housing and fire ordinance compliance, and to lenders,
appraisers, contractors, prospective buyers, or insurance agents.

unauthorized animal by (1) leaving, in a conspicuous place in the apartment,


a 24-hour written notice of intent to remove the animal, and (2) following the
procedures of paragraph 28. We may keep or kennel the animal or turn it over
to a humane society or local authority. When keeping or kenneling an animal,

we wont be liable for loss, harm, sickness, or death of the animal unless
due to our negligence. Well return the animal to you upon request if it has
not already been turned over to a humane society or local authority. You
must pay for the animals reasonable care and kenneling charges. We
have no lien on the animal for any purpose.
28. WHEN WE MAY ENTER. If you or any guest or occupant is present,
then repairers, servicers, contractors, our representatives, or other
persons listed in (2) below may peacefully enter the apartment at
reasonable times for the purposes listed in (2) below. If nobody is in the
apartment, then such persons may enter peacefully and at reasonable
times by duplicate or master key (or by breaking a window or other
means when necessary) if:
(1) written notice of the entry is left in a conspicuous place in the
apartment immediately after the entry; and
(2) entry is for: responding to your request; making repairs or
replacements; estimating repair or refurbishing costs; performing
pest control; doing preventive maintenance; checking for water
leaks; changing filters; testing or replacing detection or alarm
device(s) or batteries; retrieving unreturned tools, equipment, or
appliances; preventing waste of utilities; exercising our
contractual lien; leaving notices; delivering, installing,
reconnecting, or replacing appliances, furniture, equipment, or
security devices; removing or rekeying unauthorized security
devices; removing unauthorized window coverings; stopping
excessive noise; removing health or safety hazards (including
hazardous materials), or items prohibited under our rules; removing
perishable foodstuffs if your electricity is disconnected; removing

29. MULTIPLE RESIDENTS. Each resident is jointly and severally liable


for all Lease Contract obligations. If you or any guest or occupant
violates the Lease Contract or rules, all residents are considered to
have violated the Lease Contract. Our requests and notices (including
sale notices) to any resident constitute notice to all residents and
occupants. Notices and requests from any resident or occupant
constitute notice from all residents. Your notice of Lease Contract
termination may be given only by residents. In eviction suits, each resident
is considered the agent of all other residents in the apartment for service
of process. Any resident who defaults under this Lease Contract will
indemnify the non-defaulting residents and their guarantors.
Security deposit refund check and any deduction itemizations will
be by: (check one)
one check jointly payable to all residents and mailed to any
one resident we choose, OR
one check payable and mailed to ___________________________
_________________________________ (specify name of one resident).
If neither is checked, then the refund will be made in one check jointly
payable to all residents.

Replacements
30. REPLACEMENTS AND SUBLETTING. Replacing a resident,
subletting, or assignment is allowed only when we consent in writing. If
departing or remaining residents find a replacement resident acceptable
to us before moving out and we expressly consent to the replacement,
subletting, or assignment, then:
(1) a reletting charge will not be due;
(2) a reasonable administrative (paperwork) fee will be due, and a
rekeying fee will be due if rekeying is requested or required; and
(3) the departing and remaining residents will remain liable for all Lease
Contract obligations for the rest of the original Lease Contract term.

Procedures for Replacement. If we approve a replacement resident,


then, at our option: (1) the replacement resident must sign this Lease
Contract with or without an increase in the total security deposit; or
(2) the remaining and replacement residents must sign an entirely new
Lease Contract. Unless we agree otherwise in writing, your security
deposit will automatically transfer to the replacement resident as of the
date we approve. The departing resident will no longer have a right to
occupancy or a security deposit refund, but will remain liable for the
remainder of the original Lease Contract term unless we agree otherwise
in writingeven if a new Lease Contract is signed.

Responsibilities of Owner and Resident


31. RESPONSIBILITIES OF OWNER. Well act with customary diligence
to:
(1) keep common areas reasonably clean, subject to paragraph 25;
(2) maintain fixtures, hot water, heating, and A/C equipment;
(3) substantially comply with all applicable laws regarding safety,
sanitation, and fair housing; and
(4) make all reasonable repairs, subject to your obligation to pay
for damages for which you are liable.
If we violate any of the above, you may possibly terminate this Lease
Contract and exercise other remedies under Texas Property Code
Section 92.056 by following this procedure:
(a) all rent must be current and you must make a written request
for repair or remedy of the conditionafter which well have a
reasonable time for repair or remedy;
(b) if we fail to do so, you must make a second written request for
the repair or remedy (to make sure that there has been no
miscommunication between us)after which well have a
reasonable time for the repair or remedy; and
(c) if the repair or remedy still hasnt been accomplished within that
reasonable time period, you may immediately terminate this
Lease Contract by giving us a final written notice. You also may
exercise other statutory remedies, including those under Texas
Property Code Section 92.0561.
Instead of giving the two written requests referred to above, you may
give us one request by certified mail, return receipt requested, or by
registered mailafter which we will have a reasonable time for repair
or remedy. Reasonable time takes into account the nature of the
problem and the reasonable availability of materials, labor, and
utilities. Your rent must be current at the time of any request. We will
refund security deposits and prorated rent as required by law.
32. DEFAULT BY RESIDENT. Youll be in default if: (1) you dont pay
rent or other amounts that you owe on time; (2) you or any guest or
occupant violates this Lease Contract, apartment rules, or fire, safety,
health, or criminal laws, regardless of whether or where arrest or
conviction occurs; (3) you abandon the apartment; (4) you give
incorrect or false answers in a rental application; (5) you or any
occupant is arrested, charged, detained, convicted, or given deferred
adjudication or pretrial diversion for (i) a felony offense involving
actual or potential physical harm to a person, or involving possession,
manufacture, or delivery of a controlled substance, marihuana, or
drug paraphernalia as defined in the Texas Controlled Substances
Act, or (ii) any sex-related crime, including a misdemeanor; (6) any
illegal drugs or paraphernalia are found in your apartment; or (7) you
or any occupant, in bad faith, makes an invalid habitability complaint
to an official or employee of a utility company or the government.
Eviction. If you default or holdover, we may end your right of occupancy
by giving you a 24-hour written notice to vacate. Notice may be by:
(1) regular mail; (2) certified mail, return receipt requested; (3) personal
delivery to any resident; (4) personal delivery at the apartment to any
occupant over 16 years old; or (5) affixing the notice to the inside of the
apartments main entry door. Notice by mail only will be considered
delivered on the earlier of: (1) actual delivery, or (2) three days (not
counting Sundays or federal holidays) after the notice is deposited
in the U.S. Postal Service with postage. Termination of your possession
rights or subsequent reletting doesnt release you from liability for future
rent or other Lease Contract obligations. After giving notice to vacate or
APARTMENT LEASE CONTRACT

filing an eviction suit, we may still accept rent or other sums due; the filing
or acceptance doesnt waive or diminish our right of eviction, or any other
contractual or statutory right. Accepting money at any time doesnt waive
our right to damages; past or future rent or other sums; or to continue with
eviction proceedings.
Acceleration. Unless we elect not to accelerate rent, all monthly rent for
the rest of the Lease Contract term or renewal period will be accelerated
automatically without notice or demand (before or after acceleration) and
will be immediately due and delinquent if, without our written consent:
(1) you move out, remove property in preparing to move out, or give oral
or written notice (by you or any occupant) of intent to move out before the
Lease Contract term or renewal period ends; and (2) youve not paid all
rent for the entire Lease Contract term or renewal period. Such conduct is
considered a default for which we need not give you notice. Remaining
rent also will be accelerated if youre judicially evicted or move out when
we demand because youve defaulted. Acceleration is subject to our
mitigation obligations below.
Holdover. You or any occupant, invitee, or guest must not hold over
beyond the date contained in your move-out notice or our notice to
vacate (or beyond a different move-out date agreed to by the parties
in writing). If a holdover occurs, then: (1) holdover rent is due in
advance on a daily basis and may become delinquent without notice
or demand; (2) rent for the holdover period will be increased by 25%
over the then-existing rent, without notice; (3) youll be liable to us
(subject to our mitigation duties) for all rent for the full term of the
previously signed Lease Contract of a new resident who cant occupy
because of the holdover; and (4) at our option, we may extend the
Lease Contract termfor up to one month from the date of notice of
Lease Contract extensionby delivering written notice to you or your
apartment while you continue to hold over.
Other Remedies. We may report unpaid amounts to credit agencies.
If you default and move out early, you will pay us any amounts stated
to be rental discounts or concessions agreed to in writing, in addition to
other sums due. Upon your default, we have all other legal remedies,
including Lease Contract termination and statutory lockout under
Section 92.0081, Texas Property Code, except as lockouts and liens
are prohibited by Section 2306.6736, Texas Government Code, for
owners supported by housing tax credit allocations. A prevailing
party may recover reasonable attorneys fees and all other litigation
costs from the non-prevailing parties, except a party may not recover
attorneys fees and litigation costs in connection with a party's claims
seeking personal injury, sentimental, exemplary or punitive damages.
We may recover attorneys fees in connection with enforcing our rights
under this Lease Contract. You agree that late charges are liquidated
damages and a reasonable estimate of such damages for our time,
inconvenience, and overhead associated with collecting late rent (but
are not for attorneys fees and litigation costs). All unpaid amounts you
owe, including judgments, bear 18% interest per year from due date,
compounded annually. You must pay all collection-agency fees if you
fail to pay all sums due within 10 days after we mail you a letter
demanding payment and stating that collection agency fees will be
added if you dont pay all sums by that deadline.
Mitigation of Damages. If you move out early, youll be subject to
paragraph 11 and all other remedies. Well exercise customary diligence
to relet and minimize damages. Well credit all subsequent rent that we
actually receive from subsequent residents against your liability for pastdue and future rent and other sums due.

2013, TEXAS APARTMENT ASSOCIATION, INC.

Appendix C to Austin Apartment Association's Motion for Injunction Pending Appeal

PAGE 4 OF 6

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 65 of 70


General Clauses
33. MISCELLANEOUS. Neither we nor any of our representatives have made
any oral promises, representations, or agreements. This Lease Contract is the
entire agreement between you and us. Our representatives (including
management personnel, employees, and agents) have no authority to waive,
amend, or terminate this Lease Contract or any part of it, unless in writing, and
no authority to make promises, representations, or agreements that impose
security duties or other obligations on us or our representatives unless in
writing. No action or omission by us will be considered a waiver of our
rights or of any subsequent violation, default, or time or place of
performance. Our not enforcing or belatedly enforcing written-notice
requirements, rental due dates, acceleration, liens, or other rights isnt a
waiver under any circumstances. Except when notice or demand is
required by statute, you waive any notice and demand for performance
from us if you default. Written notice to or from our managers constitutes
notice to or from us. Any person giving a notice under this Lease Contract
should retain a copy of the memo, letter, or fax that was given, as well as
any fax transmittal verification. Fax or electronic signatures are binding.
All notices must be signed. Notices may not be given by email or other
electronic transmission.
Exercising one remedy wont constitute an election or waiver of other
remedies. Insurance subrogation is waived by all parties. All
remedies are cumulative. No employee, agent, or management
company is personally liable for any of our contractual, statutory,
or other obligations merely by virtue of acting on our behalf. This
Lease Contract binds subsequent owners. Neither an invalid clause
nor the omission of initials on any page invalidates this Lease
Contract. All notices and documents may be in English and, at our
option, in any language that you read or speak. All provisions
regarding our non-liability and non-duty apply to our employees,
agents, and management companies. This Lease Contract is
subordinate to existing and future recorded mortgages, unless the
owners lender chooses otherwise. All Lease Contract obligations
must be performed in the county where the apartment is located.
We may deactivate or not install keyless bolting devices on your doors
if: (1) you or an occupant in the dwelling is over 55 or disabled, and (2)
the requirements of Section 92.153(e) or (f), Texas Property Code are
satisfied.

Television channels that are provided may be changed during the


Lease Contract term if the change applies to all residents. Utilities
may be used only for normal household purposes and must not be
wasted. If your electricity is ever interrupted, you must use only
battery-operated lighting.
34. PAYMENTS. Payment of all sums is an independent covenant. When
we receive money, other than sale proceeds under paragraph 13 or
utility payments subject to government regulation, we may apply it at
our option and without notice first to any of your unpaid obligations,
then to current rent. We may do so regardless of notations on checks
or money orders and regardless of when the obligations arose. All
sums other than rent are due upon our demand. After the due date, we
do not have to accept the rent or any other payments.
35. TAA MEMBERSHIP. We represent that, at the time of signing this
Lease Contract: (1) we; (2) the management company that represents
us; or (3) any locator service that procured you is a member in good
standing of both the Texas Apartment Association and the affiliated
local apartment association for the area where the apartment is
located. The member is either an owner/management company
member or an associate member doing business as a locator service
(whose name and address must be disclosed on page 6). If not, the
following applies: (1) this Lease Contract is voidable at your option
and is unenforceable by us (except for property damages); and (2)
we may not recover past or future rent or other charges. The above
remedies also apply if both of the following occur: (1) the Lease
Contract is automatically renewed on a month-to-month basis two
or more times after membership in TAA and the local association has
lapsed; and (2) neither the owner nor the management company is a
member of TAA and the local association at the time of the third
automatic renewal. A signed affidavit from the local affiliated
apartment association which attests to non-membership when the
Lease Contract or renewal was signed will be conclusive evidence
of non-membership. Governmental entities may use TAA forms if TAA
agrees in writing.

Security Guidelines for Residents


36. SECURITY GUIDELINES. We care about your safety and that of other
occupants and guests. No security system is failsafe. Even the best
system cant prevent crime. Always act as if security systems dont exist
since they are subject to malfunction, tampering, and human error. We
disclaim any express or implied warranties of security. The best safety
measures are the ones you perform as a matter of common sense and habit.
Inform all other occupants in your apartment, including any children
you may have, about these guidelines. We recommend that all residents
and occupants use common sense and follow crime prevention tips,
such as those listed below:
In case of emergency, call 911. Always report emergencies to
authorities first and then contact the management.
Report any suspicious activity to the police first, and then follow
up with a written notice to us.
Know your neighbors. Watching out for each other is one of the
best defenses against crime.
Always be aware of your surroundings and avoid areas that are
not well-traveled or well-lit.
Keep your keys handy at all times when walking to your car or
home.
Do not go inside if you arrive home and find your door open. Call
the police from another location and ask them to meet you before
entering.
Make sure door locks, window latches and sliding glass doors
are properly secured at all times.
Use the keyless deadbolt in your apartment when you are at
home.
Dont put your name or address on your key ring or hide extra keys in
obvious places, like under a flower pot. If you lose a key or have concerns
about key safety, we will rekey your locks at your expense, in accordance
with paragraph 9 of the Lease Contract.

Check the door viewer before answering the door. Dont open the
door if you dont know the person or have any doubts. Children who
are old enough to take care of themselves should never let anyone
inside when home without an adult.
Regularly check your security devices, smoke alarms and other
detection devices to make sure they are working properly.
Alarm and detection device batteries should be tested monthly
and replaced at least twice a year.
Immediately report in writing (dated and signed) to us any
needed repairs of security devices, doors, windows, smoke
alarms and other detection devices, as well as any other
malfunctioning safety devices on the property, such as broken
access gates, burned out exterior lights, etc.
If your doors or windows are not secure due to a malfunction
or break-in, stay with a friend or neighbor until the problem is
fixed.
When you leave home, make sure someone knows where youre
going and when you plan to be back.
Lock your doors and leave a radio or TV playing softly while
youre gone. Close curtains, blinds and window shades at night.
While gone for an extended period, secure your home and use
lamp timers. Also stop all deliveries (such as newspaper and
mail) or have these items picked up daily by a friend.
Know at least two exit routes from your home, if possible.
Dont give entry keys, codes or gate access cards to anyone.
Always lock the doors on your car, even while driving. Take the
keys and remove or hide any valuables. Park your vehicle in a
well-lit area.
Check the backseat before getting into your car. Be careful
stopping at gas stations or automatic-teller machines at night
or anytime when you suspect danger.
There are many other crime prevention tips readily available from
police departments and others.

When Moving Out


37. MOVE-OUT NOTICE. Before moving out, you must give our
representative advance written move-out notice as provided below.
Your move-out notice will not release you from liability for the full
term of the Lease Contract or renewal term. You will still be liable
for the entire Lease Contract term if you move out early (paragraph
22) except under paragraphs 10, 16, 22, 23 or 31. YOUR MOVEOUT NOTICE MUST COMPLY WITH EACH OF THE
FOLLOWING:
We must receive advance written notice of your move-out date.
The advance notice must be at least the number of days of notice
required in paragraph 3 or in special provisionseven if the
Lease Contract has become a month-to-month lease. If a moveout notice is received on the first, it will suffice for move-out on
the last day of the month of intended move-out, provided that
all other requirements below are met.
The move-out date in your notice [check one]: must be the last
day of the month; or may be the exact day designated in your
notice. If neither is checked, the second applies.
APARTMENT LEASE CONTRACT

Your move-out notice must be in writing. Oral move-out notice


will not be accepted and will not terminate your Lease Contract.
Your move-out notice must not terminate the Lease Contract
sooner than the end of the Lease Contract term or renewal period.
If we require you to give us more than 30 days written notice to
move-out before the end of the Lease Contract term, we will give
you a written reminder not less than 5 days nor more than 90 days
before your deadline for giving us your written move-out notice.
If we fail to provide a reminder notice, 30 days written notice to
move-out is required.
YOUR NOTICE IS NOT ACCEPTABLE IF IT DOES NOT COMPLY
WITH ALL OF THE ABOVE. We recommend you use our written
move-out form to ensure you provide the information needed. You
must obtain from us written acknowledgment that we received
your move-out notice. If we terminate the Lease Contract, we must
give you the same advance noticeunless you are in default.

2013, TEXAS APARTMENT ASSOCIATION, INC.

Appendix C to Austin Apartment Association's Motion for Injunction Pending Appeal

PAGE 5 OF 6

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 66 of 70


38. MOVE-OUT PROCEDURES. The move-out date cant be changed
unless we and you both agree in writing. You wont move out before
the Lease Contract term or renewal period ends unless all rent for the
entire Lease Contract term or renewal period is paid in full. Early
move-out may result in reletting charges and acceleration of future
rent under paragraphs 11 and 32. Youre prohibited by law from
applying any security deposit to rent. You wont stay beyond the
date you are supposed to move out. All residents, guests, and
occupants must surrender or abandon the apartment before the 30day period for deposit refund begins. You must give us and the U.S.
Postal Service, in writing, each residents forwarding address.
3 9 . CLEANING. You must thoroughly clean the apartment, including
doors, windows, furniture, bathrooms, kitchen appliances, patios,
balconies, garages, carports, and storage rooms. You must follow
move-out cleaning instructions if they have been provided. If you
dont clean adequately, youll be liable for reasonable cleaning
chargesincluding charges for cleaning carpets, draperies, furniture,
walls, etc. that are soiled beyond normal wear (that is, wear or soiling
that occurs without negligence, carelessness, accident, or abuse).
4 0 . MOVE-OUT INSPECTION. You should meet with our
representative for a move-out inspection. Our representative has no
authority to bind or limit us regarding deductions for repairs, damages,
or charges. Any statements or estimates by us or our representative
are subject to our correction, modification, or disapproval before final
refunding or accounting.
41. SECURITY DEPOSIT DEDUCTIONS AND OTHER CHARGES.
Youll be liable for the following charges, if applicable: unpaid rent;
unpaid utilities; unreimbursed service charges; repairs or damages
caused by negligence, carelessness, accident, or abuse, including
stickers, scratches, tears, burns, stains, or unapproved holes;
replacement cost of our property that was in or attached to the
apartment and is missing; replacing dead or missing alarm or
detection device batteries at any time; utilities for repairs or cleaning;
trips to let in company representatives to remove your telephone,
Internet, or television services or rental items (if you so request or have
moved out); trips to open the apartment when you or any guest or
occupant is missing a key; unreturned keys; missing or burned-out
light bulbs; removing or rekeying unauthorized security devices or
alarm systems; agreed reletting charges; packing, removing, or
storing property removed or stored under paragraph 13; removing
or booting illegally parked vehicles; special trips for trash removal
caused by parked vehicles blocking dumpsters; false security-alarm

charges unless due to our negligence; animal-related charges under


paragraphs 6 and 27; government fees or fines against us for
violation (by you, your occupants, or guests) of local ordinances
relating to alarms and detection devices, false alarms, recycling, or
other matters; late-payment and returned-check charges; a charge
(not to exceed $100) for our time and inconvenience in our lawful
removal of an animal or in any valid eviction proceeding against you,
plus attorneys fees, court costs, and filing fees actually paid; and
other sums due under this Lease Contract.
Youll be liable to us for: (1) charges for replacing all keys and access
devices referenced in paragraph 5 if you fail to return them on or before
your actual move-out date; (2) accelerated rent if you have violated
paragraph 32; and (3) a reletting fee if you have violated paragraph 11.
42. DEPOSIT RETURN, SURRENDER, AND ABANDONMENT.
Well mail you your security deposit refund (less lawful
deductions) and an itemized accounting of any deductions no later
than 30 days after surrender or abandonment, unless statutes
provide otherwise.
You have surrendered the apartment when: (1) the move-out date has
passed and no one is living in the apartment in our reasonable
judgment; or (2) apartment keys and access devices listed in paragraph
5 have been turned in to uswhichever date occurs first.
You have abandoned the apartment when all of the following have
occurred: (1) everyone appears to have moved out in our reasonable
judgment; (2) clothes, furniture, and personal belongings have been
substantially removed in our reasonable judgment; (3) youve been
in default for non-payment of rent for 5 consecutive days, or water,
gas, or electric service for the apartment not connected in our name
has been terminated or transferred; and (4) youve not responded for
2 days to our notice left on the inside of the main entry door, stating
that we consider the apartment abandoned. An apartment is also
abandoned 10 days after the death of a sole resident.
Surrender, abandonment, or judicial eviction ends your right of
possession for all purposes and gives us the immediate right to: clean
up, make repairs in, and relet the apartment; determine any security
deposit deductions; and remove property left in the apartment.
Surrender, abandonment, and judicial eviction affect your rights to
property left in the apartment (paragraph 13), but do not affect our
mitigation obligations (paragraph 32).

For
m
Form
valid for
members
only

Signatures, Originals and Attachments


43. ORIGINALS AND ATTACHMENTS. This Lease Contract has
been executed in multiple originals, each with original signatures
one for you and one or more for us. Our rules and community
policies, if any, will be attached to the Lease Contract and given to
you at signing. When an Inventory and Condition form is completed,
both you and we should retain a copy. The items checked below are
attached to and become a part of this Lease Contract and are binding
even if not initialed or signed.
Access Gate Addendum
Additional Special Provisions
Allocation Addendum for: electricity water gas
central system costs
trash/recycling
cable/satellite
stormwater/drainage services/government fees
Animal Addendum
Apartment Rules or Community Policies
Asbestos Addendum (if asbestos is present)
Bed Bug Addendum
Early Termination Addendum
Enclosed Garage, Carport or Storage Unit Addendum
Intrusion Alarm Addendum
Inventory & Condition Form
Lead Hazard Information and Disclosure Addendum
Lease Contract Guaranty (______ guaranties, if more than one)
Legal Description of Apartment (optional, if rental term longer than one year)
Military SCRA Addendum
Mold Information and Prevention Addendum
Move-Out Cleaning Instructions
Notice of Intent to Move Out Form
Parking Permit or Sticker (quantity:______)
Rent Concession Addendum
Renters or Liability Insurance Addendum
Repair or Service Request Form
Satellite Dish or Antenna Addendum
TCEQ Tenant Guide to Water Allocation
Utility Submetering Addendum for: electricity water gas
Other _________________________________________________________
Other _________________________________________________________
Name, address and telephone number of locator service (if applicable
must be completed to verify TAA membership under paragraph 35):
_________________________________________________________________

You are legally bound by this document.


Please read it carefully.

Before submitting a rental application


or signing a Lease Contract, you may take a copy
of these documents to review and/or consult an attorney.

Additional provisions or changes may be made


in the Lease Contract if agreed to in writing by all parties.
You are entitled to receive an original of this Lease Contract
after it is fully signed. Keep it in a safe place.
Resident or Residents (all sign below)
_________________________________________________________________
Date signed
_________________________________________________________________
Date signed
_________________________________________________________________
Date signed
_________________________________________________________________
Date signed
Owner or Owners Representative (signing on behalf of owner)
_________________________________________________________________________________________________________________
Address and phone number of owners representative for notice purposes
_________________________________________________________________

______________________________________________________________

______________________________________________________________________________
After-hours phone number____________________________________________
(Always call 911 for police, fire or medical emergencies.)

_________________________________________________________________
_________________________________________________________________
APARTMENT LEASE CONTRACT

Date form is filled out (same as on top of page 1) ___________________

TAA Official Statewide Form 13-A/B-1/B-2; Revised October, 2013; Copyright 2013, Texas Apartment Association, Inc.

Appendix C to Austin Apartment Association's Motion for Injunction Pending Appeal

PAGE 6 OF 6

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 67 of 70


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Appendix D to Austin Apartment Association's
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1 of 4

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 68 of 70


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Appendix D to Austin Apartment Association's
Motion for Injunction Pending Appeal

2 of 4

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 69 of 70

e. Protections for Victims of Abuse.



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Appendix D to Austin Apartment Association's
Motion for Injunction Pending Appeal

3 of 4

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 70 of 70




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Lease7KHZULWWHQDJUHHPHQWEHWZHHQWKHRZQHUDQGWKHWHQDQWIRUWKH
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Rent to owner7KHWRWDOPRQWKO\UHQWSD\DEOHWRWKHRZQHUIRUWKH
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Section 86HFWLRQRIWKH8QLWHG6WDWHV+RXVLQJ$FWRI 
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 Notices

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 Definitions

Contract unit7KHKRXVLQJXQLWUHQWHGE\WKHWHQDQWZLWKDVVLVWDQFH
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form HUD-52641-A (8/2009)
ref Handbook 7420.8

Previous editions are obsolete


Appendix D to Austin Apartment Association's
Motion for Injunction Pending Appeal

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