Texas cities should place derelict apartments in receivership

Heather K. Way, director of the Community Development Law Clinic at the University of Texas School of Law, read my comments about Mayor White’s recent efforts to stop a Houston landlord from abandoning 1000 low-income renters living in a run down Houston apartment project. Her reaction was that Houston needed to more aggressively use receivership provisions in state law to deal with irresponsible apartment owners.

Here are Heather’s comments…

As Houston struggles to fix its apartment habitability crisis, it should start using its receivership powers. More aggressive use of receivership could prevent future deaths and other tragedies in these complexes from occurring.

Some Background: Receivership is a critical tool used around the country to repair severely blighted multifamily properties. Receivership gives cities and community-based nonprofits the means by which to address these problem properties when the property owner has abandoned his or her responsibilities as an owner and, as a result, the properties are creating an imminent risk of harm to the tenants and the surrounding community.

When a property owner refuses to comply with court orders to repair a severely dilapidated property, the city can ask the court to appoint someone, under Chapter 214 of the Local Government Code, to step into the shoes of the owner and bring a property back into compliance with health and safety codes. After a finding by a judge that the property is posing an imminent risk of harm to the tenants or surrounding community, the judge can appoint the receiver to take control and repair the property. The receiver is able to recoup its costs in the form of a lien placed on the property. If the owner fails to pay the costs of repairing the property, the court can order a sale of the property.

Dallas is the only city we are aware of that has been exercising its receivership powers. In at least three instances, the city was able to recently appoint a receiver to successfully repair or demolish apartments in deplorable condition. Other cities in Texas should look to what Dallas is doing. Ohio, Baltimore, and Illinois are also doing innovative things with receivership.

The Clinic is in the process of drafting improvements to the Texas receivership laws that would increase nonprofit engagement in the receivership process and expand the usefulness of this important tool. We welcome input from everyone.

Our Community Development Clinic has also developed a comprehensive manual of best practices and tools to deal with blighted and abandoned properties, that includes a discussion of receivership and how it can be used under Texas law and is used in other states. The manual is available on our website at: http://www.utexas.edu/law/academics/clinics/community/workhighlights.php. We prepared this for a community group in Dallas, but we hope others in Texas can utilize the tools in this manual as well.