BRIEFCASE ARTICLE – NOVEMBER 2020 (Apartment Association of Greater Dallas)

TEXAS SUPREME COURT ESTABLISHES

THE TEXAS EVICTION DIVERSION PROGRAM (TEDP)

By Gregory T. Meyer

The Law Firm of Meyer & Colegrove, PLLC

            On September 25, 2020 Governor Greg Abbott announced the allocation of over $171 million in funding from the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to be used primarily for rental assistance for Texans who are at risk of becoming homeless due to eviction.  On the same day, the Texas Supreme Court issued its Twenty-Seventh Emergency Order Regarding the Covid-19 State of Disaster (27^th Emergency Order). The 27^th Emergency Order established the Texas Eviction Diversion Program (TEDP).  This article highlights the provisions of the 27^th Emergency Order based on information available as of the date of writing (October 2, 2020).

            TEDP seeks to reduce the number of evictions by enabling landlords and tenants to agree upon a resolution of non-payment of rent issues. The following procedures are set forth in the 27^th Emergency Order with respect to TEDP.

• Eligibility for rental assistance under TEDP will be determined by the Texas Department of Housing and Community Affairs (TDHCA). Note: as of this writing, the eligibility standards and the application process had not been published by TDHCA.
• In any eviction proceeding to recover possession of residential property based, in whole or in part, on nonpayment of rent:
  • The eviction petition must state that the plaintiff (landlord) has reviewed the information about TEDP available at: www.txcourts.gov/eviction-diversion;
  • The citation served on the defendant (tenant) must include:
    • the following statement: “You may be able to stop your eviction if you and your landlord agree to participate in the Texas Eviction Diversion Program. At your trial, the court will tell you about the Program and ask if you are interested in participating.  Find out more about the Program in the attached brochure, titled State of Texas Eviction Diversion Program, and at  txcourts.gov/eviction-diversion.”; and
    • a copy of the informational brochure, styled the State of Texas Eviction Diversion Program, prepared by the Texas Department of Housing and Community Affairs.

• At the eviction trial, the judge must:
  • discuss the Texas Eviction Diversion Program with the plaintiff and defendant;
  • ask the plaintiff and defendant whether they are interested in participating in the program; and
  • if the plaintiff and defendant both express an interest in participating in the program:
    • abate the eviction action for 60-days;
    • make all court records relating to the eviction confidential so as to prohibit disclosure to the public; and
    • inform the parties of certain reinstatement and dismissal procedures.
  • To reinstate an eviction that had been previously abated, the plaintiff (landlord) must file a written motion to reinstate with the court within the 60-day abatement period and serve a copy of the motion on the defendant (tenant). Upon the filing and service of the motion, the judge must sign and serve a written order that:
    • reinstates the eviction action;
    • sets the eviction action for trial as soon as practicable, but no more than 21 days after the date the order is signed;
    • states the procedures for the action to proceed; and
    • makes all court records relating to the eviction public.
  • If the plaintiff (landlord) does not file and serve a written motion to reinstate an action that had been abated within the 60-day abatement period, the judge must dismiss the action, including any claims that do not involve the nonpayment of rent, with prejudice. All court records relating to the dismissed action must remain confidential.
  • The plaintiff (landlord) is not prohibited from filing an action for eviction based on future events or acts that are an independent basis for eviction.
  • The order is effective as of October 12, 2020 for certain pilot counties proscribed by the Office of Court Administration, and as of November 9, 2020, for all other counties. The order expires on December 18, 2020, unless extended by the Texas Supreme Court.  Note: as of the writing of this article the pilot counties had not been identified.

Key Takeaways:

1. Only Available for Residential Evictions Based on Nonpayment of Rent. TEDP only applies to evictions based on nonpayment of rent.  Other types of eviction cases are not program eligible.  Also, only residential property is program eligible.  Commercial property is not.
2. TEDP is Voluntary. Both the landlord and the tenant must agree to participate in the program.  A court cannot compel the parties into the program.
3. The Order Imposes Additional Informational Requirements that Must be Included in the Eviction Petition. The information mandated to be included on the eviction petition by the 27^th Emergency Order is in addition to all other recently mandated form requirements previously ordered by the Texas Supreme Court. It is important to ensure the form of the eviction petition is proper.  Failing to include required information will most likely result in case dismissal.
4. Program Eligibility Requirements are Unknown. Without knowing the eligibility requirements for TDEP or the extent of the application process,  it is difficult to know whether participation in the program will be worthwhile for landlords or not. 
5. Sixty-Day Resolution Period. The program procedure allows the parties 60 days to reach some type of resolution of the nonpayment of rent issues through the use of government allocated rental assistance funds.
6. Reinstatement Must be Timely Requested. If for some reason the parties are not able to agree to a resolution and the landlord wishes to then proceed with eviction, the landlord must file a written motion to reinstate the case within the 60-day abatement period.  Justice Courts may publish forms for such a motion but before proceeding seek the advice of competent legal counsel.
7. Consequences of Failing to Timely Request Reinstatement. The consequences for failing to timely file a motion to reinstate are severe.  If a landlord wishes to reinstate an eviction case but fails to timely file and serve a motion to reinstate the case within the 60-day abatement period, the eviction case, along with any claims that were asserted in the eviction petition, including those that did not involve nonpayment of rent are dismissed WITH PREJUDICE, meaning they can never be the subject of another action against the tenant ever.  So, any claim for months of past due rent along with any other non-monetary default claims that were alleged in the eviction petition as a basis to terminate a tenant's possessory rights are gone forever.  A landlord will have to wait for an entirely new future event of default by the tenant before being able to initiate another eviction case. 

Like everything else with Covid-19, each day is a new day.  Stay tuned.  More will, no doubt, be forthcoming.