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Texas Association of Realtors' Sample Lease has the following:

B. If Tenant fails to timely pay all amounts due under this lease or otherwise fails to comply with this lease, Tenant will be in default and:

...

(2) all unpaid rents which are payable during the remainder of this lease or any renewal period will be accelerated without notice or demand;


However, the standard Texas Apartment Association (TAA) apartment lease contract is explicitly unforgiving and unconditional, to the point of being quite unreasonable and unconscionable about the application of acceleration, something I've hardly seen on any other lease anywhere:

11. UNLAWFUL EARLY MOVE-OUT; RELETTING CHARGE. You’ll 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

...

14. FAILING TO PAY FIRST MONTH’S RENT . If you don’t pay the first month’s rent when or before the Lease Contract begins, all future rent will be automatically accelerated without notice and immediately due.

...

32. DEFAULT BY RESIDENT. You’ll be in default if: (1) you don’t 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; ...

Acceleration. 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) you’ve 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 you’re judicially evicted or move out when we demand because you’ve defaulted. Acceleration is subject to our mitigation obligations below.

...

38. MOVE-OUT PROCEDURES. The move-out date can’t be changed unless we and you both agree in writing. You won’t 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.

Is this at all legal?

For example, if someone signs a 15 month lease, but has to move after a couple of months, are they really supposed to shell out 13 × the monthly rent prior to being able to assign the lease to someone else, and/or until some such someone else is actually found and takes over the lease?

If the provision is not actually enforceable in Texas, for example, due to damage mitigation provision, or due to the late fee statutes, why is it so prevalent in all residential leases in Texas, especially by all TAA members?

  • Please specify the city as well. – Stephan Branczyk Oct 26 '15 at 4:19
  • @StephanBranczyk, do you have reason to believe state law does not preempt any possible city or county laws on the matter? See law.stackexchange.com/questions/717/…, which is prompted by the fact that a lot of municipal code about landlord-tenant relations in various cities in California is unenforceable, e.g., California state law most likely preempts San Jose's 90-day notice code – cnst Oct 26 '15 at 4:32
  • No, I actually know very little about this, but a more exact location could let us find you a place where you could get free legal advice on the matter. – Stephan Branczyk Oct 26 '15 at 6:16
3

Yes, acceleration clauses in residential leases have been enforced by Texas courts. However, whether the acceleration clause quoted in your question will be enforced is an issue of fact for which there can be no definitive answer at this time.

Acceleration Clauses are Valid in Texas

Acceleration clauses have been recognized as valid by Texas courts.

In Rem Servs. v. Zaheer, a Texas Court of Appeals upheld a judgment by the trial court "award[ing] the landlord $24,000 in damages, representing the four months of accelerated rents on his breach of contract claim."

See Rem Servs., Inc. v. Zaheer, No. 14-12-00724-CV (Tex. App. Apr. 4, 2013).

Also, in Williams v. Colthurst, the court implied that the damages given by the trial court included an accelerated rent provision:

Additionally, the trial court had previously determined that the tenants owed unpaid rent and late fees of $8,850. The lease provided that the landlords could deduct unpaid or accelerated rent and late fees from the security deposit.

Unfortunately I couldn't find the trial court opinion to ensure that accelerated rent was included in the $8,850.

See Williams v. Colthurst, 253 S.W.3d 353 (Tex. App. 2008).

Limitations on Acceleration Clauses

There are several sections of the Texas Property Code that may mitigate the use of an acceleration clause.

First, a landlord cannot charge a tenant a fee for failure to pay rent unless the fee is a reasonable estimate of uncertain damages to the landlord that are incapable of precise calculation and result from late payment of rent." See § 92.019(a)(2) of the Texas Property Code:

(a) A landlord may not charge a tenant a late fee for failing to pay rent unless:

(1) notice of the fee is included in a written lease;

(2) the fee is a reasonable estimate of uncertain damages to the landlord that are incapable of precise calculation and result from late payment of rent; and

(3) the rent has remained unpaid one full day after the date the rent was originally due.

Further, landlords have a duty to mitigate damages. See § 91.006 of the Texas Property Code:

(a) A landlord has a duty to mitigate damages if a tenant abandons the leased premises in violation of the lease.

(b) A provision of a lease that purports to waive a right or to exempt a landlord from a liability or duty under this section is void.

This duty requires that the landlord use "objectively reasonable efforts to re-lease the premises when the tenant vacates in breach of the lease." See Rem Servs., Inc. v. Zaheer (citing Austin Hill County Realty, Inc. v. Palisades Plaza, Inc., 948 S.W.2d 293 (Tex. 1997); White v. Harrison, 390 S.W.3d 666 (Tex. App. 2012)).

But it's important to note that the tenant bears the burden of proving both that the landlord did not mitigate his damages and the amount by which the landlord could have mitigated his damages. This is likely a difficult burden. In Rem Servs. v. Zaheer, the court decided that the landlord did not breach his duty to mitigate even though he did not list the property for rent during the four months remaining on the lease.

Disclaimer

This was the only case and statutory law on point that I found; I may have missed some. If you are referencing a real lease, I recommend that you discuss this matter with a real estate lawyer licensed to practice law in Texas.

  • Thanks for your answer! Rem Servs. v. Zaheer provides some interesting insights, however, it appears that the acceleration part has never really come into test, because they simply stopped paying rent at all, and weren't at all disputing that they only had to pay it monthly. It is, however, indeed somewhat surprising that full all-rent-turned-damages award was granted covering all 4 months, even though no attempts were made for re-lease (perhaps it was a market downturn, and vacancy rates in Houston were sky high, so, indeed more evidence of the otherwise should have been provided). – cnst Sep 12 '15 at 10:06
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I cannot speak for Texas specifically but in general:

You signed a contract in which you agreed to pay 15 months rent each on a given day in return for which you were given use of the premises. Nothing in the lease forces you to occupy the premises - it is there for you to use or not use as you see fit but you must pay the rent regardless. You made a legally binding deal - you are not allowed to walk away from your obligations.

Is acceleration legal? Well the link you gave under late fee cites a case that suggests that it is not because it amounts to a penalty rather than a restitution. Interest on late payments are probably enforceable so would any collection costs.

Regarding the hypothetical, if you stop paying the rent then you are in breach. If you no longer want to be bound by the lease then you need to find a way to end it in accordance with the law - which basically means agreeing terms with the landlord. If you can find them another tenant willing to pay as much or more than you then they will probably be willing to end the lease (and the rent) when the new tenant takes over. If they will only pay less then the landlord may require you to make up the difference. This process is called negotiation.

  • 5
    Unfortunately, this question isn't about lease contracts in general, but about the specific case of Texas. – Mark Jun 25 '15 at 1:28
  • "Nothing in the lease forces you to occupy the premises" -- Completely not true. Almost every lease I've ever seen makes it illegal to move out prior to lease termination, in California or Texas, probably everywhere. E.g., it's against the lease for the tenant to remove their own property, however weird that may sound to anyone never taking a full read of any lease contract. – cnst Jun 25 '15 at 4:52

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