A lawsuit has been filed on behalf of a proposed class of current and former residents of defendant Firmus Management and Construction LLC’s apartment properties in Texas.
The lawsuit states section 92.019 of the Texas Property code aims to protect “vulnerable” residential tenants from “excessive fees and unwarranted penalties” handed down by landlords and/or property owners. Specifically, Section 92.019 prohibits landlords from charging tenants late fees for failing to pay rent unless:
Notice of the fee is included in a written lease;
The fee is “a reasonable estimation” of uncertain damages to the landlord that cannot be precisely tallied stemming from a late rent payment; and
A tenant’s rent has remained unpaid one full day after the date the rent was originally due.
The complaint poses that should a tenant pay his or her rent a few days late, it’s unlikely a landlord would suffer any damages that meet the above-described statutory requirements. According to the lawsuit, the late fees charged by the defendant represent “a significant source of ancillary (non-rent) income” that’s used to “either generate additional revenue or to serve as a penalty for late payment.” Either way, the suit alleges, the defendant’s late-fee practices are not permissible under Texas law.
The plaintiffs signed a 14-month lease with the defendant in May 2017, the case says, with rent to be paid via Firmus’ online payment portal. According to the lawsuit, the defendant’s online rent payment portal gave the plaintiffs trouble from the get-go and is to blame for the wrongly-imposed late fees:
“While they intended to pay their rent by the first of the month, the payment portal often did not record rent as received by the first, resulting in [the plaintiffs] being charged late fees. When they contacted [the defendant] about the problem, [the defendant] waived some of the fees for several months, while other late fees were not waived and were paid by [the plaintiffs] when charged. However, [the defendant] later re-imposed all of the previously waived late fees, over [the plaintiffs’] protests, forcing [the plaintiffs] to pay all late fees charged to avoid being evicted from their unit. [The plaintiffs] continued their efforts to get [the defendant] to credit the late fees, but [the defendant] refused to do so.”