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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS AUSTIN APARTMENT § ASSOCIATION § § VS. § Case No. 1:14-cv-1146 § CITY OF AUSTIN § § AUSTIN APARTMENT ASSOCIATION’S 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 Association’s request for a preliminary injunction. 2 Simultaneously with filing 1 The Austin City Code’s 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 court’s order). Austin Apartment Association's Motion for Injunction Pending Appeal 1 Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 1 of 70

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AAA Motion for Injunction

TRANSCRIPT

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS

AUSTIN APARTMENT § ASSOCIATION §

§ VS. § Case No. 1:14-cv-1146

§ CITY OF AUSTIN §

§

AUSTIN APARTMENT ASSOCIATION’S 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 Association’s request for a preliminary injunction.2 Simultaneously with filing

1 The Austin City Code’s 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 court’s 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

applicant’s status in a number of constitutionally protected classes—race, 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 City’s

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 classifications—now 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

3 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

Association’s 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

7 See TAA lease. 8Housing Authority “Steps to Participate in Program, §§ 4, 6, available at http://www.hacanet.org/HCV/participate.php; HAP Contract, p. 1, § 5, p. 5, § 6.

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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

9 TAA Lease, §§ 16, 25. 10 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).

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4. Delay in receipt of rent:

Under a TAA Lease, rent is due in advance (the first month’s rent is due when the lease begins).17

But:

Under the housing voucher program, the first month’s rent is not paid in advance. The Housing Authority advertises that “the owner can expect to receive the first month’s 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 Authority’s 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 Authority’s and resident’s 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. 18 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).

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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 Authority’s 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 family’s 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 Association’s original

petition for declaratory and injunctive relief—filed in state court—alleged that the

ordinance is preempted by state law, is preempted by federal law, and violates the

23 TAA Lease, §§ 3, 32, 37. 24 HAP Contract, p. 5, § 7(a)(4). 25 TAA Lease, § 22. 26 HAP Contract, pp. 4-5, § 5, p. 11, § 9.

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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 Association’s 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 Merchant’s and Concessionaire’s Ass’n 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 Merchant’s and Concessionaire’s Ass’n,

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. GOV’T 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 applicant’s status in a

number of constitutionally protected classes—race, 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 city’s “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 City’s 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 one’s

identity—an applicant’s “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 one’s 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 City’s 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 government’s

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 City’s ordinance makes participation in the federal

Section 8 program mandatory, it is also preempted by federal law. The federal low-

income 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 owner’s 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 City’s 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. Nat’l 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 owner’s 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, Maine’s 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 City’s 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’ Int’l 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 City’s 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 Association’s 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 dism’d). The Association will brief this issue further in its Appellant’s Brief.

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2015, was temporarily restrained, but is no longer stayed because of this Court’s

denial of the Association’s 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 Association’s

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 Association’s 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

Association’s 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) [email protected] Melissa A. Lorber (SBN 24032969) [email protected] 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 Plaintiff’s 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 [email protected] Fred Fuchs Texas Rio Grande Legal AID 4920 North IH-35 Austin, Texas 78751 [email protected]

By: /s/ Craig T. Enoch Craig T. Enoch

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APPENDIX

A. Court’s February 27, 2015 Order denying Plaintiff’s 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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F

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXA5 FEB 27 p L: 06

AUSTIN DIVISION

AUSTIN APARTMENT ASSOCIATION, Plaintiff,

-vs-

CITY OF AUSTIN, Defendant.

ORDER

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

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 of Austin'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-

'I

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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. See Prelim. Inj. Hrg. Ex. P-2

(Request for Tenancy Approval) at 1. 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 HUD-

prepared 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. See id. 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 1. Further, the landlord must append a Tenancy Addendum to the

landlord-tenant lease agreement, which controls in the event the two conflict. Prelim. Inj. Hrg. Ex.

P-5 (Tenancy Addendum) at 1 § 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 5 § 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 of the 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:

(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. 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 of persons 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 § 2 14.903, however, "[e]nforcement procedures and remedies..

may vary from. . . federal fair housing law." TEX. LOCAL GOv'T CODE § 214.903(a). It is not

entirely clear to the Court whether or how the variance permitted by § 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 low-

income families . . . ."); Franklin Tower One, L.L. C. v. NM, 725 A.2d 1104, 1113 (N.J. 1999)

("[T]he voluntary nature of the Section 8 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

2 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 of tenants 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.

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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 v. Brown,

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

holder." 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 of the 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. v. Morrison, 667 S.W.2d 580,

584 (Tex. App.Houston [1st Dist.] 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 of Brownsville 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 of master 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-of-

contracts 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 of freedom of

contract.... There is no absolute freedom to do as one wills or to contract 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. v. Blue Cross & Blue ShieldAss 'n, 110 F.3d 318,

333 (6th Cir. 1997) ("[F]reedom 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 1-2

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

4 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 of the 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 of Ho 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 of the 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. . . for or applied to public use without adequate compensation being made." TEX. CONST.

art. I, § 17. 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. v. City of Jackson, Miss.,

468 F.3d 281, 292 (5th Cir. 2006). 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 of rent 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

economically viable use of his land." (internal quotes omitted)); Mayhew v. Town of Sunnyvale, 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.

SAM SPARKS (I

UNITED STATES DISTRICT JUDGE

1146 prelim inj ord ba.frrn

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Housing Assistance Payments Contract U.S. Department of Housingand Urban Development

(HAP Contract) Office of Public and Indian HousingSection 8 Tenant-Based Assistance

OMB Approval No. 2577- 0169Housing Choice Voucher Program (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 owner’s 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 ContractThis 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 contractPart C Tenancy addendum

Use of this formUse of this HAP contract is required by HUD. Modification of the HAP contract is not permitted. The HAP contract must be word-for-word 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 typesIn 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 Page 1 of 12

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)).

How to fill in Part ASection by Section Instructions

Section 2: TenantEnter full name of tenant.

Section 3. Contract UnitEnter address of unit, including apartment number, if any.

Section 4. Household MembersEnter 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 TermEnter 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 OwnerEnter 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 PaymentEnter 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.

form HUD-52641 (8/2009) ref Handbook 7420.8

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

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 49 of 70

Housing Assistance Payments Contract U.S. Department of Housingand Urban Development(HAP Contract) Office of Public and Indian Housing

Section 8 Tenant-Based AssistanceHousing 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 termin accordance with HUD requirements.

Previous editions are obsolete Page 2 of 12form HUD-52641 (8/2009)

ref Handbook 7420.8Appendix B to Austin Apartment Association's

Motion for Injunction Pending Appeal

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

___________________________________________________________________________________________________________8. Utilities and AppliancesThe 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 Paid 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 Bottle gas Oil or Electric Coal or Other

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)

Previous editions are obsolete Page 3 of 12form HUD-52641 (8/2009)

ref Handbook 7420.8

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

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

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

U.S. Department of Housingand Urban DevelopmentOffice of Public and Indian Housing

___________________________________________________________________________Part B of HAP Contract: Body of Contract

1. Purpose a. 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).

b. The HAP contract only applies to the household and contract unit specified in Part A of the HAP contract.

c. During the HAP contract term, the PHA will pay housing assistance payments to the owner in accordance with the HAP contract.

d. 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.

2. Lease of Contract Unit a. The owner has leased the contract unit to the tenant

for occupancy by the family with assistance under the Section 8 voucher program.

b. The PHA has approved leasing of the unit in accordance with requirements of the Section 8 voucher program.

c. The lease for the contract unit must include word-for-word all provisions of the tenancy addendum required by HUD (Part C of the HAP contract).

d. 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.

e. The owner is responsible for screening the family’s 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 family’s behavior or the family’s conduct in tenancy.

3. Maintenance, Utilities, and Other Services a. The owner must maintain the contract unit and

premises in accordance with the housing quality standards (HQS).

b. The owner must provide all utilities needed to comply with the HQS.

c. 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

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.

d. 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.

e. 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.

f. The PHA must notify the owner of any HQS defects shown by the inspection.

g. The owner must provide all housing services as agreed to in the lease.

4. Term of HAP Contract a. 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).

b. 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.

Previous editions are obsolete Page 4 of 12form HUD-52641 (8/2009)

ref Handbook 7420.8

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

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

(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.

(8) 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.

(9) 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.

5. Provision and Payment for Utilities and Appliances a. The lease must specify what utilities are to be provided

or paid by the owner or the tenant. b. The lease must specify what appliances are to be pro-

vided or paid by the owner or the tenant. c. 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.

6. Rent to Owner: Reasonable Rent a. 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.

b. 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. c. The PHA must redetermine the reasonable rent when

required in accordance with HUD requirements. The PHA may redetermine the reasonable rent at any time.

d. 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.

7. PHA Payment to Owner a. When paid

(1) During the term of the HAP contract, the PHAmust make monthly housing assistance payments to the owner on behalf of the family at thebeginning of each month.

(2) The PHA must pay housing assistance payments promptly when due to the owner.

(3) 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,

governing penalties for late payment of rent by a tenant; (ii) It is the owner’s 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 PHA’s 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.

b. Owner compliance with HAP contract. Unless theowner 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.

c. 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 pro-rated for a partial month.

d. Application of payment. The monthly housingassistance payment shall be credited against the monthly rent to owner for the contract unit.

e. 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.

f. Overpayment to owner. If the PHA determines thatthe 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).

8. Owner Certification

Previous editions are obsolete Page 5 of 12form HUD-52641 (8/2009)

ref Handbook 7420.8

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

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

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 owner’s knowledge, the members of the family reside in the contract unit, and the unit is the family’s 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.

9. Prohibition of Discrimination. In accordance withapplicable equal opportunity statutes, Executive Orders, and regulations:

a. 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.

b. The owner must cooperate with the PHA and HUD in conducting equal opportunity compliance reviews and complaint investigations in connection with the HAP contract.

10. Owner’s 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 owner’s 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.

(5) If the owner has engaged in any drug-related criminal activity or any violent criminal activity.

b. 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.

c. The PHA’s 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.

d. The PHA may seek and obtain additional relief by judicial order or action, including specific performance, other injunctive relief or order for damages.

e. 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.

f. The PHA’s 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.

11. PHA and HUD Access to Premises and Owner’s Records a. The owner must provide any information pertinent to

the HAP contract that the PHA or HUD may reasonably require.

b. 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.

c. The owner must grant such access to computerized or other electronic records, and to any computers, equip-ment or facilities containing such records, and must provide any information or assistance needed to accessthe records.

12. Exclusion of Third Party Rights a. 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.

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.

c. The PHA does not assume any responsibility for injury to, or any liability to, any person injured as a result of the owner’s 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.

d. 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

Previous editions are obsolete Page 6 of 12form HUD-52641 (8/2009)

ref Handbook 7420.8

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

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

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

13. Conflict of Interest a. “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.

b. 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.

c. “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.

d. 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.

e. If a prohibited interest occurs, the owner shall promptly and fully disclose such interest to the PHA and HUD.

f. The conflict of interest prohibition under this section may be waived by the HUD field office for good cause.

g. 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. The owner may not assign the HAP contract to a new

owner without the prior written consent of the PHA. b. 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.

c. 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).

d. 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 immediatesuccessor 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 sunseton December 31, 2012 unless extended by law.

Previous editions are obsolete Page 7 of 12form HUD-52641 (8/2009)

ref Handbook 7420.8

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

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

Previous editions are obsolete Page 8 of 12form HUD-52641 (8/2009)

ref Handbook 7420.8

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

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

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

U.S. Department of Housingand Urban DevelopmentOffice of Public and Indian Housing

___________________________________________________________________________Part C of HAP Contract: Tenancy Addendum

1. Section 8 Voucher Program a. The owner is leasing the contract unit to the tenant

for occupancy by the tenant’s 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).

b. 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.

2. Lease a. 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.

b. 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.

3. Use of Contract Unit a. During the lease term, the family will reside in the

contract unit with assistance under the voucher program.

b. 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.

c. The contract unit may only be used for residence by the PHA-approved household members. The unit must be the family’s 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.

d. The tenant may not sublease or let the unit. e. The tenant may not assign the lease or transfer the

unit.

4. Rent to Owner a. The initial rent to owner may not exceed the amount

approved by the PHA in accordance with HUD requirements.

b. 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.

c. 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.

5. Family Payment to Owner a. 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.

b. 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.

c. The monthly housing assistance payment shall be credited against the monthly rent to owner for the contract unit.

d. 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.

e. 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.

f. The owner must immediately return any excess rent payment to the tenant.

6. Other Fees and Charges a. Rent to owner does not include cost of any meals or

supportive services or furniture which may be provided by the owner.

b. 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.

c. The owner may not charge the tenant extra amountsfor items customarily included in rent to owner in the locality, or provided at no additional cost to unsubsidized tenants in the premises.

7. Maintenance, Utilities, and Other Services a. Maintenance

Previous editions are obsolete Page 9 of 12form HUD-52641 (8/2009)

ref Handbook 7420.8

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

Case 1:14-cv-01146-SS Document 25 Filed 03/02/15 Page 57 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. 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 tenant’s 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. c. 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.

d. Housing services. The owner must provide allhousing services as agreed to in the lease.

8. Termination of Tenancy by Owner a. Requirements. The owner may only terminate the

tenancy in accordance with the lease and HUD requirements.

b. Grounds. During the term of the lease (the initialterm 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).

c. 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 resident’s 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.

(2) 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.

d. 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 tenant’s failure to accept the owner’s

offer of a new lease or revision; (b) The owner’s 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 owner’s 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

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provision shall not affect any State or local law that provides for longer time periods or addition protections for tenants. Thisprovision will sunset on December 31, 2012 unless extended by law.

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.

(2) Criminal activity directly relating to abuse, engaged in by a member of a tenant’s household or any guest or other person under the tenant’s control, shall not be cause for termination of assistance, tenancy, or occupancy rights if the tenant or an immediate member of the tenant’s 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, terminateoccupancy 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 tenant’s 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

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

(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.

(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.

f. Eviction by court action. The owner may only evict thetenant 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 AssistanceThe 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 OutThe 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.

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c. 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.

d. 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.

13. Prohibition of DiscriminationIn accordance with applicable equal opportunity statutes, ExecutiveOrders, 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 Leasea. 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 tenant’s family under the Section 8 voucher program.

b. 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. 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.

b. 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.

c. 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.

d. 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.

16. Notices

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

17. DefinitionsContract 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 thePHA 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. Thehousehold 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 thelease 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 islocated, 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 thecontract 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 (42United 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.

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ForForForForFormmmmmvalid forvalid forvalid forvalid forvalid for

members members members members membersonlyonlyonlyonlyonly

single month’s rent. We will not impose late charges until at least the thirdday of the month. You’ll also pay a charge of $____________ for eachreturned check or rejected electronic payment, plus initial and daily latecharges until we receive acceptable payment. If you don’t pay rent ontime, you’ll be in default and all remedies under state law and this LeaseContract will be authorized. If you violate the animal restrictions ofparagraph 27 or other animal rules, you’ll pay an initial charge of$____________ per animal (not to exceed $100 per animal) and a dailycharge of $____________ per animal (not to exceed $10 per day per animal)from the date the animal was brought into your apartment until it is finallyremoved. We’ll also have all other remedies for such violation.

7. UTILITIES/SERVICES. We’ll pay for the following items, if checked:❒ gas ❒ water ❒ wastewater ❒ electricity ❒ trash/recycling❒ cable/satellite ❒ master antenna ❒ Internet ❒ stormwater/drainage❒ other _______________________________________________________.You’ll pay for all other utilities and services, related deposits, and anycharges or fees on such utilities and services during your Lease Contractterm. You must not allow any utilities (other than cable or Internet) tobe cut off or switched for any reason—including disconnection for notpaying your bills—until the Lease Contract term or renewal period ends.If a utility is submetered or prorated by an allocation formula, we will attachan addendum to this Lease Contract in compliance with state agency rules.If a utility is individually metered, it must be connected in your name andyou must notify the utility provider of your move-out date so the meter canbe timely read. If you delay getting it turned on in your name by leasecommencement or cause it to be transferred back into our name before yousurrender or abandon the apartment, you’ll be liable for a $___________charge (not to exceed $50 per violation), plus the actual or estimated costof the utilities used while the utility should have been connected in yourname. If you are in an area open to competition and your apartmentis individually metered, you may choose or change your retail electricprovider at any time. If you qualify, your provider will be the sameas ours, unless you choose a different provider. If you choose or changeyour provider, you must give us written notice. You must pay all applicableprovider fees, including any fees to change service back into our name afteryou move out.

8. INSURANCE. Our insurance does not cover the loss of or damage to your personalproperty. You are [check one]:

❒ required to buy and maintain renter’s or liability insurance (seeattached addendum), or

❒ not required to buy renter’s 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. Renter’s insurance doesnot cover losses due to a flood. Information on renter’s insurance is availablefrom the Texas Department of Insurance.

9. SECURITY DEVICES. What We Must Provide. Texas law requires, withsome exceptions, that we must provide at no cost to you when occupancybegins: (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 doorhandle latch or a security bar on each sliding door; (5) a keyless boltingdevice (deadbolt) on each exterior door; and (6) either a keyed doorknoblock or a keyed deadbolt lock on one entry door. Keyed lock(s) will berekeyed after the prior resident moves out. The rekeying will be done eitherbefore you move in or within 7 days after you move in, as required bystatute. 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 nextrent payment under Section 92.165(1), Texas Property Code.

What You Are Now Requesting. Subject to some limitations, under Texaslaw you may at any time ask us to: (1) install one keyed deadbolt lock onan exterior door if it does not have one; (2) install a security bar on a slidingglass 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 tostatutory restrictions on what security devices you may request, you are nowrequesting 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 requiredby statute. You will pay for: (1) rekeying that you request (exceptwhen we failed to rekey after the previous resident moved out); and(2) repairs or replacements due to misuse or damage by you or yourfamily, occupants, or guests. You must pay immediately after the workis done unless state statute authorizes advance payment. You also mustpay for additional or changed security devices you request, in advanceor afterward, at our option.

1. 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). You’ve agreed to rent

Apartment No. _________, at ___________________________________

______________________________________________ (street address)

in ____________________________________________________(city),

Texas, _______________________ (zip code) for use as a private residenceonly. The terms “you” and “your” refer to all residents listed above, anda person authorized to act in the event of a sole resident’s death. The terms“we,” “us,” and “our” refer to the owner listed above and not to propertymanagers or anyone else. Written notice to or from our managersconstitutes notice to or from us. If anyone else has guaranteed performanceof this Lease Contract, a separate Lease Contract Guaranty for eachguarantor must be executed.

2. OCCUPANTS. The apartment will be occupied only by you and (list allother occupants not signing the Lease Contract):________________________________________________________________

________________________________________________________________

________________________________________________________________

No one else may occupy the apartment. Persons not listed above must notstay in the apartment for more than _____ consecutive days without ourprior written consent, and no more than twice that many days in any onemonth. If the previous space isn’t filled in, two days per month is the limit.

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

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

and ends at midnight the __________ day of ________________________,

_________ (year). This Lease Contract will automatically renew month-to-month unless either party gives at least __________ days written notice oftermination or intent to move-out as required by paragraph 37. If thenumber of days isn’t 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. Thisamount [check one]: ❒ does or ❒ does not include an animal deposit. Anyanimal deposit will be stated in an animal addendum. See paragraphs41 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 resident’s affidavit, haspermanently moved out or is under court order to not enter the apartment,is (at our option) no longer entitled to occupancy, keys, or other accessdevices. Your apartment will be [check one]: ❒ furnished or ❒ unfurnished.

6. RENT AND CHARGES. You will pay $____________ per month for rent,

in advance and without demand:

❒ at the onsite manager’s office

❒ through our online payment site

❒ at ____________________________________________________.

Prorated rent of $___________ is due for the remainder of [check one]: ❒ 1stmonth or ❒ 2nd month, on ______________________________, ___________(year). Otherwise, you must pay your rent on or before the 1st day of eachmonth (due date) with no grace period. Cash is unacceptable without our priorwritten permission. You must not withhold or offset rent unless authorized bystatute. We may, at our option, require at any time that you pay all rent andother sums in cash, certified or cashier’s check, money order, or one monthlycheck rather than multiple checks. If you don’t pay all rent on or before the____________ day of the month, you’ll pay an initial late charge of$____________ plus a daily late charge of $____________ per day after thatdate until paid in full. Daily late charges will not exceed 15 days for any

Moving In — General Information

10. SPECIAL PROVISIONS. The following or attached special provisionsand any addenda or written rules furnished to you at or before signingwill become a part of this Lease Contract and will supersede anyconflicting provisions of this printed Lease Contract form.

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

11. UNLAWFUL EARLY MOVE-OUT; RELETTING CHARGE. You’llbe 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 yourobligations under this Lease Contract. See the first paragraph of page 2.

Special Provisions and “What If” Clauses

YOUR INITIALS: _________, INITIALS OF OUR REPRESENTATIVE: __________ APARTMENT LEASE CONTRACT © 2013, TEXAS APARTMENT ASSOCIATION, INC. PAGE 1 OF 6

Apartment Lease Contract

Date of Lease Contract:__________________________________ This is a binding contract. Read carefully before signing. (when this Lease Contract is filled out)

This Lease Contract is only valid if filled out before January 1, 2016.

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

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While You’re Living in the Apartment

business conducted “at home” by computer, mail, or telephone ispermissible if customers, clients, patients, or other business associatesdo not come to your apartment for business purposes. We mayregulate: (1) the use of patios, balconies, and porches; (2) theconduct of furniture movers and delivery persons; and (3) activitiesin common areas.

We may exclude from the apartment community guests or otherswho, in our judgment, have been violating the law, violating thisLease Contract or any apartment rules, or disturbing other residents,neighbors, visitors, or owner representatives. We may also excludefrom any outside area or common area a person who refuses to showphoto identification or refuses to identify himself or herself as aresident, occupant, or guest of a specific resident in the community.

You will notify us within 15 days if you or any occupants areconvicted of any felony, or misdemeanor involving a controlledsubstance, violence to another person or destruction of property.You also agree to notify us within 15 days if you or any occupantsregister as a sex offender in any state. Informing us of criminalconvictions or sex offender registry does not waive any rights wehave against you.

20. PROHIBITED CONDUCT. You and your occupants or guests maynot engage in the following activities: criminal conduct; behaving in

18. COMMUNITY POLICIES OR RULES. You and all guests andoccupants must comply with any written apartment rules andcommunity policies, including instructions for care of our property.Our rules are considered part of this Lease Contract. We may makereasonable changes to written rules, effective immediately, if theyare distributed and applicable to all units in the apartmentcommunity and do not change dollar amounts on page 1 of thisLease Contract.

19. LIMITATIONS ON CONDUCT. The apartment and other areasreserved for your private use must be kept clean. Trash must bedisposed of at least weekly in appropriate receptacles in accordancewith local ordinances. Passageways may be used only for entry orexit. Any swimming pools, saunas, spas, tanning beds, exerciserooms, storerooms, laundry rooms, and similar areas must be usedwith care in accordance with apartment rules and posted signs.Glass containers are prohibited in or near pools and all othercommon areas. You, your occupants, or guests may not anywherein the apartment community: use candles or use kerosene lampsor heaters without our prior written approval; cook on balconies oroutside; or solicit business or contributions. Conducting any kindof business (including child care services) in your apartment or inthe apartment community is prohibited—except that any lawful

APARTMENT LEASE CONTRACT © 2013, TEXAS APARTMENT ASSOCIATION, INC. PAGE 2 OF 6

Not a Release. The reletting charge is not a Lease Contractcancellation or buyout fee. It is a liquidated amount covering only partof our damages; that is, our time, effort, and expense in finding andprocessing a replacement. These damages are uncertain and difficultto ascertain—particularly those relating to make ready, inconvenience,paperwork, advertising, showing apartments, utilities for showing,checking prospects, overhead, marketing costs, and locator-servicefees. You agree that the reletting charge is a reasonable estimate ofsuch damages and that the charge is due whether or not our relettingattempts succeed. If no amount is stipulated, you must pay ouractual reletting costs so far as they can be determined. The relettingcharge does not release you from continued liability for: future orpast-due rent; charges for cleaning, repairing, repainting, or unreturnedkeys; or other sums due.

12. DAMAGES AND REIMBURSEMENT. You must promptly payor reimburse us for loss, damage, consequential damages,government fines or charges, or cost of repairs or service in theapartment community due to: a violation of the Lease Contractor rules; improper use; negligence; other conduct by you or yourinvitees, guests or occupants; or any other cause not due to ournegligence or fault. You will indemnify and hold us harmless fromall liability arising from the conduct of you, your invitees, guests,or occupants, or our representatives who perform at your requestservices not contemplated in this Lease Contract. Unless thedamage or wastewater stoppage is due to our negligence, we’renot liable for—and you must pay for—repairs, replacementsand damage to the following if occurring during the LeaseContract 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 improperobjects in lines exclusively serving your apartment. We mayrequire payment at any time, including advance payment ofrepairs for which you’re liable. Delay in demanding sums you oweis not a waiver.

13. CONTRACTUAL LIEN AND PROPERTY LEFT INAPARTMENT. All property in the apartment is (unless exemptunder Section 54.042, Texas Property Code) subject to acontractual lien to secure payment of delinquent rent (exceptas prohibited by Section 2306.6738, Texas Government Code, forowners supported by housing tax credit allocations). For this purpose,“apartment” excludes common areas but includes interior living areasand exterior patios, balconies, attached garages, and storerooms for yourexclusive use.Removal After We Exercise Lien for Rent. If your rent isdelinquent, our representative may peacefully enter theapartment and remove and/or store all property subject to lien.Written notice of entry must be left afterwards in the apartment ina conspicuous place—plus a list of items removed. The notice muststate the amount of delinquent rent and the name, address, and phonenumber of the person to contact about the amount owed. The noticemust also state that the property will be promptly returned when thedelinquent rent is fully paid. All property in the apartment is presumedto be yours unless proven otherwise.Removal After Surrender, Abandonment, or Eviction. We or lawofficers may remove or store all property remaining in the apartmentor in common areas (including any vehicles you or any occupant orguest owns or uses) if you are judicially evicted or if you surrender orabandon 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 judicialeviction, surrender, or abandonment of the apartment. We’re notliable for casualty loss, damage, or theft except for property removedunder a contractual lien. You must pay reasonable charges for ourpacking, removing, storing, and selling any property. We have a lienon all property removed and stored after surrender, abandonment,or judicial eviction for all sums you owe, with one exception: Our lienon property listed under Texas Property Code Section 54.042 islimited to charges for packing, removing, and storing.Redemption. If we’ve seized and stored property under a contractuallien for rent as authorized by law, you may redeem the property bypaying all delinquent rent due at the time of seizure. But if noticeof sale (set forth as follows) is given before you seek redemption, youmay redeem only by paying the delinquent rent and reasonablecharges for packing, removing, and storing. If we’ve removed andstored 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 returnredeemed property at the place of storage, the management office, or theapartment (at our option). We may require payment by cash, moneyorder, or certified check.

Disposition or Sale. Except for animals and property removedafter the death of a sole resident, we may throw away or give to acharitable organization all items of personal property that are: (1) leftin the apartment after surrender or abandonment; or (2) left outsidemore than 1 hour after writ of possession is executed, followingjudicial eviction. Animals removed after surrender, abandonment, oreviction may be kenneled or turned over to local authorities or humanesocieties. Property not thrown away or given to charity may bedisposed of only by sale, which must be held no sooner than 30 daysafter written notice of date, time, and place of sale is sent by bothregular mail and certified mail (return receipt requested) to your lastknown address. The notice must itemize the amounts you owe andthe name, address, and phone number of the person to contact aboutthe sale, the amount owed, and your right to redeem the property. Salemay be public or private, is subject to any third-party ownership orlien claims, must be to the highest cash bidder, and may be in bulk,in batches, or item-by-item. Proceeds exceeding sums owed must bemailed to you at your last known address within 30 days after sale.

14. FAILING TO PAY FIRST MONTH’S RENT. If you don’t pay thefirst month’s rent when or before the Lease Contract begins, all futurerent will be automatically accelerated without notice and immediatelydue. We also may end your right of occupancy and recoverdamages, future rent, reletting charges, attorney’s fees, court costs,and other lawful charges. Our rights, remedies, and duties underparagraphs 11 and 32 apply to acceleration under this paragraph.

15. RENT INCREASES AND LEASE CONTRACT CHANGES. Norent increases or Lease Contract changes are allowed before the initialLease Contract term ends, except for changes allowed by any specialprovisions in paragraph 10, by a written addendum or amendmentsigned by you and us, or by reasonable changes of apartment rulesallowed under paragraph 18. If, at least 5 days before the advancenotice deadline referred to in paragraph 3, we give you written noticeof rent increases or Lease Contract changes effective when the LeaseContract term or renewal period ends, this Lease Contract willautomatically continue month-to-month with the increased rent orLease Contract changes. The new modified Lease Contract will beginon the date stated in the notice (without necessity of yoursignature) unless you give us written move-out notice under paragraph37. The written move-out notice under paragraph 37 applies only tothe end of the current Lease Contract or renewal period.

16. DELAY OF OCCUPANCY. If occupancy is or will be delayed forconstruction, repairs, cleaning, or a previous resident’s holding over,we’re not responsible for the delay. The Lease Contract will remainin force subject to: (1) abatement of rent on a daily basis duringdelay; and (2) your right to terminate as set forth below. Terminationnotice must be in writing. After termination, you are entitled onlyto refund of deposit(s) and any rent paid. Rent abatement or LeaseContract termination does not apply if delay is for cleaning or repairsthat don’t prevent you from occupying the apartment.If there is a delay and we haven’t given notice of delay as set forthimmediately below, you may terminate up to the date when theapartment is ready for occupancy, but not later.(1) If we give written notice to any of you when or after the Lease

Contract begins—and the notice states that occupancy hasbeen delayed because of construction or a previous resident’sholding over, and that the apartment will be ready on a specificdate— you may terminate the Lease Contract within 3 days ofyour receiving the notice, but not later.

(2) If we give written notice to any of you before the effective LeaseContract date and the notice states that construction delay isexpected and that the apartment will be ready for you tooccupy on a specific date, you may terminate the LeaseContract within 7 days after any of you receives written notice,but not later. The readiness date is considered the new effectiveLease Contract date for all purposes. This new date may notbe moved to an earlier date unless we and you agree.

17. DISCLOSURE RIGHTS. If someone requests information on youor your rental history for law-enforcement, governmental, or businesspurposes, we may provide it. At our request, any utility providermay furnish us information about pending or actual connections ordisconnections of utility service to your apartment.

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ForForForForFormmmmmvalid forvalid forvalid forvalid forvalid for

members members members members membersonlyonlyonlyonlyonly

YOUR INITIALS: _________, INITIALS OF OUR REPRESENTATIVE: __________ APARTMENT LEASE CONTRACT © 2013, TEXAS APARTMENT ASSOCIATION, INC. PAGE 3 OF 6

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 drugparaphernalia; engaging in or threatening violence; possessing a weaponprohibited by state law; discharging a firearm in the apartment community;displaying or possessing a gun, knife, or other weapon in the common area ina way that may alarm others; storing anything in closets having gas appliances;tampering with utilities or telecommunications; bringing hazardous materialsinto the apartment community; using windows for entry or exit; heating theapartment with a gas-operated cooking stove or oven; or injuring our reputationby making bad faith allegations against us to others.

21. PARKING. We may regulate the time, manner, and place of parking allcars, trucks, motorcycles, bicycles, boats, trailers, and recreational vehicles.Motorcycles or motorized bikes may not be parked inside an apartmentor on sidewalks, under stairwells, or in handicapped parking areas. Wemay have unauthorized or illegally parked vehicles towed or bootedaccording to state law at the owner or operator’s 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.

22. RELEASE OF RESIDENT. Unless you’re entitled to terminate this LeaseContract under paragraphs 10, 16, 23, 31 or 37, you won’t be released fromthis Lease Contract for any reason—including but not limited to voluntaryor involuntary school withdrawal or transfer, voluntary or involuntary jobtransfer, marriage, separation, divorce, reconciliation, loss of co-residents,loss of employment, bad health, death, or property purchase. You may alsohave the right under Texas law to terminate the Lease Contract earlyin certain situations involving family violence, certain sexual offensesor stalking.

Death of Sole Resident. If you are the sole resident and die during theLease Contract term, the Lease Contract may be terminated without penaltyby an authorized representative of your estate with at least 30 days writtennotice. 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 areremoved. Your estate will also be liable for all charges and damages to theapartment until it is vacated, and any removal and storage costs.

23. MILITARY PERSONNEL CLAUSE. You may have the right underTexas law to terminate the Lease Contract in certain situations involvingmilitary deployment or transfer. You may terminate the Lease Contractif you enlist or are drafted or commissioned in the U.S. Armed Forces.You also may terminate the Lease Contract if:

(1) you are (i) a member of the U.S. Armed Forces or reserves on activeduty or (ii) a member of the National Guard called to active dutyfor more than 30 days in response to a national emergency declaredby the President; and

(2) you (i) receive orders for permanent change-of-station, (ii) receiveorders to deploy with a military unit or as an individual in supportof a military operation for 90 days or more, or (iii) are relieved orreleased from active duty.

After you deliver to us your written termination notice, the Lease Contractwill be terminated under this military clause 30 days after the date onwhich your next rental payment is due. You must furnish us a copy ofyour military orders, such as permanent change-of-station orders, call-up orders, or deployment orders or letter. Military permission for basehousing doesn’t constitute a permanent change-of-station order. Afteryour move out, we’ll return your security deposit, less lawful deductions.For the purposes of this Lease Contract, orders described in (2) above willonly release the resident who qualifies under (1) and (2) above andreceives the orders during the Lease Contract term and such resident’sspouse or legal dependents living in the resident’s household. A co-resident who is not your spouse or dependent cannot terminate underthis military clause. Unless you state otherwise in paragraph 10, yourepresent when signing this Lease Contract that: (1) you do not alreadyhave deployment or change-of-station orders; (2) you will not be retiringfrom the military during the Lease Contract term; and (3) the term of yourenlistment or obligation will not end before the Lease Contract term ends.Liquidated damages for making a false representation of the above willbe the amount of unpaid rent for the remainder of the lease term whenand if you move out, less rents from others received in mitigation underparagraph 32. You must immediately notify us if you are called to activeduty or receive deployment or permanent change-of-station orders.

24. RESIDENT SAFETY AND LOSS. You and all occupants and guests mustexercise due care for your own and others’ safety and security, especiallyin the use of smoke alarms and other detection devices, door and windowlocks, and other safety or security devices. You agree to make every effortto follow the Security Guidelines on page 5. Window screens are not forsecurity or keeping people from falling out.

Alarm and Detection Devices. We’ll furnish smoke alarms or otherdetection devices required by statute or city ordinance, and we’ll test themand provide working batteries when you first take possession. After that,you must pay for and replace batteries as needed, unless the law providesotherwise. We may replace dead or missing batteries at your expense,without prior notice to you. You must immediately report alarm or detectormalfunctions 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 itwith a working battery, you may be liable to us under Section 92.2611, TexasProperty Code for $100 plus one month’s rent, actual damages, and attorney’s fees.You also will be liable to us and others if you fail to report malfunctions, or anyloss, damage, or fines resulting from fire, smoke, or water. Upon request, wewill provide, as required by law, a smoke alarm capable of alerting a person witha hearing-impairment disability.

Loss. We’re not liable to any resident, guest, or occupant for personal injuryor damage, loss of personal property, or business or personal income fromany cause, including, but not limited to, fire, smoke, rain, flood, waterleaks, hail, ice, snow, lightning, wind, explosions, interruption of

utilities, pipe leaks, theft, negligent or intentional acts of residents,occupants or guests, or vandalism unless otherwise required bylaw. We have no duty to remove any ice, sleet, or snow but may removeany amount with or without notice. Unless we instruct otherwise, youmust—for 24 hours a day during freezing weather—(1) keep the apartmentheated to at least 50 degrees; (2) keep cabinet and closet doors open; and(3) drip hot and cold water faucets. You’ll be liable for damage to our andothers’ property if damage is caused by broken water pipes due to yourviolating these requirements.Crime or Emergency. Dial 911 or immediately call local medicalemergency, 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 won’t treat any of oursecurity measures as an express or implied warranty of security, or as aguarantee against crime or of reduced risk of crime. Unless otherwiseprovided by law, we’re not liable to you or any guests or occupants for injury,damage, or loss to person or property caused by criminal conduct of otherpersons, including theft, burglary, assault, vandalism, or other crimes. Evenif previously provided, we’re not obligated to furnish security personnel,patrols, lighting, gates or fences, or other forms of security unless requiredby statute. We’re not responsible for obtaining criminal-history checks onany 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 writtenreport to our representative and to the appropriate local law-enforcementagency. You also must furnish us with the law-enforcement agency’sincident report number upon request.

25. CONDITION OF THE PREMISES AND ALTERATIONS. You acceptthe apartment, fixtures, and furniture as is, except for conditions materiallyaffecting the health or safety of ordinary persons. We disclaim all impliedwarranties. You’ll be given an Inventory & Condition form on or beforemove-in. Within 48 hours after move-in, you must sign and note on theform all defects or damage and return it to us. Otherwise, everything willbe considered to be in a clean, safe, and good working condition.You must use customary diligence in maintaining the apartment and notdamaging or littering the common areas. Unless authorized by statute or by usin writing, you must not do any repairs, painting, wallpapering, carpeting,electrical changes, or otherwise alter our property. No holes or stickers areallowed inside or outside the apartment. We’ll permit a reasonable numberof small nail holes for hanging pictures on sheetrock walls and grooves ofwood-paneled walls, unless our rules state otherwise. No water furniture,washing machines, extra phone or television outlets, alarm systems, or lockchanges, additions, or rekeying is permitted unless allowed by statute orwe’ve consented in writing. You may install a satellite dish or antennaprovided you sign our satellite dish or antenna lease addendum whichcomplies with reasonable restrictions allowed by federal law. You agree notto 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, we’ll supply light bulbs for fixtureswe furnish, including exterior fixtures operated from inside the apartment;after that, you’ll replace them at your expense with bulbs of the same typeand wattage. Your improvements to the apartment (whether or not weconsent) become ours unless we agree otherwise in writing.We are committed to the principles of fair housing. In accordance withfair housing laws, we will make reasonable accommodations to our rules,policies, practices or services, and/or will allow reasonable modificationsunder such laws to give persons with disabilities access to and use of thisapartment community. We may require you to sign an addendumregarding the approval and implementation of such accommodations ormodifications, as well as restoration obligations, if any.

26. REQUESTS, REPAIRS, AND MALFUNCTIONS. If you or any occupantneeds to send a notice or request—for example, for repairs, installations,services, ownership disclosure or security-related matters—IT MUST BESIGNED AND IN WRITING to our designated representative (except incase of fire, smoke, gas, explosion, overflowing sewage, uncontrollable runningwater, electrical shorts, crime in progress, or fair housing accommodation ormodification). Our written notes on your oral request do not constitute a writtenrequest from you.Our complying with or responding to any oral request regarding securityor any other matters doesn’t waive the strict requirement for written noticesunder this Lease Contract. You must promptly notify us in writing of: waterleaks; mold; electrical problems; malfunctioning lights; broken or missinglocks or latches; and other conditions that pose a hazard to property, health, orsafety. We may change or install utility lines or equipment serving the apart-ment if the work is done reasonably without substantially increasing yourutility costs. We may turn off equipment and interrupt utilities as neededto avoid property damage or to perform work. If utilities malfunction or aredamaged by fire, water, or similar cause, you must notify our representativeimmediately. Air conditioning problems are normally not emergencies. Ifair conditioning or other equipment malfunctions, you must notify us as soonas possible on a business day. We’ll act with customary diligence to makerepairs and reconnections, taking into consideration when casualty insuranceproceeds are received. Rent will not abate in whole or in part.If we believe that fire or catastrophic damage is substantial, or thatperformance of needed repairs poses a danger to you, we may terminatethis Lease Contract by giving you at least 5 days written notice. We mayalso remove personal property if it causes a health or safety hazard. If theLease Contract is so terminated, we’ll 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 inthe apartment or apartment community unless we’ve 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 willauthorize an assistance or support animal for a disabled person but willnot require an animal deposit. The animal addendum includesinformation governing animals, including assistance or service animals.We may require a written statement from a qualified professionalverifying the need for such an animal. An animal deposit is considereda general security deposit. You must not feed stray or wild animals.If you or any guest or occupant violates animal restrictions (with orwithout your knowledge), you’ll be subject to charges, damages, eviction,and other remedies provided in this Lease Contract. If an animal hasbeen in the apartment at any time during your term of occupancy (withor without our consent), we’ll charge you for all cleaning and repair costs,including defleaing, deodorizing, and shampooing. Initial and dailyanimal-violation charges and animal-removal charges are liquidated damagesfor our time, inconvenience, and overhead (except for attorney’s fees andlitigation costs) in enforcing animal restrictions and rules. We may remove an

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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 theprocedures of paragraph 28. We may keep or kennel the animal or turn it overto a humane society or local authority. When keeping or kenneling an animal,we won’t be liable for loss, harm, sickness, or death of the animal unlessdue to our negligence. We’ll return the animal to you upon request if it hasnot already been turned over to a humane society or local authority. Youmust pay for the animal’s reasonable care and kenneling charges. Wehave 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 otherpersons listed in (2) below may peacefully enter the apartment atreasonable times for the purposes listed in (2) below. If nobody is in theapartment, then such persons may enter peacefully and at reasonabletimes by duplicate or master key (or by breaking a window or othermeans 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; performingpest control; doing preventive maintenance; checking for waterleaks; changing filters; testing or replacing detection or alarmdevice(s) or batteries; retrieving unreturned tools, equipment, orappliances; preventing waste of utilities; exercising ourcontractual lien; leaving notices; delivering, installing,reconnecting, or replacing appliances, furniture, equipment, orsecurity devices; removing or rekeying unauthorized securitydevices; removing unauthorized window coverings; stoppingexcessive noise; removing health or safety hazards (includinghazardous materials), or items prohibited under our rules; removingperishable foodstuffs if your electricity is disconnected; removing

31. RESPONSIBILITIES OF OWNER. We’ll act with customary diligenceto:(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 LeaseContract and exercise other remedies under Texas Property CodeSection 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 condition—after which we’ll have areasonable time for repair or remedy;

(b) if we fail to do so, you must make a second written request forthe repair or remedy (to make sure that there has been nomiscommunication between us)—after which we’ll have areasonable time for the repair or remedy; and

(c) if the repair or remedy still hasn’t been accomplished within thatreasonable time period, you may immediately terminate thisLease Contract by giving us a final written notice. You also mayexercise other statutory remedies, including those under TexasProperty Code Section 92.0561.

Instead of giving the two written requests referred to above, you maygive us one request by certified mail, return receipt requested, or byregistered mail—after which we will have a reasonable time for repairor remedy. “Reasonable time” takes into account the nature of theproblem and the reasonable availability of materials, labor, andutilities. Your rent must be current at the time of any request. We willrefund security deposits and prorated rent as required by law.

32. DEFAULT BY RESIDENT. You’ll be in default if: (1) you don’t payrent or other amounts that you owe on time; (2) you or any guest oroccupant violates this Lease Contract, apartment rules, or fire, safety,health, or criminal laws, regardless of whether or where arrest orconviction occurs; (3) you abandon the apartment; (4) you giveincorrect or false answers in a rental application; (5) you or anyoccupant is arrested, charged, detained, convicted, or given deferredadjudication or pretrial diversion for (i) a felony offense involvingactual or potential physical harm to a person, or involving possession,manufacture, or delivery of a controlled substance, marihuana, ordrug paraphernalia as defined in the Texas Controlled SubstancesAct, or (ii) any sex-related crime, including a misdemeanor; (6) anyillegal drugs or paraphernalia are found in your apartment; or (7) youor any occupant, in bad faith, makes an invalid habitability complaintto an official or employee of a utility company or the government.Eviction. If you default or holdover, we may end your right of occupancyby giving you a 24-hour written notice to vacate. Notice may be by:(1) regular mail; (2) certified mail, return receipt requested; (3) personaldelivery to any resident; (4) personal delivery at the apartment to anyoccupant over 16 years old; or (5) affixing the notice to the inside of theapartment’s main entry door. Notice by mail only will be considereddelivered on the earlier of: (1) actual delivery, or (2) three days (notcounting Sundays or federal holidays) after the notice is depositedin the U.S. Postal Service with postage. Termination of your possessionrights or subsequent reletting doesn’t release you from liability for futurerent or other Lease Contract obligations. After giving notice to vacate or

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

29. MULTIPLE RESIDENTS. Each resident is jointly and severally liablefor all Lease Contract obligations. If you or any guest or occupantviolates the Lease Contract or rules, all residents are considered tohave violated the Lease Contract. Our requests and notices (includingsale notices) to any resident constitute notice to all residents andoccupants. Notices and requests from any resident or occupantconstitute notice from all residents. Your notice of Lease Contracttermination may be given only by residents. In eviction suits, each residentis considered the agent of all other residents in the apartment for serviceof process. Any resident who defaults under this Lease Contract willindemnify the non-defaulting residents and their guarantors.

Security deposit refund check and any deduction itemizations willbe by: (check one)

❒ one check jointly payable to all residents and mailed to anyone 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 jointlypayable to all residents.

Responsibilities of Owner and Resident

Replacements

30. REPLACEMENTS AND SUBLETTING. Replacing a resident,subletting, or assignment is allowed only when we consent in writing. Ifdeparting or remaining residents find a replacement resident acceptableto 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 LeaseContract with or without an increase in the total security deposit; or(2) the remaining and replacement residents must sign an entirely newLease Contract. Unless we agree otherwise in writing, your securitydeposit will automatically transfer to the replacement resident as of thedate we approve. The departing resident will no longer have a right tooccupancy or a security deposit refund, but will remain liable for theremainder of the original Lease Contract term unless we agree otherwisein writing–even if a new Lease Contract is signed.

APARTMENT LEASE CONTRACT © 2013, TEXAS APARTMENT ASSOCIATION, INC. PAGE 4 OF 6

filing an eviction suit, we may still accept rent or other sums due; the filingor acceptance doesn’t waive or diminish our right of eviction, or any othercontractual or statutory right. Accepting money at any time doesn’t waiveour right to damages; past or future rent or other sums; or to continue witheviction proceedings.Acceleration. Unless we elect not to accelerate rent, all monthly rent forthe rest of the Lease Contract term or renewal period will be acceleratedautomatically without notice or demand (before or after acceleration) andwill be immediately due and delinquent if, without our written consent:(1) you move out, remove property in preparing to move out, or give oralor written notice (by you or any occupant) of intent to move out before theLease Contract term or renewal period ends; and (2) you’ve not paid allrent for the entire Lease Contract term or renewal period. Such conduct isconsidered a default for which we need not give you notice. Remainingrent also will be accelerated if you’re judicially evicted or move out whenwe demand because you’ve defaulted. Acceleration is subject to ourmitigation obligations below.Holdover. You or any occupant, invitee, or guest must not hold overbeyond the date contained in your move-out notice or our notice tovacate (or beyond a different move-out date agreed to by the partiesin writing). If a holdover occurs, then: (1) holdover rent is due inadvance on a daily basis and may become delinquent without noticeor demand; (2) rent for the holdover period will be increased by 25%over the then-existing rent, without notice; (3) you’ll be liable to us(subject to our mitigation duties) for all rent for the full term of thepreviously signed Lease Contract of a new resident who can’t occupybecause of the holdover; and (4) at our option, we may extend theLease Contract term—for up to one month from the date of notice ofLease Contract extension—by delivering written notice to you or yourapartment 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 statedto be rental discounts or concessions agreed to in writing, in addition toother sums due. Upon your default, we have all other legal remedies,including Lease Contract termination and statutory lockout underSection 92.0081, Texas Property Code, except as lockouts and liensare prohibited by Section 2306.6736, Texas Government Code, forowners supported by housing tax credit allocations. A prevailingparty may recover reasonable attorney’s fees and all other litigationcosts from the non-prevailing parties, except a party may not recoverattorney’s fees and litigation costs in connection with a party's claimsseeking personal injury, sentimental, exemplary or punitive damages.We may recover attorneys’ fees in connection with enforcing our rightsunder this Lease Contract. You agree that late charges are liquidateddamages and a reasonable estimate of such damages for our time,inconvenience, and overhead associated with collecting late rent (butare not for attorney’s fees and litigation costs). All unpaid amounts youowe, including judgments, bear 18% interest per year from due date,compounded annually. You must pay all collection-agency fees if youfail to pay all sums due within 10 days after we mail you a letterdemanding payment and stating that collection agency fees will beadded if you don’t pay all sums by that deadline.Mitigation of Damages. If you move out early, you’ll be subject toparagraph 11 and all other remedies. We’ll exercise customary diligenceto relet and minimize damages. We’ll credit all subsequent rent that weactually receive from subsequent residents against your liability for past-due and future rent and other sums due.

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• Your move-out notice must be in writing. Oral move-out noticewill not be accepted and will not terminate your Lease Contract.

• Your move-out notice must not terminate the Lease Contractsooner than the end of the Lease Contract term or renewal period.

• If we require you to give us more than 30 days written notice tomove-out before the end of the Lease Contract term, we will giveyou a written reminder not less than 5 days nor more than 90 daysbefore your deadline for giving us your written move-out notice.If we fail to provide a reminder notice, 30 days written notice tomove-out is required.

YOUR NOTICE IS NOT ACCEPTABLE IF IT DOES NOT COMPLYWITH ALL OF THE ABOVE. We recommend you use our writtenmove-out form to ensure you provide the information needed. Youmust obtain from us written acknowledgment that we receivedyour move-out notice. If we terminate the Lease Contract, we mustgive you the same advance notice—unless you are in default.

• Check the door viewer before answering the door. Don’t open thedoor if you don’t know the person or have any doubts. Children whoare old enough to take care of themselves should never let anyoneinside when home without an adult.

• Regularly check your security devices, smoke alarms and otherdetection devices to make sure they are working properly.Alarm and detection device batteries should be tested monthlyand replaced at least twice a year.

• Immediately report in writing (dated and signed) to us anyneeded repairs of security devices, doors, windows, smokealarms and other detection devices, as well as any othermalfunctioning safety devices on the property, such as brokenaccess gates, burned out exterior lights, etc.

• If your doors or windows are not secure due to a malfunctionor break-in, stay with a friend or neighbor until the problem isfixed.

• When you leave home, make sure someone knows where you’regoing and when you plan to be back.

• Lock your doors and leave a radio or TV playing softly whileyou’re gone. Close curtains, blinds and window shades at night.

• While gone for an extended period, secure your home and uselamp timers. Also stop all deliveries (such as newspaper andmail) or have these items picked up daily by a friend.

• Know at least two exit routes from your home, if possible.• Don’t 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 awell-lit area.

• Check the backseat before getting into your car. Be carefulstopping at gas stations or automatic-teller machines at night—or anytime when you suspect danger.

There are many other crime prevention tips readily available frompolice departments and others.

33. MISCELLANEOUS. Neither we nor any of our representatives have madeany oral promises, representations, or agreements. This Lease Contract is theentire agreement between you and us. Our representatives (includingmanagement personnel, employees, and agents) have no authority to waive,amend, or terminate this Lease Contract or any part of it, unless in writing, andno authority to make promises, representations, or agreements that imposesecurity duties or other obligations on us or our representatives unless inwriting. No action or omission by us will be considered a waiver of ourrights or of any subsequent violation, default, or time or place ofperformance. Our not enforcing or belatedly enforcing written-noticerequirements, rental due dates, acceleration, liens, or other rights isn’t awaiver under any circumstances. Except when notice or demand isrequired by statute, you waive any notice and demand for performancefrom us if you default. Written notice to or from our managers constitutesnotice to or from us. Any person giving a notice under this Lease Contractshould retain a copy of the memo, letter, or fax that was given, as well asany fax transmittal verification. Fax or electronic signatures are binding.All notices must be signed. Notices may not be given by email or otherelectronic transmission.

Exercising one remedy won’t constitute an election or waiver of otherremedies. Insurance subrogation is waived by all parties. Allremedies are cumulative. No employee, agent, or managementcompany is personally liable for any of our contractual, statutory,or other obligations merely by virtue of acting on our behalf. ThisLease Contract binds subsequent owners. Neither an invalid clausenor the omission of initials on any page invalidates this LeaseContract. All notices and documents may be in English and, at ouroption, in any language that you read or speak. All provisionsregarding our non-liability and non-duty apply to our employees,agents, and management companies. This Lease Contract issubordinate to existing and future recorded mortgages, unless theowner’s lender chooses otherwise. All Lease Contract obligationsmust be performed in the county where the apartment is located.

We may deactivate or not install keyless bolting devices on your doorsif: (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 aresatisfied.

37. MOVE-OUT NOTICE. Before moving out, you must give ourrepresentative advance written move-out notice as provided below.Your move-out notice will not release you from liability for the fullterm of the Lease Contract or renewal term. You will still be liablefor the entire Lease Contract term if you move out early (paragraph22) except under paragraphs 10, 16, 22, 23 or 31. YOUR MOVE-OUT NOTICE MUST COMPLY WITH EACH OF THEFOLLOWING:

• We must receive advance written notice of your move-out date.The advance notice must be at least the number of days of noticerequired in paragraph 3 or in special provisions—even if theLease Contract has become a month-to-month lease. If a move-out notice is received on the first, it will suffice for move-out onthe last day of the month of intended move-out, provided thatall other requirements below are met.

• The move-out date in your notice [check one]: ❒ must be the lastday of the month; or ❒ may be the exact day designated in yournotice. If neither is checked, the second applies.

Security Guidelines for Residents

General Clauses

APARTMENT LEASE CONTRACT © 2013, TEXAS APARTMENT ASSOCIATION, INC. PAGE 5 OF 6

When Moving Out

36. SECURITY GUIDELINES. We care about your safety and that of otheroccupants and guests. No security system is failsafe. Even the bestsystem can’t prevent crime. Always act as if security systems don’t existsince they are subject to malfunction, tampering, and human error. Wedisclaim any express or implied warranties of security. The best safetymeasures are the ones you perform as a matter of common sense and habit.

Inform all other occupants in your apartment, including any childrenyou may have, about these guidelines. We recommend that all residentsand occupants use common sense and follow crime prevention tips,such as those listed below:

• In case of emergency, call 911. Always report emergencies toauthorities first and then contact the management.

• Report any suspicious activity to the police first, and then followup with a written notice to us.

• Know your neighbors. Watching out for each other is one of thebest defenses against crime.

• Always be aware of your surroundings and avoid areas that arenot well-traveled or well-lit.

• Keep your keys handy at all times when walking to your car orhome.

• Do not go inside if you arrive home and find your door open. Callthe police from another location and ask them to meet you beforeentering.

• Make sure door locks, window latches and sliding glass doorsare properly secured at all times.

• Use the keyless deadbolt in your apartment when you are athome.

• Don’t put your name or address on your key ring or hide extra keys inobvious places, like under a flower pot. If you lose a key or have concernsabout key safety, we will rekey your locks at your expense, in accordancewith paragraph 9 of the Lease Contract.

Television channels that are provided may be changed during theLease Contract term if the change applies to all residents. Utilitiesmay be used only for normal household purposes and must not bewasted. If your electricity is ever interrupted, you must use onlybattery-operated lighting.

34. PAYMENTS. Payment of all sums is an independent covenant. Whenwe receive money, other than sale proceeds under paragraph 13 orutility payments subject to government regulation, we may apply it atour option and without notice first to any of your unpaid obligations,then to current rent. We may do so regardless of notations on checksor money orders and regardless of when the obligations arose. Allsums other than rent are due upon our demand. After the due date, wedo not have to accept the rent or any other payments.

35. TAA MEMBERSHIP. We represent that, at the time of signing thisLease Contract: (1) we; (2) the management company that representsus; or (3) any locator service that procured you is a member in goodstanding of both the Texas Apartment Association and the affiliatedlocal apartment association for the area where the apartment islocated. The member is either an owner/management companymember or an associate member doing business as a locator service(whose name and address must be disclosed on page 6). If not, thefollowing applies: (1) this Lease Contract is voidable at your optionand is unenforceable by us (except for property damages); and (2)we may not recover past or future rent or other charges. The aboveremedies also apply if both of the following occur: (1) the LeaseContract is automatically renewed on a month-to-month basis twoor more times after membership in TAA and the local association haslapsed; and (2) neither the owner nor the management company is amember of TAA and the local association at the time of the thirdautomatic renewal. A signed affidavit from the local affiliatedapartment association which attests to non-membership when theLease Contract or renewal was signed will be conclusive evidenceof non-membership. Governmental entities may use TAA forms if TAAagrees in writing.

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

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

ForForForForFormmmmmvalid forvalid forvalid forvalid forvalid for

members members members members membersonlyonlyonlyonlyonly

43. ORIGINALS AND ATTACHMENTS. This Lease Contract hasbeen executed in multiple originals, each with original signatures—one for you and one or more for us. Our rules and communitypolicies, if any, will be attached to the Lease Contract and given toyou at signing. When an Inventory and Condition form is completed,both you and we should retain a copy. The items checked below areattached to and become a part of this Lease Contract and are bindingeven 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❒ Renter’s 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 _________________________________________________________

38. MOVE-OUT PROCEDURES. The move-out date can’t be changedunless we and you both agree in writing. You won’t move out beforethe Lease Contract term or renewal period ends unless all rent for theentire Lease Contract term or renewal period is paid in full. Earlymove-out may result in reletting charges and acceleration of futurerent under paragraphs 11 and 32. You’re prohibited by law fromapplying any security deposit to rent. You won’t stay beyond thedate you are supposed to move out. All residents, guests, andoccupants must surrender or abandon the apartment before the 30-day period for deposit refund begins. You must give us and the U.S.Postal Service, in writing, each resident’s forwarding address.

39 . CLEANING. You must thoroughly clean the apartment, includingdoors, windows, furniture, bathrooms, kitchen appliances, patios,balconies, garages, carports, and storage rooms. You must followmove-out cleaning instructions if they have been provided. If youdon’t clean adequately, you’ll be liable for reasonable cleaningcharges—including charges for cleaning carpets, draperies, furniture,walls, etc. that are soiled beyond normal wear (that is, wear or soilingthat occurs without negligence, carelessness, accident, or abuse).

40 . MOVE-OUT INSPECTION. You should meet with ourrepresentative for a move-out inspection. Our representative has noauthority to bind or limit us regarding deductions for repairs, damages,or charges. Any statements or estimates by us or our representativeare subject to our correction, modification, or disapproval before finalrefunding or accounting.

41. SECURITY DEPOSIT DEDUCTIONS AND OTHER CHARGES.You’ll be liable for the following charges, if applicable: unpaid rent;unpaid utilities; unreimbursed service charges; repairs or damagescaused by negligence, carelessness, accident, or abuse, includingstickers, scratches, tears, burns, stains, or unapproved holes;replacement cost of our property that was in or attached to theapartment and is missing; replacing dead or missing alarm ordetection 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 havemoved out); trips to open the apartment when you or any guest oroccupant is missing a key; unreturned keys; missing or burned-outlight bulbs; removing or rekeying unauthorized security devices oralarm systems; agreed reletting charges; packing, removing, orstoring property removed or stored under paragraph 13; removingor booting illegally parked vehicles; special trips for trash removalcaused by parked vehicles blocking dumpsters; false security-alarm

charges unless due to our negligence; animal-related charges underparagraphs 6 and 27; government fees or fines against us forviolation (by you, your occupants, or guests) of local ordinancesrelating to alarms and detection devices, false alarms, recycling, orother matters; late-payment and returned-check charges; a charge(not to exceed $100) for our time and inconvenience in our lawfulremoval of an animal or in any valid eviction proceeding against you,plus attorney’s fees, court costs, and filing fees actually paid; andother sums due under this Lease Contract.

You’ll be liable to us for: (1) charges for replacing all keys and accessdevices referenced in paragraph 5 if you fail to return them on or beforeyour actual move-out date; (2) accelerated rent if you have violatedparagraph 32; and (3) a reletting fee if you have violated paragraph 11.

42. DEPOSIT RETURN, SURRENDER, AND ABANDONMENT.We’ll mail you your security deposit refund (less lawfuldeductions) and an itemized accounting of any deductions no laterthan 30 days after surrender or abandonment, unless statutesprovide otherwise.

You have surrendered the apartment when: (1) the move-out date haspassed and no one is living in the apartment in our reasonablejudgment; or (2) apartment keys and access devices listed in paragraph5 have been turned in to us—whichever date occurs first.

You have abandoned the apartment when all of the following haveoccurred: (1) everyone appears to have moved out in our reasonablejudgment; (2) clothes, furniture, and personal belongings have beensubstantially removed in our reasonable judgment; (3) you’ve beenin default for non-payment of rent for 5 consecutive days, or water,gas, or electric service for the apartment not connected in our namehas been terminated or transferred; and (4) you’ve not responded for2 days to our notice left on the inside of the main entry door, statingthat 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 ofpossession for all purposes and gives us the immediate right to: cleanup, make repairs in, and relet the apartment; determine any securitydeposit deductions; and remove property left in the apartment.Surrender, abandonment, and judicial eviction affect your rights toproperty left in the apartment (paragraph 13), but do not affect ourmitigation obligations (paragraph 32).

Name, address and telephone number of locator service (if applicable—must be completed to verify TAA membership under paragraph 35):

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

APARTMENT LEASE CONTRACT TAA Official Statewide Form 13-A/B-1/B-2; Revised October, 2013; Copyright 2013, Texas Apartment Association, Inc. PAGE 6 OF 6

Signatures, Originals and Attachments

You are legally bound by this document.Please read it carefully.

Before submitting a rental applicationor 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 madein the Lease Contract if agreed to in writing by all parties.

You are entitled to receive an original of this Lease Contractafter 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 Owner’s Representative (signing on behalf of owner)

_________________________________________________________________________________________________________________

Address and phone number of owner’s representative for notice purposes

_________________________________________________________________

______________________________________________________________

______________________________________________________________________________

After-hours phone number____________________________________________

(Always call 911 for police, fire or medical emergencies.)

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

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

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

form HUD-52641-A (8/2009)Previous editions are obsolete ref Handbook 7420.8

�TENANCY ADDENDUM Section 8 Tenant-Based Assistance Housing Choice Voucher Program (To be attached to Tenant Lease) ������������������������������������������������������������������������������� Section 8 Voucher Program��� ��� ����� � ��� ������� ��� ��� ��������� �� ��� ������

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

1 of 4

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

form HUD-52641-A (8/2009)Previous editions are obsolete ref Handbook 7420.8

������ ��� ������� ���������������� ������������������������ ���

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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 68 of 70

form HUD-52641-A (8/2009)Previous editions are obsolete ref Handbook 7420.8

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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 69 of 70

form HUD-52641-A (8/2009)Previous editions are obsolete ref Handbook 7420.8

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��+�� Prohibition of Discrimination�*�� ��� ����� ����� ���������� 1���� �� ������� �������'� 50������- � �'� ���� ��������'� ��� �� ������ ��� ���� ������� �������� ����� ��� ������ �� ��'� �� '� �����'� �0'� �������� ����'� ��'����������������� ���������������������������������������/�� Conflict with Other Provisions of Leas��� ��� ��� � ��� �� ��� ������� �������� � � � �� ����

��� #!"� ��� ��� ����� ����� A� ��� ���� ���� �������'� ��� �� �������� � � A� ��� ���������� ����� ������ ���� �������� ������� ��� � ��� ������ ������ �� � �����

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� ��� ����� ������ ������ ���%#$��� ���� ������� ������ ������ �� ��� ��� ���� � ��� ����� ��0���������� � ���� ����� ������� �� ���� ����'� ���� ��������� �� ��� ��� �� �� � �������� ���� ������� �� ������ ���� ��� 0��� ��� ������� ���� � ��� ����� ��� ���� ������ �� ����� � �� �������� ���%#$������� ����������#!"� 1�� �������

��6�� Notices��$����������� ��������������������������� � ��������� ����������������������� ����������9�� Definitions��Contract unit����������������� ���������������������������������� ����� � ����

Family������ ����������� ��������������������������������� ����� � ����HAP contract��������������������������������� ������������%#$���������� �����%#$�������������������������������������� ������� �������������#$%���� �����Household������ ����������� ������������� ������������������������������������������������%#$,��� ������,���������$����,������������� ������ ������������������� ��������� ������ ����� ������ ������ ����������������������� �������������������� �Housing quality standards (HQS)�����#!"���������1������������� ���� ������������������� �����������������,������ � �����HUD.����!����"�� �������#����������! ����"��������HUD requirements��#!"� 1�� ������ ������������� � ����#!"� 1�� ������ ����������#!"����1�� � �'���� ��������'�A� ���3���� ������� ��� ���������� � ����� ��������Lease������ ������� �������������� ��������������� ���������������� ������������������������������������������������������� �� �������#!"���PHA��%������#������$������Premises�������������� �����0���������������� �����������������'����������������� �������� ������Program����������������������������� �� � ����Rent to owner����������������� ����������������� �� ������� ������������� ������� ����������������� ������ ������������������������������%#$�������������������������������� ��Section 8���������������!�����������#������$������=+9��/)�!�����������&���/+9� ��Tenant��������������� �� ���� � ������������������ ������� ���Voucher program����������������������������� �� � ����!�� ������� � ��'�#!"�� ���������������%#$�� � �������������������������������������������������� ���������������������������� ������������ ������������� �������� �� � �����

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

4 of 4

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