If you鈥檙e a renter in Texas and you fail to pay your rent, your landlord may have the legal right to enter your home and take your belongings. The clause, called a landlord鈥檚 lien, is standard language , but it can also apply to stores and restaurants that fall behind on rent.
owns and manages luxury apartment complexes around the country. Many of those developments also rent space to restaurants and retail stores. Those are the tenants Jason Ricks works with.
鈥淢y job and the way I see it is, I鈥檓 making decisions like a landlord and how it鈥檚 going to affect the bottom line,鈥� says Ricks, AMLI's vice president of retail asset management.
Ricks works with commercial tenants in Texas that have leases which include , allowing the landlord to take possession of property and sell it to recoup money for unpaid rent. The process can be complicated with residential property because there are restrictions on what personal items a landlord can take. The rules are somewhat easier to navigate on the commercial side, Ricks says, because of the kind of property that鈥檚 being seized.
He says it鈥檚 never easy to come to that decision, though.
鈥淚 love what I do, but I鈥檒l be honest 鈥� this is my least favorite part of the job,鈥� Ricks says. 鈥淚 have a lot of empathy for our tenants, and I look at each kind of deal as a partnership, and the last thing that we ever want to do is really kind of take back their personal property. As one of my first mentors told me, we鈥檙e not in the furniture business, so we really don鈥檛 want to have a lot of this extra product and having to get rid of it.鈥�
Ricks says seizing property is time-consuming and, even if a landlord is able to sell items, it's usually only for a fraction of their value. If the business owes money to other people, that makes the process even more complicated.
While Texas has a reputation for being landlord-friendly, other states offer more protections for renters. In Ohio, tenants to a lien on their property.
Andrew Perry, a principal with the , often represents commercial real estate lenders. He says they obviously don鈥檛 want the tenants they work with to suffer a financial loss.
鈥淚f there is something in the lease on that particular point, we鈥檒l typically cross it out because from our standpoint, the landlord is made whole by getting their property back,鈥� Perry says.
In Ohio, Perry says, landlord鈥檚 liens are not actually .
鈥淣ow that doesn鈥檛 necessarily mean that under common law, that the landlord won鈥檛 try to grab the possessions of the tenant,鈥� Perry says.
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