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Apartment Association of Tarrant County Settles Inspection Fees Dispute

rental housing inspection program
November 2019

The Apartment Association of Tarrant County’s (AATC) Board of Directors has approved a settlement agreement with the City of Bedford that ends more than three years of litigation over the city’s adoption of a new rental housing inspection program and fee schedule.

The settlement, which the city council approved in October, cuts the current inspection fees in half and provides property owners a 30-day opportunity to cure problems and achieve a higher tier rating if they address all inspection deficiencies.

Settlement Terms

Terms outlined in the settlement and incorporated into a new ordinance and fee schedule include:

  • Removing the $13.20 per apartment home per year license fee
  • Increasing the inspection fee from $10 to $15 per apartment home per year
  • Reducing required annual inspections to only one, rather than a minimum of two
  • Scheduling required subsequent inspections as follows:
    • For tier-1 communities, no subsequent mandatory inspection rather than two
    • For tier-2 communities, only one additional subsequent mandatory inspection rather than three
    • For tier-3 communities, only two additional subsequent mandatory inspections rather than four
    • Tier designations will be established with the first annual inspection, so the first inspection under the new ordinance will be very important.

In addition to the three tier designations above, the new ordinance will include the following:

  • Opportunity to Cure: The city will establish a 30-day opportunity to cure, exclusive of serious life, health and safety issues which must be promptly addressed. This 30-day period can be used to allow communities to address any and/or all inspection violations, thereby achieving a higher (or lower) tier rating. Follow-up inspections will focus on deficiencies identified during the initial inspection.
  • Advance notice of inspections: The city will provide five business days advance notice of inspections, as well as accommodate one reset to help avoid weather-related score deductions. Surprise inspections will not be allowed.
  • Fees tied to CPI for two years: The city agrees inspection fees will not be increased above the CPI (Consumer Price Index, All Urban Inflation Rate) for two years.
  • Appeals: Designates the existing Building & Standards Commission to hear inspection appeals.
     

AATC Concessions

To reach this settlement, AATC:

  • Released the City of Bedford from all claims in its lawsuit
  • Agreed to pay its own attorney fees (more than $220,000)
  • Accepted the tier-system for classifying communities based on past inspections
  • Dropped its lawsuit and the opportunity to establish a state- wide legal precedent that constrains municipal fees

This outcome would not have been possible without the persistent support of the AATC leadership team, stakeholders and, most importantly, Bedford owner/management members. Special thanks to our association partners the Apartment Association of Greater Dallas, the Texas Apartment Association and NAA for their encouragement and support.

AATC extends thanks to:

  •  Jim Canon (Highmark Residential) and Michael Payne (Allmark Properties), whose industry knowledge, operational insights and negotiation skills made the agreement possible
  • Tony Comparin (Alliance Tax Advisors), who hosted both mediation conferences and worked behind the scenes for more than two years to ensure a successful resolution
  • Israel Suster, Will Sweet, John Cayce, & Byron Henry (AATC’s legal team), for forcefully advocating on AATC’s behalf and providing the legal wisdom necessary to guide AATC through a complex process

Michael Payne is Vice President of Texas Operations for Allmark Properties and Treasurer of the Apartment Association of Tarrant County. Contact AATC Director of Government Affairs Perry Pillow via email or at 817-616-0354 for information.