Breaking Conventions with Lofty Expectations -- the New Consumer of Legal Services

I recently returned from a seminar called Lawyernomics. It is presented annually by legal directory company Avvo (tagline: Legal. Easier). I believe this year was the 7th installation of the seminar, but it was my first attending.  

Avvo is one of those newer (founded in 2006), west coast (based in Seattle) enterprises founded by former tech company hotshots who made a name (and presumably a bundle of money) for themselves in the legal department of other (non-legal) internet services companies. It was a start-up, but has now launched a national TV commercial campaign, so it is fair to say that Avvo has arrived in the theater of general public relevance.   

Admittedly, I admire the Avvo founders' entrepreneurship, and applaud anybody who can make a profitable career in law without struggling with the many pitfalls that come in the form of clients, other lawyers, judges, cashflow problems, deadlines, and never-ending stress.  I do, however, struggle with understanding Avvo's exact business model, and whether it intends to be consumer-oriented, lawyer-oriented, or simply a broker that brings the two together and gets paid a fee by one or both (think eHarmony with a legal slant).  Others are equally confounded, and Avvo has certainly drawn its share of critics, including Avvowatch, whose members seem to be particularly upset with the CEO. 

All in all, the seminar was good (at some times excellent), and I gleaned some very valuable information and perspective. The theme was "The New Legal Consumer," and the lawyer-attendees were treated to a wealth of information about: 1) what potential clients are looking for when they go online to look for lawyers; 2) what these consumers already know and are likely to do with the lawyer websites their searches return; and 3) how to cater to their "modern" consumer desires.

Much of the information was backed by statistics and what appears to be thorough research (though I'm unsure whether it has been peer-reviewed or put through any of the rigors of the "gatekeeper" test for admissibility under Havner and/or Daubert).  

The resounding narrative of the presentations was that modern consumers of legal services (i.e potential clients) are sophisticated, knowledgeable, independent, "informed/connected/picky," and prefer their legal services to be: "simple, mobile, On-demand" and utilitarian to a "Do It Yourself" approach to solving legal problems.  

In a nutshell, they (in my words) desire a quick, remote, inexpensive and limited/defined interaction with a lawyer vetted by them in advance.  

As I wondered about how legitimate this analysis consumer desires was, my Facebook newsfeed hit me with somewhat correlative proof in the form of an "Open Letter from Millennials to the Real Estate Industry." It states, in relevant part: 

Everything I buy is on-demand. Running out of soap? Amazon will have it here tomorrow. Need a ride? There is an Uber around the corner. Wondering which country has the highest coffee consumption per person? My phone can tell me instantly. If I want to watch my favorite TV show I don’t wait for a marathon or even go buy the DVD. I expect it to stream on any device, at any time for minimal cost to me. My life is built around efficiency and convenience. Keep in mind that most of us can’t even remember a time before we had cell phones permanently within arms reach.

WOW, I thought, maybe there is something to this "new consumer."  And boy are they demanding...  

Both during the seminar, and for the few days since,  I've kept thinking that this all sounds so inherently un-personal. Kinda like Lawyer = Uber driver, being someone you converse with on a very temporary  superficial level as they provide you with an on-demand service. 

Truth be told, at 43, I'm just old enough (Gen X) to not like the concept of the "new consumer" who wants to order fixed price, bundled, on-demand legal services off of a "menu."  I don't like it one bit.

The romanticized lawyers of my youth were trusted advisors and friends; principled advocates for a cause  (Lt. Daniel Kafee; Atticus Finch; Jake Brigance), and sometimes even family (Tom Hagan, Consigliere). True life lawyers such as the OJ Simpson defense team also acted as collaborators with their clients.  Most importantly, I frequently describe my own practice as "relationship-driven," and many clients have become good friends with who I socialize. I have represented several of them for a decade or more.  

It is difficult to fathom basing my law practice on selling legal forms online, offering "quick answers" through online chats with internet tire-kickers, or furnishing legal advice on Facebook for the person who wants a DIY solution.  But, if this is truly what the "new legal consumer" desires, many lawyers -- particularly young ones or those in saturated and competitive practice areas -- will be forced to offer services in that format or starve. 

I recognize the validity of giving the consumer the product (in this case the product is legal service) they want. But, with any luck at all, I'll be able to maintain my "look you in the eye and tell it like it is" approach to getting and keeping  clients who trust me to "do what it takes" to get the results they need without churning the fees. After all, it has worked for almost 20 years, and I enjoy few things more than an "old" client contacting me years later for something "new." 

TENANT's PERSONAL PROPERTY -- ADEQUATE COLLATERAL FOR UNPAID RENTS?

Is the landlord ever justified in seizing a Tenant's property?

Yes, but only if the Tenant is delinquent on the rent and the lease gives the landlord a lien on the Tenant's property. Such a provision must be underlined or in bold print in the lease.

In seizing the property under a landlord's lien, the landlord may not take exempt property, but may remove non-essential items (TVs, stereos, VCRs, CD players), provided s/he can enter the apartment peacefully. But s/he must do the following:

The landlord must leave a notice of entry along with a written inventory of the items removed.
The notice must state the name, address, telephone number of the person whom the tenant may contact about the amount owed.
The notice must show the amount of delinquent rent and state that the items will be promptly returned when the full amount of delinquent rent is paid.
The landlord cannot collect or charge for parking, removing, or storing items unless authorized previously in a written lease.
In addition, a landlord may remove property if a tenant abandons the unit. If a landlord obtains a court order of eviction, the landlord may also remove the tenant's property, but this must be done under the supervision of a law officer.

Can the landlord sell a Tenant's possessions in order to recover back rent?

Unless otherwise permitted in the written lease, any property seized by a landlord under a landlord's lien cannot be sold or disposed of. If the lease permits such a sale, the landlord must give the tenant 30 days written notice before the date of the sale. This notice must be sent to the tenant by both first class and certified mail, or Return Receipt Requested at the tenant's last known address.

FAQ -- SECURITY DEPOSITS

What is the purpose of a security deposit?

The security deposit law serves as a protection for the landlord. The deposit can be used to cover costs for which the tenant is liable by providing some sort of collateral to protect a landlord's property against abuse by the tenant and by recapturing actual financial losses as a result of the tenant's breach of a lease. Texas law protects the right of renters to get their deposit back.

Can I assume that my security deposit will automatically cover the last month's rent?

No, not automatically. Normally, the tenant cannot deduct the security deposit from the last month's rent without permission from the landlord. Assuming that the security deposit will cover the rent / balance of the rent and therefore withholding payment, constitutes a lease violation for which the tenant may be evicted. In addition, a tenant who withholds the last month's rent may be liable for an amount equal to three times the amount of the rent wrongfully withheld and the landlord's reasonable attorney's fees.

I've just moved out of my rental unit. When can I expect to receive my security deposit?

According to the Texas Property Code, a tenant has the right to receive his / her security deposit (or the balance of the security deposit with a list of itemized deductions) on / before the 30th day after leaving a dwelling, provided the tenant has given the landlord written notice of her forwarding address for the return of her deposit. For more information, see Procedure to Refund.

Are there any qualifications to my receiving my security deposit?

Yes. You should receive your security deposit provided you have met the following conditions:

Your lease term has ended
You have given thirty days written notice prior to leaving the dwelling
You do not owe any back rent or other charges
You have not damaged the apartment in excess of normal wear and tear

Is it true that if I do not provide my forwarding address, I lose my deposit?

No, but the landlord is not required to return a deposit until 30 days after the tenant
moves out or 30 days after the landlord receives the tenant's forwarding address in writing.

I've received my security deposit, but not the full amount. Is my landlord required to provide an itemized account of deductions?

Yes, unless the tenant owes rent and there is no dispute over the amount owed. Otherwise, the landlord must provide an itemized list of deductions within 30 days. If the landlord doesn't include an account of itemized deductions within 30 days, s/he may forfeit the right to withhold any part of the deposit and may be liable for court costs, statutory penalties and attorney's fees. If the deposit is not returned in full within 30 days, and the court finds that the landlord acted in bad faith, the landlord can be held liable for $100 and three times the amount of the deposit wrongfully withheld, plus attorney's fees and court costs.

Can the landlord deduct from my security deposit for normal wear and tear on the unit?

No. Landlords cannot charge for normal wear and tear on the apartment. For example, the landlord should not charge for such routine procedures as shampooing the carpet or painting the unit, unless there are egregious stains, damages, etc.


If my landlord fails to return my deposit within 30 days, can I receive more than the amount of the security deposit?

Not necessarily. A tenant will receive more than the amount of the security deposit only if it can be proven in court that the landlord acted in bad faith.

My rental unit is about to be sold. Will I lose my security deposit?No. Under Texas law, there is no requirement that the landlord put the security deposit into an escrow account to be transferred to the new owner. Nor is there an automatic transfer of security deposits to new owners. The old landlord is still responsible for returning all security deposits to tenants until the new owner gives the tenant a signed statement that s/he has received and is responsible for the security deposits.

I've decided not to take an apartment, after all, despite signing the lease. Can I get my security deposit back?

Texas does not have a Buyer's Remorse Law, so the lease becomes binding as soon as it is signed. Many rental application forms allow the landlord to keep the entire deposit if the tenant is approved and then decides not to sign the lease. Even if there is no written agreement about the deposit, the landlord is entitled to recover out-of-pocket expenses (including advertising and lost rent) after taking the property off the market.

However, if the tenant secures a replacement tenant, approved by the landlord, the landlord may not keep the deposit if the replacement tenant occupies the unit by the date the lease was to begin. On the other hand, if the landlord secures the replacement tenant, s/he may keep a sum agreed to in the lease as a cancellation fee or the actual expenses incurred by the landlord.

Laws Setting-forth important rights you have as a homebuyer

When buying a home, you should consider several important considerations. Among them are finding competent representatives knowledgable in real estate and law to assist you. You should also be aware that the following provisions of law establish and protect your important rights as a homebuyer:

Consumer Credit Protection Act (1960) - Guarantees confidentiality of credit reports and allows consumers to correct inaccurate information in their reports.
Equal Credit Opportunity Act of 1975 (ECOA) - Prohibits the discrimination in any credit action based on race, sex, marital status, color, religion, age, handicap, or national origin.
Equal Housing Opportunity - Prohibits housing discrimination based on race, sex, marital status, color, religion, age, handicap, family status or national origin.
Fair Housing Act - Prohibits the discrimination based on race, sex, marital status, handicap, or national origin in any real estate transaction.
Federal Consumer Credit Protection Act (commonly known as the Truth in Lending Act) (1969) - Requires that lenders disclose the actual terms and conditions of a loan before an applicant commits to the loan.
Home Mortgage Disclosure Act (1975) - Provides information to help determine whether public institutions are assisting the housing needs of their communities and neighborhoods.
Real Estate Settlement Procedures Act of 1974 (RESPA) - Encouraging homeownership through consumer protection, this act regulates certain lending actions related to closing/settlement. Some of its provisions are:
RESPA requires lenders to provide buyers a good faith estimate of the cost of the loan, including disclosure of the Annual Percentage Rate (APR). RESPA requires lenders to provide buyers with general information about settlement costs. Lenders must provide buyers a copy of the Mortgage Servicing Disclosure Statement, regarding loan servicing and transfer. Within three days after receiving the loan application, lenders must provide the buyer with an estimate of closing costs and monthly payments. RESPA provides the borrower the opportunity to see the HUD-1 Settlement Statement one day before the actual settlement. Prohibits kickbacks between Real Estate professionals for referrals and prohibits fee-splitting and receiving unearned fees for services not rendered.
Regulation B of the Consumer Credit Protection Act - Requires lenders to inform potential borrowers of any adverse actions taken on their loan applications.
Regulation Z - Includes regulations related to consumer credit disclosures identified in the Consumer Credit Protection Act.
Veterans Housing Benefits Act (1978) - Increases the housing benefits for eligible veterans including increased loan amounts.

Trey Wilson is an experienced real estate lawyer in San Antonio. In addition, he is a licensed real estate agent, and is intimately familiar with the laws affecting buyers and sellers of real property in Texas. Trey Wilson was voted as one of San Antonio's best real estate litigation lawyers in San Antonio in August 2008.