Lease Can Apply Residential Law to Office

A tenant leased a house to use as a law office. The parties used a pre-printed residential lease form and made handwritten changes to turn it into a commercial lease. The lease form said that “Chapter 92 of the Texas Property Code” would control the parties' security deposit obligations. Chapter 92 applies to owners and tenants of residential properties. After the lease ended, the owner returned part of the security deposit to the tenant, but deducted certain cleaning and repair costs. The tenant sued for the return of the rest of the security deposit, saying Chapter 92 didn't permit those deductions. The owner argued that Chapter 92 didn't apply to a lease of commercial property.

A Texas appeals court ruled that the owner must refund the rest of the security deposit because Chapter 92 applied. The parties were entitled to select the terms of their lease—even residential property terms. The lease's security deposit clause was conspicuous and the parties made handwritten changes to it, indicating that they were aware of it and intended to include it in the lease, the court said. The court wouldn't rewrite the lease's terms simply because the owner disliked their application [Cotter v. Tobey].