Property Management Insurance for Texas firms.

Three things make Texas PM E&O risk profile unlike any other state's:

1. PM activity is licensed under TREC, not a separate PM board. Texas Occupations Code § 1101.002 defines property management as licensed real estate activity — meaning Texas PMs hold the same broker / salesperson license as agents, and answer to the same Texas Real Estate Commission. Discipline runs through TREC, not a dedicated PM regulator. Most other states (CA, FL, NY) separate the two.

2. The eviction process is the fastest in the nation. Under Texas Property Code § 24.005, a residential landlord can issue a 3-day notice to vacate for nonpayment of rent, then file an eviction (forcible detainer) in Justice Court the day after the notice expires. Hearings are scheduled within 10–21 days; appeals get a de novo trial in County Court within 8 days of perfecting the appeal. The whole process — notice through judgment — can take under 30 days. Speed is a feature for landlords and a liability minefield for PMs. The most common Texas PM E&O claim is wrongful eviction or retaliatory eviction, where the procedure was correct but the notice, the underlying basis, or the timing was defective.

3. The TAA Residential Lease is the de-facto state lease. The Texas Apartment Association's residential lease form is used by approximately 70–80% of professional Texas property managers. The TAA lease has been litigated extensively — its terms are well-tested — but PMs who modify the lease without legal review, or who use a non-TAA form for some properties and the TAA form for others, create the inconsistency that drives claims.

Layer on Chapter 92's prescriptive duty-to-repair regime, the § 92.0563 tenant-remedy framework (rent abatement, repair-and-deduct, lease termination), and HOA management exposure under Property Code Chapters 209 and 82, and the Texas PM book is a markedly different underwriting class from the sales-side agent book.

Texas Property Code Chapter 92 is the single most important statute for Texas property managers. Five subsections drive the bulk of E&O claims:

§ 92.052 — Landlord's duty to repair or remedy. Triggered when the condition (a) materially affects physical health or safety, *and* (b) the tenant has given written notice of the condition and is current on rent. Failure to repair within a reasonable period exposes the landlord to § 92.0563 remedies. The PM's process for receiving, documenting, and resolving repair requests is the single highest-leverage piece of process control in a Texas PM operation.

§ 92.0563 — Tenant's remedies. Where the duty to repair is breached, the tenant can (a) terminate the lease, (b) sue for damages, including one month's rent plus $500, (c) obtain a court order requiring repair, or (d) deduct from rent the cost of the repair under specified conditions. The damages are statutory — meaning the tenant doesn't have to prove harm to recover.

§ 92.103 — Security deposit return. 30 days from surrender of premises. Itemized accounting required if any portion is retained. Failure to comply creates a presumption of bad faith and exposes the landlord to 3x the amount wrongfully withheld plus $100 plus attorney's fees under § 92.109.

§ 92.331 — Retaliation prohibited. Strict-liability framework: any rent increase, eviction action, refusal to renew, or service cutoff within 6 months of a tenant's protected activity (complaint to landlord, code authority, or tenant organization) is presumptively retaliatory. The tenant doesn't need to prove motive.

§ 92.0081 — Interruption of utilities. Landlords cannot interrupt utilities to force tenant action. Self-help eviction (lockouts, utility cutoffs) is statutorily prohibited under § 92.0081 and § 92.008.

The Texas PM E&O claim distribution mirrors this statute almost exactly — retaliatory-action claims, repair-and-remedy disputes, and deposit suits together account for 60%+ of notices.

Texas runs four distinct PM markets, each with its own claim profile:

Texas-specific premium drivers:

• SFR investor concentration. Texas leads the country in institutional single-family rental ownership (Invitation Homes, American Homes 4 Rent, Tricon Residential). PMs managing institutional portfolios face contract-driven SLAs and indemnity provisions that are stricter than mom-and-pop owner agreements. Premium loads ~15% above state baseline for institutional-heavy books.
• Post-Harvey flood disclosure (Prop. Code § 5.008(b)(13)). Houston-area PMs face elevated mold and flood-history disclosure obligations carried through from sales-side requirements. STR-style short-term leases trigger the disclosure obligations every turn.
• HOA management overlap. Texas Property Code Chapter 209 (Texas Residential Property Owners Protection Act) and Chapter 82 (Texas Uniform Condominium Act) govern PM-managed HOAs. Foreclosure, fine-collection, and assessment-disclosure disputes are concentrated in HOA management — a separate exposure layer from tenant-side risk.
• Vacation rentals (STR). Austin (Travis County), Galveston, and Hill Country (Fredericksburg, Kerrville) generate STR volume with local ordinance variation. Travis County's recent enforcement push has driven new claim categories.

Texas PM premium typically scales $1,400–$5,000/year depending on door count, metro mix, and exposure layers (HOA management, STR, institutional SFR). The mom-and-pop 100-door operator and the 5,000-door regional PM are different underwriting classes; the policy form has to match.

Three policy-form realities matter most for Texas property managers:

1. TREC Rule § 535.93 reaches PM activity. The $1M E&O minimum for brokerage entities applies to property management firms operated through a broker entity — the same way it applies to sales-side brokerages. Below the $1M floor is a TREC discipline exposure on top of the underlying claim.

2. Chapter 92 statutory damages aren't trivial. § 92.109 allows treble damages on wrongfully withheld security deposits (3x deposit + $100 + attorney's fees). § 92.0563 allows statutory $500 + one month's rent for repair-and-remedy violations. § 92.331 retaliation damages can reach a month's rent + $500 + actual damages + attorney's fees. The aggregate exposure on a single problematic tenant can easily exceed $10K — fees-shifting drives most cases to settle in the $5K–$30K range with the PM's E&O carrier covering the bulk.

3. Eviction-procedure errors aren't "intentional acts." Even when a Texas PM hits every § 24.005 timing requirement, defects in the underlying notice (incorrect tenant names, wrong unit number, ambiguous reason for termination) defeat the eviction and expose the PM. Most generic E&O policies handle eviction-procedure errors poorly; PM-specific endorsements typically have to be requested and underwritten explicitly.

Recommended limits for Texas PMs:

• 100–300 doors: $1M / $2M baseline (TREC § 535.93 floor), Chapter 92 statutory-damages defense, TAA-lease coverage
• 300–1,000 doors: $1M / $3M, defense outside the limits, HOA-management endorsement if applicable, eviction-procedure rider
• 1,000+ doors / institutional SFR / multi-metro: $2M / $5M minimum, contract-indemnity coverage for institutional management agreements, STR endorsement if Austin / Hill Country / Galveston exposure

PBI Group's preferred Texas PM policy form (Palomar, admitted in TX) carries TAA-lease defense language, Chapter 92 statutory-damages coverage, HOA-management endorsement availability, and defense outside the limits as standard. Most institutional SFR management contracts require the PM to name the property owner as additional insured — verify the policy form allows this without per-property endorsement fees.