Dallas Calls a Half-Leased Building Vacant: Chapter 48B, the 50 Percent Rule, and the Four-Foot Sign Outside Downtown

Most owners assume “vacant” means empty. Dallas does not. Under Chapter 48B of the city code a building is vacant unless people are using at least half of it, and using it under a valid certificate of occupancy. That one definition pulls in a large number of partly leased office buildings, strip centres and warehouses whose owners have no idea the chapter reaches them.

The two definitions that do the work sit next to each other. Sec. 48B-2(7): “OCCUPIED means that one or more persons conduct business in or reside in at least 50 percent of the total area of a building (excluding stairwells, elevator shafts, and mechanical rooms) as the legal or equitable owner, operator, lessee, or invitee on a permanent, nontransient basis pursuant to and within the scope of a valid certificate of occupancy.” And Sec. 48B-2(15): “VACANT BUILDING means a building that, regardless of its structural condition, is not occupied.”

Two things follow that catch people out. A building at 40 percent occupancy is vacant even though tenants are paying rent and the lights are on. And occupancy only counts if it is “within the scope of a valid certificate of occupancy”, so a tenant whose use has drifted outside what the certificate permits is not contributing to the 50 percent. Dallas requires a certificate for the use: “a person shall not use or occupy or change the use or occupancy of a building, a portion of a building, or land without obtaining a certificate of occupancy from the building official” (Sec. 51A-1.104).

“Regardless of its structural condition” removes the other common assumption. The building does not have to be derelict, unsecured or blighted. Condition is irrelevant to whether the chapter applies. For the separate question of what condition the city can require once it is involved, see our guide to Dallas vacant property rules under Chapter 27 and Chapter 48B.

Chapter 48B Is Two Different Programmes

Which rules apply depends on which side of a freeway loop the building sits on. Inside the central business district — bounded by Woodall Rodgers Freeway on the north, Central Expressway (elevated bypass) on the east, R. L. Thornton Freeway on the south and Stemmons Freeway on the west (Sec. 48B-2(3)) — registration is required as soon as the building is vacant: “A person commits an offense if the person owns or operates a vacant building in the central business district without a valid certificate of registration” (Sec. 48B-6(a)).

Outside the central business district, registration is triggered only by a code enforcement history. Sec. 48B-19(a) makes it an offence to own or operate a vacant building or vacant lot there without a certificate “and has at least two non-complied property maintenance violations during any six-month period.” Two non-complied violations in six months makes it a basic property. Three or more makes it a problem property (Sec. 48B-2(1), (11)).

The violations that count are listed at Sec. 48B-2(12): high weeds, litter, obstruction of alleys, sidewalks or streets, signs in the public right of way, bulky trash, substandard structures, junk motor vehicles, illegal dumping, illegal outside storage, and graffiti. So for most commercial property in Dallas the practical rule is simple. Keep the grounds and the exterior clean and the registration requirement never starts. Let two citations go uncorrected inside six months and it does, and the obligations that follow are not trivial.

There is a trap in the difference. Inside the central business district, several vacant buildings at one street address need only one certificate between them, and a single building spanning several addresses also needs only one (Sec. 48B-6(a)). Outside it the rule inverts: “If more than one vacant building is located at the same street address, a certificate of registration is required for each separate vacant building” (Sec. 48B-19(a)). An owner of a multi-building industrial park outside downtown registers every building separately.

What Downtown Requires

These obligations apply inside the central business district only. The first is commercial general liability insurance, and it is a precondition rather than a consequence: proof of insurance forms part of the application itself (Sec. 48B-7(a)(6)). Sec. 48B-16(a) requires the registrant to procure it “prior to the issuance of a certificate of registration, and keep in full force and effect at all times during the registration term”, with limits “not less than $1,000,000 for each occurrence and $2,000,000 annual aggregate.”

The policy must name the city and its officers and employees as additional insureds and provide 30 days written notice of cancellation, non-renewal or material change (Sec. 48B-16(b)), and an updated certificate of insurance goes to the director every six months (Sec. 48B-16(c)).

The second is a written vacant building plan, due within 30 days of the certificate being issued. Sec. 48B-17(b) requires five things: a plan and timetable to correct existing violations; a plan to keep the building in compliance; a plan to keep it safe and secure, “including but not limited to any provisions for lighting, security patrols, alarm systems, fire suppression systems, and securing the building from unauthorized entry”; a plan and timetable for occupying or selling it, including marketing; and a plan and timetable for any demolition. It must be updated at least every six months (Sec. 48B-17(c)).

The third is proof that the property taxes are paid. The application must include “documentary evidence of payment of ad valorem taxes owed in connection with the vacant building and the premises on which it is located” (Sec. 48B-7(a)(8)), and the director issues the certificate only if the applicant has complied with all requirements and has no outstanding fees under the chapter (Sec. 48B-9(a)).

That last requirement creates a real problem for a distressed asset, and the code gives only half an answer. If the application is incomplete the director “shall deny” it, with written notice stating the reason and the right of appeal (Sec. 48B-9(b), (c)). What the chapter does not say is whether being refused a registration is any answer to the continuing daily offence of owning an unregistered vacant building, and Sec. 48B-6(b) lists no defence for having applied and been turned down. That is a question for counsel rather than an assumption.

What Outside Downtown Requires, and the Sign Nobody Expects

The outside-CBD application is far lighter. Sec. 48B-20(a) asks for three things only: contact details for the applicant and any authorised agent; an emergency contact as required by Sec. 48B-28; and the number of buildings, dwelling units, swimming pools and spas on the premises. No tax evidence, no insurance, no square footage, and no ownership or lien holder schedule.

But once a property is classified a problem property, Sec. 48B-28 imposes obligations that mirror the downtown ones and one that exceeds them. A contact reachable 24 hours a day, seven days a week (Sec. 48B-28(a)), five days to report any change (Sec. 48B-28(b)), and this: “The owner, operator, or other person in control of a vacant building or vacant lot, or an authorized agent, must arrive at the premises within one hour after a contact person named under this section is notified by the city or emergency response personnel that an emergency condition has occurred on the premises” (Sec. 48B-28(c)).

The one hour rule is not a downtown rule. It applies to any problem property in the city, and an emergency condition includes fire, natural disaster, collapse hazard, burst pipe, a serious police incident, or any other condition requiring an immediate response. A contact in another time zone does not satisfy it.

The sign is where the two regimes diverge most sharply. Inside the central business district it is 24 inches tall by 18 inches wide, with “VACANT BUILDING” in 2-3/8-inch-high, two-inch-wide black letters on a bright yellow background, followed by the contact details in one-inch black letters (Sec. 48B-15(d), (e)). Outside it, on a problem property, Sec. 48B-28(e) requires a sign that must “(2) be a minimum of four feet tall and four feet wide, not to exceed 20 square feet; (3) be less than eight feet in height; (4) have lettering not less than six inches high and six inches wide in black font on a yellow background”.

Four feet by four feet with six-inch lettering, on each facade that faces a public right of way (Sec. 48B-28(d)). That is roughly sixteen times the area of the downtown sign, posted on a suburban retail or industrial property. For most owners it is the single most visible consequence in the chapter. Both sign rules require a format approved by the director, and both carry the same safe harbour: “A minor variation of a required or minimum height or width of a sign or lettering is not a violation of this section” (Sec. 48B-15(g); Sec. 48B-28(g)).

What It Costs

On a 200,000 square foot downtown building the inspection charge works out at $2,042.04, plus the $79 fee. The $219 line is the one that compounds. A problem property “may be subject to monthly monitoring and inspections”, and the fee is assessed when code compliance responds to a complaint and a violation is present, when a 30-day monitoring inspection finds a violation present, or on a re-inspection where the violation has not been corrected (Sec. 48B-21(b)).

Worth knowing on the way out: if a central business district registration expires inside six months the fee may be prorated and partly refunded, and if no inspection was conducted the inspection charge may be refunded in full, on written request within 90 days of expiry (Sec. 48B-8(c)).

Penalties run per day. Each day or portion of a day is a separate offence (Sec. 48B-5(a)). The maximum is $2,000 per offence. The minimum for a first conviction under Sec. 48B-6 is $500, doubled for a second conviction of the same offence within any 24-month period and trebled for the third and subsequent convictions, but “at no time may the minimum fine exceed the maximum fine”, so the escalation is bounded at $2,000 (Sec. 48B-5(b)). The city may also proceed administratively under Chapter 27 Article IV-b at the same range (Sec. 48B-5(d)).

Why Marketing the Building Is Weaker Than It Sounds

Sec. 48B-6(b) gives five defences to prosecution, and three of them are gated by a prior occupancy test that removes most of their value for a long vacancy.

• Occupied within the 45-day period preceding the alleged offence (Sec. 48B-6(b)(1)).
• Under renovation, rehabilitation, repair or demolition with valid permits, and occupied within the preceding 90 days (Sec. 48B-6(b)(2)).
• Actively marketed and advertised for lease or sale, and occupied within the preceding 90 days (Sec. 48B-6(b)(3)).
• Damaged or destroyed by fire, flood, storm or similar event within the preceding 90 days so as to be incapable of occupancy, unless the owner caused it intentionally (Sec. 48B-6(b)(4)).
• Owned by the city of Dallas, the State of Texas, or the United States government (Sec. 48B-6(b)(5)).

Read the third one carefully. Marketing alone is not a defence. The building must also have been occupied in the preceding 90 days. A building that has sat on the market for two years gets nothing from that clause.

Sec. 48B-19(b) mirrors these outside the central business district with one addition that matters to owners of outlying land. Where the downtown list ends at government ownership, Sec. 48B-19(b)(5) extends to property owned by those governments “or is a site primarily utilized as farm or agricultural land.” That agricultural carve-out is the only subject matter exemption anywhere in Chapter 48B, and it exists only outside the central business district.

Note also what the chapter does not contain. There is no stated deadline to register after a building becomes vacant. The 45-day prior occupancy provision is the only time cushion, and it is a defence to prosecution rather than a filing window.

Inspections, and Who Gets In

The director may inspect the exterior of a vacant building at a reasonable time. The interior needs “the permission of the owner, operator, or other person in control” or a search warrant (Sec. 48B-14(a)). The director must inspect at least once in each 12-month period the building is unoccupied (Sec. 48B-14(b)).

Separately, Sec. 48B-14(c) requires an applicant or registrant to permit the police department, the fire department, the department of code compliance and the building official to inspect the interior and exterior at reasonable times upon request, and makes refusal an offence. Two limits are worth noting: that duty binds an applicant or registrant rather than an owner who has never applied, and it is framed around a lawful inspection. Sec. 48B-27 is the outside-CBD mirror. The two subsections sit side by side and are worth reading together before deciding how to answer a request at the gate.

The Clocks

Several deadlines run at once, and the first one determines when the others start. A written notice from the director is deemed delivered on the day it is hand delivered, or three days after it is placed in the mail to the address on the most recent registration application (Sec. 48B-4). If that address is stale, the clock still runs.

• Material change: 10 days. “A registrant shall notify the director within 10 days after any material change in the information contained in the application… including any changes in ownership of the property” (Sec. 48B-7(c)).
• Renewal: at least 30 days before the certificate expires (Sec. 48B-12(b); Sec. 48B-25(b)). This is a real deadline, and it sits beside the absence of a registration deadline — do not confuse the two.
• Cure before revocation: 10 days after a pre-revocation notice is delivered (Sec. 48B-10(b), (c)). Combined with the three-day mail rule, this is the tightest squeeze in the chapter.
• Appeal: 10 calendar days after receiving notice of the director's action (Sec. 2-96(a)).

On the appeal, Sec. 48B-11 and Sec. 48B-24 make a denial of issuance, a denial of renewal, or a revocation final unless appealed, and Sec. 2-96(a) sets the window: the action is final unless the applicant “files a written appeal to the permit and license appeal board with the city secretary within 10 calendar days after the date of receiving notice of the director's action.” The hearing is set within 60 days (Sec. 2-96(b)) and the board's decision is final as to administrative remedies (Sec. 2-96(c)).

Note the scope. That route covers a denial of issuance, a denial of renewal, or a revocation. It is not the route for a citation for operating without a registration, which goes to municipal court or to administrative adjudication under Chapter 27 Article IV-b. And Chapter 48B gives the director no power to suspend a registration at all — the adverse actions available are denial of issuance, denial of renewal, and revocation.

Control, Not Just Title

“Owner” in Chapter 48B is wider than title but narrower than holding the debt. Sec. 48B-2(8) includes the holder of fee simple title, the holder of a life estate, the holder of a leasehold estate for an initial term of five years or more, the buyer in a contract for deed, “a mortgagee, receiver, executor, or trustee in control of real property”, and the named grantee in the last recorded deed. It excludes a leasehold or tenancy for an initial term of less than five years.

The operative words in that clause are “in control of real property”, and they qualify the mortgagee as much as the receiver. A lender merely holding a lien on a vacant Dallas building, with no receiver appointed and no foreclosure completed, is not obviously in control of it. Sec. 48B-7(a)(3) points the same way: the downtown application must list “all owners of the vacant building and any lien holders and other persons with a financial interest in the vacant building”, which reads oddly if a mortgagee were automatically an owner.

A receiver or trustee in control is squarely within the definition. So is a ground lessee on a long lease. A servicer is not named in the clause at all; whether one falls inside it turns on whether it has taken control, not on whether it services the loan.

Registration expires on the earlier of one year from issuance, a change in controlling ownership, the building becoming occupied, or demolition (Sec. 48B-12(a)), so a transfer ends the certificate and the new controlling owner starts again. Outside the central business district there is a fifth trigger: the date the owner of a vacant lot receives an approved building permit to build (Sec. 48B-25(a)(5)). If you hold vacant commercial property across more than one of our states, the same questions arise in different forms — our commercial property maintenance and Dallas field operations pages set out how we scope that work.