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5 Legal Issues for LandLords

By Aditi Mukherji, JD | Last updated on

Landlord-tenant relationships are notorious for being less than pleasant. Some end up being more unpleasant than others. For the sake of civility, landlords should always try to deal with potential problems before a lease or rental agreement is signed.

Here are five legal issues for landlords to keep in mind:

1. Using Old, Standard Lease Forms

Most landlords know the sage rule of "getting it in writing." It's crucial for landlords to have a written lease or rental agreement. But what landlords often don't realize is that using old, standard forms can be just as bad.

Generic leases and rental agreements often have old laws that aren't applicable anymore. Sometimes, they leave out a few tenant rights, which could make an entire lease clause unenforceable. Just as problematic, some standard forms are worded in a way that impose greater obligations and restrictions on landlords than their state law does.

You're better off drawing up a tailored lease that applies to your state's current laws and is worded in a way that's fair to both you and your tenant.

2. Failing to Promptly Return Security Deposits

Many states have deadlines by which landlords need to itemize their use of the security deposit and return any balance. In some states, if you hold off on returning a deposit for a long time, you might find yourself in small claims court and be ordered to fork over two to three times the deposit to the tenant.

To protect yourself, spell out a clear timeframe for deposit return in the lease and stick to it.

3. Asking Awkward and Possibly Illegal Questions

Breaking the ice is always a little awkward, especially in the landlord-tenant context. But when landlords ask applicants certain questions during the tenant background screening process, it could end up as a case of foot-in-court. Nosey questions that could also be discriminatory include:

  • Marital status: "You two are so cute together. Are you married?"
  • Familial status: "This zen garden adds to the mature, quiet environment. Do you have children?"
  • Disability: "Are you an alcoholic?"

Steer clear of asking questions about a protected class in your state. It'll also make for a better conversation.

4. Making Promises You Can't Keep

You might have great ideas to make your property more attractive -- a guaranteed parking space, cool amenities, a fresh paint job -- but if applicants rely on them when they sign on the dotted line, you'd better follow through because those promises can become binding.

In some cases, if you don't keep your promises, your tenant can legally break the lease and sue you for the difference in value between what was promised and what was delivered.

To avoid confusion, talk to the applicants and have any and all perks and promises clearly addressed in the lease or rental agreement.

5. Setting Excessive Late Fees

Courts are cracking down on excessive late rental fees that can't be justified with hard evidence. A late fee shouldn't be disproportionate to the actual damages landlords suffer when tenants pay late. Intimidating figures might mean business, but they also might mean legal trouble.

Instead, set a fee that mirrors your real damages, and give a pay-or-quit notice to that tenant who never pays rent on time. Yeah, that one.

These are just a few of the issues landlords need to be aware of to rent property right. Having a legal plan where you can have an attorney available to review a lease or rental agreement and write letters on your behalf can also help.

(Disclaimer: LegalStreet and FindLaw are owned by the same company.)

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