10 Legal Mistakes Landlords Should Avoid
Being a landlord is a complicated job. Landlords have different duties they must uphold to their tenants. While the responsibilities may vary depending on the state, these obligations basically include providing a habitable space, maintaining the property, and providing certain services to their tenants. There are common legal mistakes that landlords make that can have serious repercussions under state laws or landlord-tenant laws.
Here are 10 common mistakes landlords make with tips on how to avoid falling into these traps yourself.
1. Asking Prospective Renters Discriminating Questions
The federal Fair Housing Act prohibits a landlord or property manager from refusing to rent property to a tenant for discriminatory reasons such as:
- National origin
- Gender identity
- Sexual orientation
- Familial status
It would be best if you avoided all questions or conversations that may appear discriminatory or suggest discriminatory intent. Tenant screenings are allowed for non-discriminatory things like background checks, income, job history, and past evictions.
2. Failing to Make Disclosures to Prospective Tenants
Every state has different requirements before a new tenant moves in. Standard disclosures you need to discuss include the following:
- Notice of mold when the landlord knows or has reason to believe that it exists
- Information about a state's sexual offender registry
- Notification of sex offenders that live in the area if the landlord knows of them
- Disclosure of recent deaths that have occurred in the rental unit
- Whether the rental unit contains lead-based paint if the property was built before 1978
3. Using Illegal Provisions in a Rental Agreement
A residential lease agreement shouldn't include provisions that violate state and/or federal laws. A landlord should avoid the common mistakes of:
- Placing discriminatory conditions in a rental agreement
- Requiring the tenant to waive the right to a refund of a security deposit
- Forcing a renter to waive their right to sue the landlord
Any illegal provisions may result in a lawsuit for money damages (a landlord liability case).
4. Failing to Provide a Safe Environment
In many states, landlords are legally responsible for keeping renters safe from dangerous conditions. This includes keeping the property safe from criminal activity. As a landlord, you have a legal duty to:
- Make inspections
- Inform tenants (and anyone legally entering the property) of hazards that exist on the premises
- Take reasonable measures to ensure the safety of tenants
Take action right away when you learn a property is unsafe. Otherwise, a tenant that sustains physical or property damage may be able to sue you. They can win, make you pay for their attorney, and recover compensation from you.
5. Refusing to Make Repairs
A rental agreement should specify who has to make repairs as to optional items such as appliances. In the case of more sensitive amenities like plumbing and electricity, a landlord must legally make some repairs even if a rental agreement doesn't define these duties.
Every state imposes an "implied warranty of habitability" on all rental premises. A habitable rental unit will provide:
- Clean water
- A structurally safe roof
- Safe flooring
If a property remains in disrepair, a tenant may choose to:
- Fix the problem and deduct the cost from the rent
- Live with the problem and proportionately abate rent for loss of use
- Move out
- Report the violation to a state building inspector
Failing to make these significant repairs within a reasonable time of when they are requested can result in a lawsuit against the landlord.
6. Disregard of a Tenant's Right to Privacy
A tenant always has a right to privacy. In most states, a landlord shouldn't enter a tenant's rental unit without first giving a minimum 24-hour written notice. A landlord can enter (after giving notice) when they:
- Show the unit to a prospective tenant
- Make a repair
- Inspect the property
It is unnecessary to provide notice when an emergency occurs, such as a fire, burst pipe, medical emergency, or domestic violence situation. A landlord may also cooperate with legal authorities pursuant to a court-sanctioned warrant for entry into the rental premises.
7. Ignoring Eviction Rules
A landlord can evict a tenant for:
- Nonpayment of rent
- Failure to vacate the premises after a lease agreement has expired
- Violation of a provision in the rental contract
- Causing damage to the property
Before throwing out a tenant, a landlord must use the eviction process. Every state has different guidelines, but most require giving the tenant a termination notice (or notice to quit) before filing an eviction lawsuit. If the landlord attempts to remove the tenant without a court order, the tenant may recover damages for the landlord's actions.
8. Keeping Security Deposits
Almost all lease agreements require a tenant to pay a security deposit to cover damage caused by the tenant. This money can also cover missing rent if a renter does not pay. After a tenant moves out, a landlord can use the security deposit to fix the damage caused by the tenant. A landlord, however, must:
- Provide the tenant with an itemized list of deductions
- Pay the balance of the deposit to the tenant
The landlord may owe the tenant monetary damages if the landlord fails to:
- Provide an itemized statement
- Return the unused portion of the security deposit
9. Getting Rid of Abandoned Property Inappropriately
When a tenant leaves items behind after vacating the property, the landlord must treat it as abandoned property. The landlord must notify the tenant of:
- The landlord's belief that the tenant has abandoned the property
- How to claim the property
- The cost of storage
- Where to claim the property
- How long the tenant has to claim the items
If the property remains unclaimed, two different processes may happen:
- If the items are worth more than a certain amount, the landlord may sell the property at a public sale after publishing a notice of sale in a local newspaper.
- If the property is worth less than the state-specified amount, the landlord can either keep the property or throw it away.
10. Having Inadequate Insurance on a Rental Property
Every landlord should insure a property for any destruction caused by natural disasters. It is also a good idea to insure a property against lawsuits brought by a renter.
Insurance will cover the cost of litigation and will pay the damage award if a landlord:
- Illegally evicts a tenant
- Makes an illegal entry
- Does not fix dangerous conditions
- Is sued for injuries sustained on the rental premises
In some jurisdictions, landlords may encourage or require tenants to carry their own renter's insurance as well.
Learn How to Avoid Legal Mistakes That Landlords Make
A rental property is usually intended to earn money with only a minor investment of time and energy in property management. But mistakes concerning your obligations to tenants can result in the loss of profits and consume an enormous amount of attention.
That's why it's a good idea to consult with a local landlord-tenant attorney to learn how to manage rental properties in an efficient and legal fashion.
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