10 Pitfalls in State Rental Laws You Should Look Out For

Managing rental properties and maintaining your rental agreements is a daunting task.

It requires forethought, organization, and proper knowledge of state laws. Each state has its own unique set of laws about what landlords can and cannot legally do regarding tenants.

It is important to stay up-to-date on your particular state's laws, and maintain positive relations with your tenants to avoid pitfalls and lawsuits.

Here are some common components of state rental laws that landlords should be aware of.

1. Failing to Use the Correct Forms

Make sure you protect yourself by using the correct forms and most up-to-date documents, such as lease applications and agreements.

There are many Internet sites that offer correct rental forms and are worth the money to ensure legality in your agreements; failure to do so dissolves the legal ground for enforcing your rental agreements.

2. Failing to Provide a Safe Environment

It is the landlord's responsibility to maintain a safe living environment for tenants, which means that you are responsible for maintaining living standards such as removing mold and fire hazards.

You are also required to provide reasonable protection from criminal activity, which may include locks, adequate lighting, and emergency exits.

3. Using Security Deposits Incorrectly

Landlords often collect security deposits in case of broken leases or rental damage, but the rules governing the use of deposits are strict.

Most states require landlords to provide an itemized list of deductions if the deposit is used, as well as a balance on the deposit.

If you fail to return the unused portion in a specified amount of time, you may owe your tenants extra money.

4. Failing to Provide Lead Paint Documents

For rental properties built before 1978, landlords are responsible for providing the EPA Lead Paint pamphlet as well as disclosing any and all knowledge regarding lead paint hazards in units.

This rule is easy to overlook, since lead has not been used in paint in many years.

The Environmental Protection Agency is a useful source for information on this issue.

5. Failing to Make Interest Payments on Security Deposits

This regulation is particular to the state and jurisdiction where your property resides; each state has its own take on whether landlords are required to pay interest on security deposits to tenants.

The interest usually doesn't come into effect until it has been held for over a year, and then it can be put toward rent owed or paid on a monthly or weekly basis.

6. Asking Discriminating Questions

As in most industries, discriminating based on age, religion, disability, gender, nationality, or race is against the law in all states.

Landlords should be aware that discriminating against families or children is illegal as well.

Phrase your interview questions carefully to avoid this mistake.

7. Imposing High Late Fees

Some states have dollar limits on late fees.

However, all states restrict landlords from charging unreasonable fees, which are those that exceed 5 percent of the monthly rent.

It is a smart move to put any and all fee rules in the lease agreement.

8. Violating Privacy Laws

Violating a tenant's privacy can excuse that tenant from further obligations under their lease agreement.

Make sure you are aware of your state's privacy rules, such as written notice requirements, valid reasons for visits or inspections, and the amount of notice you are required to provide before visiting the property.

9. Increasing Rent

Any and all rent increases should be included in your rental agreements.

Most states have rental increase caps, although there are exceptions to some of these regulations.

Learn what your state allows before you increase your rental fees.

10. Early Lease Termination

Some states have exceptions that allow certain tenants to break their leases early.

These may include tenants with health problems, tenants relocating for jobs, those in military service, and government employees.

Make sure you know the laws in your particular state, and include such exceptions in your lease agreements.

Posted on Nov 17, 2014


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