Top 7 Legal Pitfalls for Landlords and How to Avoid Them

Posted in Blog  
  on Nov 18, 2015

As a rental property owner, you are often a plumber, electrician or decorator, but you are probably not a lawyer. Since rental agreements are contracts and states have laws that specifically impact landlords and tenants, legal pitfalls can open up underneath you. Everything from poorly written rental agreements to responsibilities not outlined in a lease can crop up. Learn about some of the most common potential issues and how to avoid falling into a legal hole.

  1. Everything starts with the lease. You can find generic lease documents at many stores, but what they don't tell you is that those forms are not enforceable in every state. A single clause can render the entire document unenforceable. Be sure to talk with a real estate legal professional before choosing a lease document.
  2. Know your responsibilities. In addition to the interior of your property, most states also require landlords to maintain the exterior. For example, landlords may be responsible for snow removal and keeping grass cut to within legal limits. There may be a way to transfer those responsibilities to the tenant, but you would need to make sure that was clearly spelled out in the lease and legal in your area.
  3. Keep marketing clean. Before you post any ad or market an empty property, keep in mind that there are fair housing laws that specifically prohibit you from discriminating against prospective renters. This means you can't advertise to exclude families with small children or avoid a specific age group, in addition to a variety of other protected classes. Essentially, you should not be asking questions about a tenant's family situation, race, religion, or age when making a rental application decision.
  4. Screen tenants carefully. Even though careful screening should be a foundation of your rental business, asking the wrong question during an interview can be just as damaging as using the wrong language in an ad. Sure, you might not have made your decision to reject a tenant because they have small children, but asking could give them ammunition for a fair housing complaint.
  5. Obey privacy laws. Yes, you have the right to visit your property, make repairs and ensure it is taken care of. Your tenant has the right to privacy. Different states have different laws regarding how much notice you must give a tenant before visiting the property. Always notify tenants in writing of your intent to visit so they can make arrangements to be home. A single major violation could cost you significantly in damages.
  6. Keep late fees reasonable. No one enjoys dealing with frequent late payments, and the temptation is to charge punitive late fees to avoid the issue. Keep in mind that many states are now asking for proof of damage surrounding late fees. Excessive amounts might lead to a judgment against you that can become a major problem if every tenant jumps on board. A reasonable fee is defensible; an unreasonable fee is not, unless you can prove the financial losses due to the late payment.
  7. Return security deposits in a timely manner. Security deposits are only to be used for maintenance in excess of normal wear and tear. If a tenant leaves the property dirty, you could deduct a cleaning fee. If there is unapproved paint, you could charge the tenant for the repainting. You can't simply keep the security deposit or deduct more than the cost of the repairs. You also can't use the deposit for any refurbishing on the property. Courts can assess fees that equal three times the deposit or more, so keeping the security deposit too long or deducting expenses that are not the tenant's responsibility can be very costly.

 


Related

Most Important Landlord Tenant Laws in Texas

When it comes to having a tenant for the first time, it can be pretty daunting because you are going to be the corresponding landlord and a new relationship will emerge, which will need time to grow... More


The Landlord Tenant Board: What it is and When it is Needed

Many times, there are issues between a landlord and a tenant that need to be resolved but are failed to do so, because both parties have gone too far with their actions, and have retaliated in the... More


The Landlord Tenant Laws in California

The landlord and tenant laws in California are literally the same as they are in any other state. These laws, rules and regulations are put into practice because they uphold an order, a discipline,... More


Understanding the Landlord Tenant Laws in Illinois

People are aware that there are different rulings in each state with reference to the landlord/tenant laws. The state of Illinois also has a set of laws. These rules and regulations are basically... More


How to Create a Residential Lease Agreement

Where there is a landlord, there will also be a tenant, and it is no surprise that these two parties can only work together once there is some sort of agreement, contract or a binding deal in place.... More


The Best Sites for Rental and Lease Agreement Templates

Many landlords find it difficult to write and draft a lease agreement. Since every State has its own general template, it can also be difficult to make sure your lease agreement meets all the criteria... More


The Landlord Tenant Act: What Landlords Need to Know

All landlords know that before they can formally become a landlord there are a lot of things they need to understand. Landlords and tenants cannot act as such without any legal bodies involved. That... More


5 Landlord Forms that Every Landlord Should Have

When it comes to being a landlord, one should know that it is not for the unprepared individual. This should be clear that being a landlord does not simply mean that you will be taking the rent and... More


Landlord Obligations: The Responsibilities of a Landlord

Becoming a landlord is a major deal and no one can simply get up and think, “well, yes I think I should be a landlord and rent out my flat.” If you are thinking that you would like to be a landlord,... More


The Best Landlord Associations for Landlords to Join

If you’re a landlord and want to manage your business in a better way, you should endeavor to get in touch with those industry experts who have the experience and the skills to help you do it. This is... More