Increasingly, the role of landlord is being played by regular people who happen to own a second property. While rental properties can make great assets, they can also be legal liabilities, especially for self managing landlords who don’t have the time or expertise to devote to the job. In most states, the landlord-tenant laws are complex and often favor the tenant, so it’s important for landlords to understand the most common legal pitfalls in the industry.
Fair Housing Laws
It is illegal for landlords to select one rental applicant over another on the basis of race, color, national origin, religion, gender, disability, or familial status. That might sound like a simple law to follow, but it’s easier to violate than you might suspect. For example, if you advertise for a tenant in your local Catholic circular and nowhere else, you’re in violation of the Fair Housing Act. Or, if you have two rental applications, one from an older couple whose children have already moved out and who have slightly lower income, and one from a family of five with several young children who have a slightly larger income, you can be found guilty of discrimination if you choose the older couple. Clearly, the older couple is far less likely to cause damage and substantial wear and tear on the rental property, but to avoid violating the law, you would need to find a different reason to accept their rental application (for example, maybe they have better credit, or perhaps have a cleaner criminal or eviction history).
Do-It-Yourself Evictions
Evicting a tenant is time consuming and expensive, no matter how cut and dry the tenants’ breach of the lease agreement might be. When a tenant fails to pay rent, the landlord must serve the tenant with an eviction notice, but that’s only the start of the process. A landlord must also file in court, then wait for a hearing date, go to court, schedule an eviction date and in some jurisdictions even more notice is owed to the tenants. The process can take three months or longer. You must follow the law when evicting a tenant; it’s not as easy as changing the locks when rent has gone unpaid for several weeks.
Security Deposits
The security deposit is considered the tenant’s money. Many states require that landlords place security deposits in a separate bank account, and give the bank account information to the tenant upon signing a lease. Furthermore, many states require that the landlord send the tenant a written disclosure of all funds withheld from the security deposit upon move out, within a certain time frame (often 15 days).
Pet Deposits
A pet deposit is also refundable, even if you specify it as a separate deposit. If you want to charge a non-refundable pet fee, you can, but refer to it in the lease agreement as a non-refundable pet fee due upon signing. Never ask for a pet deposit for a service animal. It is a federal violation.
Lead Paint Documents
If your rental property was built before 1978, you are legally required to give your tenants both the EPA Lead Paint Pamphlet and a disclosure of your knowledge of lead paint hazards in the rental unit. Many jurisdictions also require lead paint inspections and sometimes these are required between tenancies.
It’s easy to run afoul of landlord-tenant laws and violate them by mistake, but don’t expect any sympathy from the judge. As a landlord you must follow the law to the letter, or else you will be held liable.
If you have any questions about having your home professionally managed or concerns about your current management company, please contact us at Hillcrest Property Management, and we’d be happy to help you!
