Being a landlord can be rewarding, but it can also be complicated and full of potential pitfalls. Some landlord mistakes can even result in legal action by tenants.
The following landlord mistakes are some of the most common legal errors landlords tend to make, as well as advice on how to avoid them:
1. Discriminating During Tenant Screening
The Federal Fair Housing Act protects tenants from being discriminated against on the basis of race, skin color, creed, religious affiliation, familial status, age, sex or a disability or medical condition. Questions or actions during the screening process that seem discriminatory could result in a lawsuit from the tenant or investigation by the U.S. Department of Housing and Urban Development (HUD).
Standard tenant screening such as criminal background and credit checks are fine, however the tenant should agree to these checks. A professional tenant screening service can assist in screening tenants to help avoid landlord mistakes and to ensure background checks are done properly and in compliance with the law.
2. Not Providing a Safe Environment
Landlords are required by law to provide an environment that does not have dangerous conditions or criminal activity. Making proper inspections and repairs are crucial in making sure a property is safe for all tenants. Quality locks, adequate lighting, and functioning heat and electricity are some of the basics required. The building as well as the roof and flooring should be structurally sound. Repairs should be made in a timely manner to ensure compliance and to avoid landlord mistakes. Tenant screening and criminal background checks can help with avoiding rental to criminal elements.
3. Disclosure Issues
While each state has different requirements, disclosure of specific issues with the property is often required. Mold in the property, lead-based paint, recent deaths in the unit and sex offenders living in the vicinity are all items that should be disclosed to ensure compliance. Checking the state’s specific laws around these issues is advisable so that all required disclosures are made to avoid landlord mistakes.
4. Disregarding Tenants’ Right to Privacy
Many states require landlords to give notice before entering a rented unit for any reason, usually at least 24 hours in verbal or written form, depending on the state. Acceptable reasons for entering a unit after giving the tenant notice are making a repair, showing it to a prospective new renter, or performing a warranted inspection of the premises. The only exception to entering without giving notice would be an emergency situation.
Being a landlord is an excellent business opportunity, but business must be conducted in compliance with state laws. Avoiding landlord mistakes and these four common legal errors is crucial to long-term success as a landlord.