Being a landlord isn’t easy. It requires business skills, people skills, salesmanship and know-how about the rental business. Up until the 80s, you didn’t need much legal knowledge. Renting out homes was practically unregulated, and many landlords ran their rental businesses paying little attention to tenant rights. Now, though, the federal government and many states have properly developed systems of regulation in place that closely govern how exactly you obtain, retain and terminate tenancies. Mistakes can have serious legal consequences. Here are tips to help you avoid the seven most common legal mistakes that landlords make.
Use up-to-date forms
Stationery stores sell generic rental lease forms. These are a terrible idea, though, because they take illegal shortcuts. They may include language that denies your tenants their rights, and in many cases, may give your tenants rights that they aren’t legally entitled to. Some forms, for instance, declare that tenants will receive their security deposits within three days.
Only ask legal questions to screen applicants
Finding good tenants requires that you conduct a thorough interview. Through the process, though, you may find yourself asking questions that open you to legal liability. Asking a couple about their marital status, for instance, is illegal. You may find yourself sued by fair housing rights groups.
Be fair to families
Many landlords would prefer to be able to rent their homes to single people, rather than families. They dislike the fact that children tend to be noisy, and to attract complaints from other tenants. If anything about the way you screen your applicants has the appearance of a preference for childless tenants, you could be sued.
Be fair with all penalties
If a tenant is late with his rent, you do have a right to impose a penalty. You need to make sure that the penalty is a reasonable one, though. Many courts are beginning to strike down rules that require very costly penalties.
Respect your tenants’ privacy rights
Many landlords have a habit of considering the homes that they let out as somehow still theirs. They barge in to show the place to prospective tenants, to make repairs or to simply check around. It’s illegal to enter without permission, though, and can result in a lawsuit.
Be honest with the security deposit
When tenants leave a rental, they are supposed to do so with adequate notice. If they leave without notice, though, the landlord doesn’t have the right to retain the security deposit. He is only allowed to retain a portion to pay for rent until he finds a new tenant. Here, too, he needs to be able to prove that he has been doing everything in is power to find new tenants.
Pay back the security deposit promptly
Landlords are supposed to use the security deposits that their tenants leave with them as a kind of insurance policy against damage caused, unpaid rent, and other such things. It’s illegal for them to use it for anything else — appliance replacements, redecorating and so on. If you use up your security money and are unable to return it for any other reason, you can be taken to Small Claims Court. These cases are usually decided in favor of the tenant.