It’s common to think that a landlord’s job is simple, but in reality, this position demands a lot more work than one might imagine.
That said, when new landlords enter this business, they are bound to make certain mistakes. After all, no one is perfect. But you can avoid making costly mistakes by knowing the necessary rental market tips.
To help you start as a successful landlord, we have highlighted ten common landlord law mistakes that you should avoid.
#1 Not Screening Tenants Properly
One of the most significant and common landlord law mistakes is not screening properly their potential tenants. They fail to understand that not properly screening can cause serious issues, like late rent payments and property damage.
Start by checking the detailed references and then run a credit check to understand their rent-paying behavior. Next, conduct a criminal background check and look into their rental history.
A practical check will ensure that your potential tenants are credit-worthy. Try to conduct tenant screening almost like an interview. Thus, don’t be afraid to ask them multiple questions so you can rest assured about them.
Your possible questions can include the following:
- Do you have any pets?
- When would you move in?
- Have you ever been evicted?
- Why are you moving to a rental property?
- Can you pay a 12-month lease?
But you need to be mindful while asking questions. That’s because tenants have the right to make fair housing complaints if asked offensive questions.
#2 Not Getting Everything in Writing for Lease Agreement
Many landlords are guilty of not getting all the lease agreements in writing. They don’t understand the importance of a well-written lease or rental agreement.
You can avoid future complications by having a clear lease agreement with everything you want your tenant to adhere to. It includes lease rental agreements, rules/regulations, and anything else you feel is important.
Also, you should not use generic or outdated lease forms because they might not comply with your state’s laws. In addition, if your lease form short-cuts the tenant’s right, you might lose a lawsuit due to an unenforceable lease clause.
So, properly make the lease form and ask a qualified attorney to check it to ensure it is legal.
#3 Not Knowing Landlord-Tenant Laws of Rental Property
New landlords who do not know the landlord-tenant rules of their states are more likely to make silly landlord law mistakes. Not knowing the laws can become problematic if you ever have issues with your tenants in the future.
Remember that every state has different laws. That means you need to be familiar with the laws of your area. Going through the laws might sound boring, but it is important.
#4 Making Promises That You Won’t Keep
New landlords are likely to be enthusiastic about their property and tenants. In that excitement, they might highlight amenities to appear competitive in the market.
But you need to remember that your rental unit descriptions are seen as promises. If your potential tenant is relying on those descriptions to decide to rent, you need to be as accurate as possible.
For instance, tenants will believe your statement if you are highlighting in your rental unit description about providing parking space, a new paint job, or internet service.
If, under any situation, you fail to offer what you have promised, tenants can take legal action. They can even sue you for the difference between what they have got and what they were promised.
Whether or not the tenant wins that lawsuit, the case will surely cost you time and money.
#5 Charging High Rent or Huge Late Fee
New landlords often end up charging huge rents for their property, which is wrong. While your goal is to make a profit, you cannot overcharge your tenants.
Overcharging can make potential tenants lose interest in your rental properly. Also, your current tenants might not renew their lease.
To charge a fair rental price, do detailed research to know your area’s average price. Or you can hire a property management firm to understand the rates of similar properties. This way, you can stay competitive without overcharging or undercharging.
Similarly, you can charge a late fee, so your tenants pay the rent on time. But don’t cross the line by charging a high late fee that you cannot justify. Courts can also invalidate the high late fee that you are charging.
The best thing you can do is set a modest fee showing the damages you have suffered when tenants pay late. Also, a late fee applies to tenants with chronic late-paying habits and pay-or-quit notices.
In addition, you need to make sure that the late fee you are charging does not violate the late fee laws of your state.
#6 Violating Tenant’s Right to Privacy
Under no situation must you violate your tenant’s right to privacy, as it can make things difficult for you in the near future.
While every state has rules regarding tenants’ right to privacy, landlords visit the rental property almost every time unannounced. Many landlords stop by unannounced to do on-spot repairs, check things, or show the property to other tenants.
Bear in mind that frequent violations of a tenant’s privacy can put you in a difficult situation. It becomes an excuse for tenants from any further obligations. Or you might have to pay court-ordered money damages to the tenant.
#7 Ignoring Dangerous Living Conditions
Landlords in every state are required to maintain basic safety and healthy living conditions. These basic requirements are set by the state, local building codes, landlord-tenant laws, or health laws.
Failing to provide a safe environment, your tenant can break the lease. In fact, in many states, tenants can also withhold rent or deduct the amount from rent if they repair themselves.
Furthermore, in case of repeated on-site crime, provide safe living conditions to your tenant. If not done, you would have to compensate the tenant when a criminal intrudes. It would be an expensive way to understand the importance of providing safe living conditions to your tenant.
So, here’s what you can do:
- Inform your tenants about the possible hazards that exist on the premises.
- Make inspections.
- Ensure the safety of tenants by taking reasonable measures.
#8 Managing Too Many Properties
Landlords can get into trouble for managing too many own investment properties. Every landlord wants to make as much passive income as possible through rental investing.
But they fail to understand that being a landlord can be overwhelming. If you do not streamline the process, you might invite complications.
If you have too many rental properties, hire a property manager. When you have a trustworthy management company on your side, you can gain profit from the business without doing all the tedious work.
Your property management company can help you with tenant screening, rental registration, rent collection, maintenance, move-in/move-out reports, financial statements, eviction services, and more.
#9 Failing to Return Security Deposits
It’s revealed that most landlords do not return security deposit to their tenants. Every state has a law by which the landlords need to itemize the use of deposit money and return the remaining.
Many times, tenants wait for so long for this transaction to happen. Not returning security deposits as per the rule is considered bad faith. That’s why many states have a rule of charging harsh penalties against landlords for doing so.
#10 Ignoring Maintenance Issues of Prospective Tenants
As a rental property owner, it’s your responsibility to regularly check the property. Failing to do so can make your property uninhabitable.
So, try to keep your rental property up-to-date, safe, and well-maintained for your tenants by performing regular inspections. And if you find any issues, address them and get them repaired.
While moving into a rental property, tenants expect to have a safe and clean place. So the least you could do is offer them proper electricity and plumbing so they don’t face issues during their stay.
A habitable rental property must include basic amenities, like clean water, plumbing, gas, electricity, a safe room, a safe floor, and heating.
Also, once tenants have shifted, they will have maintenance issues, which you need to take care of. Not answering tenants’ requests can poorly harm your rental business.
Without a property manager, you have to look after the maintenance needs. But if you have a team, they can handle maintenance and repairs for you.
After a complaint regarding damage, if the property remains in despair, tenants can report the violation or move out. They can also get the problem fixed themselves and deduct the maintenance costs from rent or reduce the rent.
Anyone rents a property to tenants to earn money. But failing as a landlord can put you in a difficult position. Landlord law mistakes can result in a loss of profit and poorly harm your rental business.
That’s why you should always consult with an attorney to understand what things you can do as a landlord and what are common landlord law mistakes. Also, make the correct rental agreement with an attorney.
You can also work with a property management firm to complete all the grueling work so your rental business works smoothly.