Lawsuits and legal pitfalls can turn into a major hassle for rental property owners and managers, often producing costly settlements and significant unease. However, with adequate grasp and proactive steps, many of these issues can be avoided. Avoiding legal pitfalls starts with understanding the most common legal challenges rental property owners and managers face and applying industry best practices. By doing this, you can protect you and your properties and maintain smooth operations. In the sections ahead, we’ll review some of the most frequent lawsuits and legal pitfalls rental property owners face and provide practical steps you can take to avoid them.
Common Legal Pitfalls in Property Management
In the rental real estate industry, the top reasons a property owner or manager might find themselves in a lawsuit or other legal nightmare boil down to a few key legal pitfalls.
Violating Tenant’s Rights
One of the most common reasons a rental property owner or manager ends up in court is violating one or more of a tenant’s rights. Property owners are responsible for treating their residents fairly and equally and for complying with fair housing laws. State and federal housing laws define landlord responsibilities, which typically include:
- Providing a habitable living environment for tenants
- Addressing maintenance and repair requests promptly
- Adhering to local and federal housing and anti-discrimination laws
- Managing security deposits correctly and fairly
- Following legal eviction processes when necessary
The reality is that landlords can violate a tenant’s rights in these areas in many ways if they’re not cautious. For example, refusing to lease to a disabled person or improperly handling a tenant’s personal belongings during an eviction are two of many mistakes that can lead to costly lawsuits. A tenant also has a right to privacy, which requires a landlord to provide proper notice before entering their home or unit. Failing to do so can result in serious legal consequences.
Negligent Maintenance and Repairs
Another frequent legal pitfall related to tenant rights comes from failing to provide proper maintenance and repairs for a rental property. As noted, the law requires landlords to keep a rental property safe and habitable. Ignoring this duty might lead to personal injury, illness, or damage to personal property, potentially involving a property owner in a lawsuit.
Lease Disputes
A third common area with potential for legal pitfalls is unclear or misleading lease documents. A lease is a contract outlining the terms under which one party agrees to rent an asset—in this case, property—owned by another party. It guarantees the lessee, also known as the tenant, use of the property and guarantees the lessor (the property owner or landlord) regular payments for a specified period in exchange. When lease documents are vague, unclear, or not detailed enough, misunderstandings and legal action can follow.
Proactive Steps to Prevent Legal Issues
The good news is that a rental property owner or manager can do many things to prevent legal issues before they begin. These include:
- Clear and Comprehensive Lease Documents: Lease documents should be clear, thorough, legally sound, and define key terms. Take the time to go over the lease in detail with your tenant and ensure they understand. Once a lease is established, you should follow the terms closely and make it clear you expect the same from your tenant.
- Training on and Adherence to Fair Housing Laws: Staying informed about local and federal housing regulations is essential for compliance. Make sure you fully understand your obligations under the law, and if necessary, seek additional training on managing common issues that may arise from housing law disputes.
- Effective Communication and Documentation: Regular, positive communication is crucial for tenant satisfaction. Take the chance to acknowledge your resident’s efforts and invite their feedback. Respond to all maintenance and repair requests quickly and provide updates on work done on the property. Keep detailed records of all communications and agreements with tenants, including phone calls, and maintain a professional demeanor.
- Proactive Maintenance: Create and implement a proactive maintenance plan for your property. Setting and following a strict maintenance schedule can ensure the property, and your tenant stay safe.
- Fair Tenant Screening and Eviction Procedures: Use consistent and fair practices in tenant screening, application reviews, and leasing. Conduct thorough screenings and background checks and verify all references carefully. In the event of an eviction, comply with all state and local laws as outlined, including timelines, notices, and the proper handling of a tenant’s personal property.
Protect Your Business with Legal Precautions
Property owners and managers must comprehend their obligations, act proactively, and implement sound management strategies to avoid common legal pitfalls and lawsuits. They should also seek legal advice when unsure about decisions or when facing a situation that could lead to a tenant taking legal action against them. By doing so, they can ensure that they, their tenants, and their property are protected.
Do you need help ensuring your property management practices are legally sound? Contact your local property management experts in Bowling Green; the professionals at Real Property Management Clarity Team are ready to assist. Get in touch with us online or call 567-200-2320 today.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
